- 1FRC Balance, owner of True Food Kitchen, filed for bankruptcy and closed 12 restaurants.
- 2Parafin is listed as owed $2,206,502 on an MCA that originated via DoorDash Capital.
- 3Debtors' counsel said they plan to reject Parafin's contract and the payments under it.
FRC Balance, LLC, the owner of the True Food Kitchen restaurant chain, filed for bankruptcy this week, and its creditor list includes Parafin with a merchant cash advance balance of $2,206,502. The advance originated through DoorDash Capital.
The filing
According to the company's announcement, True Food Kitchen closed 12 restaurants, with the last day of service on Sunday, October 4. The remaining 34 locations in 14 states are open as usual.
Nothing in the filings suggests the MCA drove the company's financial trouble. The chain owes millions to food vendors alone, and it pointed to management turnover, changes in expansion strategy, failed investments and product and branding issues as the causes.
A showcase DoorDash Capital customer
The balance stands out for its size and its origin. DoorDash's entry into MCAs surfaced in January 2022, and True Food Kitchen became a showcase customer. In July 2025, DoorDash published a feature on how the chain used the product to fund expansion. It says CFO Peter Koumas found DoorDash Capital in the Merchant Portal in September 2024, while the company was opening locations in Scottsdale, Arizona and Raleigh, North Carolina. DoorDash accounted for 10% of the chain's revenue then, and the feature noted that Parafin supplied the MCAs.
Among the creditors in the bankruptcy papers are Rewards Network, owed $1.8 million under an "MCA" line item, and InKind Credit, owed $7.1 million, along with more conventional lenders.
Parafin's exposure
The filing arrives days after Parafin said it was joining Stripe for an undisclosed price and that it had originated $3 billion since 2021. Until then the scale of its lending was largely unknown, and this case hints at how large its exposure to a single client can be.
At a bankruptcy court hearing, counsel for the debtors said they intend to reject Parafin's contract and the payments tied to it.
Source reporting: deBanked.
