Boston burrito chain Boloco is closing most of its stores by year’s end – The Boston Globe

All three closures come as the stores’ current leases are set to expire, and Pepper said he decided not to renew.

“The end of lease terms are big decision points,” he told the Globe Friday. “We’ve got to do upkeep and renovations and make a lot of investments. And so at a certain point, you kind of make a decision that it might be time to call it.”

The two remaining Boloco locations — one at Boston Children’s Hospital (283 Longwood Ave.) and one in Hanover, N.H — will “remain open for the time being,” the email to customers said.

“The leases are not long-term right now,” said Pepper, who noted the Hanover location in particular is struggling to attract full-time staff.

It’s been a grueling three years for the quarter-century-old fast-casual chain, which suffered mightily during the COVID-19 pandemic as many of its locations faced prolonged closures. Foot traffic from loyal customers — mainly office workers and college students — was decimated by remote work and school. Food costs soared.

The company nearly declared bankruptcy in 2020, but was saved by the second round of the Paycheck Protection Program, when it secured nearly $1 million in early 2021. They succeeded in renegotiating most of their leases to pay rent as a percentage of sales, but lost their Lynnfield and Atlantic Wharf storefronts in the process.

Since federal aid has dried up, Pepper and his team have “exhausted all efforts” to find a way to keep Boloco slinging its popular burritos, bowls, and salads. They were negotiating an acquisition by Streetlight Ventures — an investor in local establishments like Upper Crust Pizzeria and Anna’s Taqueria — but that fell apart at the end of 2021. They have also explored acquiring other brands “as a way to instill some energy” in the company, Pepper said, but nothing has come to fruition.

“The other thing I really contemplated and brought up was, literally, not even selling the business, but handing it over to some of our longtime employees,” said Pepper. “But it’s just too big of a liability for many people — because it can really take its toll.”

Higher labor costs have also proven difficult for the progressive company, which has a reputation of paying well above the state minimum wage. But as wages have climbed broadly amid the tight labor market, “we’re no longer differentiated like we once were,” said Pepper, though he added he is heartened by the trend.

Despite the “hangover effect” from the pandemic, Pepper said, 2023 has been a “great year,” with sales at all the locations besides Berklee recovering to 2019 levels. Catering — which will continue after the closures — has also proven to be a bright spot.

But it wasn’t enough. “We didn’t disappear immediately, but I think I think we sort of lost some of our enthusiasm about continuing on indefinitely,” Pepper said. “The so-called 50-year plan didn’t look as attractive anymore.”

Pepper, along with three other cofounders, launched Boloco (then named Under Wraps) in 1997, with its first location just steps from the current Berklee storefront. At its peak in 2013, Boloco (which stands for Boston Local Company) had 22 locations across New England, Maryland, and Washington, D.C.

Boloco currently employs about 70 workers, Pepper said. Seven people will be out of work following the Berklee closure, Pepper said, but he is committed to “making sure everybody is positioned for not just another job, but a better job.” Some workers are transitioning to other locations, “but at some point, that ends,” Pepper said.

A Starbucks will be moving into the Boston Common location, Pepper said, but what will come of Boloco’s other erstwhile real estate is yet to be seen. Pepper said he helped orchestrate the Starbucks lease and has been in touch with other restaurant operators who he thought might be interested in taking over the other locations, but no one has emerged yet.

“They’re fighting their own battles,” he said.

Dana Gerber can be reached at dana.gerber@globe.com. Follow her @danagerber6.