Updated: Hobee's Los Gatos to Close

Hobee's Los Gatos, 165 Los Gatos Saratoga Rd., is closing.

The sad news was announced to Hobee's employees and other friends of the restaurant Sunday by Hobee's President Ed Fike, sources are confirming.

"Good Morning! I begin the day with the difficult task of informing our supporters of some sad news: We are closing Hobee's Los Gatos at the end of business on Sunday, August 25," Fike wrote in an email sent to supporters.

"I will be posting a lengthier note on our Facebook page in a few minutes, but I wanted to personally thank the five of you for your unflagging support during our five year run. -- Best regards, Ed."

Hobee's Los Gatos general manager Debbie Strole confirmed the news and said all questions about the closure were being handled by Fike at company headquarters.

Fike said landlord Nick Gera had nothing to do with the closure, although he noted the site commanded a "premiere rent" and he was confident he would justify the monthly payments based on sales.

However, Fike explained, the restaurant couldn't come through with its goals to make enough profit to break even. "Basically it came down to the week days and Los Gatos is a real vibrant, busy place during the evenings and weekends, but during the week days, when all of our other Hobee's generate large traffic for breakfast, Los Gatos did not," he said.

"That's a pretty significant chunk of our week, Monday through Friday, breakfast and lunch," he said. "When the sales tally would come in we would do phenomenal on the weekend and were above average for dinner, but the breakfast and lunch really lagged."

Hobee's Los Gatos opened in December of 2008 with a five-year lease that expires at the end of the month. Fike said the lease's end seemed like the right time to make the difficult decision. "We honored our five-year commitment ... It's always a big decision when you hit your option period to renew or not to renew."

The company, which is family owned by Fike and three other partners, has six other restaurants and one sole franchise in Cupertino, owned by Michael Lashen.

Fike said the business is doing well at the other six locations—Belmont, Palo Alto, Mountain View, Sunnyvale, San Jose and Campbell— riding "a really nice post-recession" wave, but Los Gatos didn't have a similar experience.

Fike said about 18 employees affected by the closure would be placed at the other restaurants. "We're confident all of them will be OK, especially our veteran employees," he said.

He noted few employees live in Los Gatos and most reside in San Jose, which means commuting to other restaurants won't be difficult.

"It's going to strengthen the company. You have one location that's not making money. It's a drag ... It's the weak link and by getting rid of it we're at the state where all the restaurants are contributing and all the restaurants are profitable. It's a good thing overall for the health of the company," he said.

Hobee's Los Gatos was named Business of the Year in 2012 by the Los Gatos Chamber of Commerce due to its support of local schools and charities.