Cafe Maggie was named for its longtime resident dieffenbachia plant.
Cafe Maggie on North Fourth Avenue suddenly closed its doors over the weekend, with its owner telling the Arizona Daily Star he lost about $250,000 over its four years in business.
The breakdown of an expensive espresso machine was the last straw, owner Chander Vemulapalli said, adding that he's now facing bankruptcy.
“I have kept this place running at a slow loss for 4+ years always hoping I could turn the corner. I have finally run out of resources. The last of my capital will go to paying my employees a small severance," he wrote in a note posted on the door of the cafe at 745 N. Fourth Ave.
Vemulapalli bought Cafe Maggie in April of 2021 when it was Epic Cafe, with the hopes of creating an inviting place for people to gather, with good food and friendly staff.
“For 4.5 years I was in the store almost every day (even when the store was closed). I averaged 70-80 hours a week in the store or doing things for the store. I fully identified as the owner of Cafe Maggie,’” he told the Star in an interview Tuesday via Instagram.
After the first year, the cafe was able to make money for 7-9 months out of the year, he said, but would then lose money at other times, often during the summer when students and snowbirds emptied out of town.
In those times, Vemulapalli used his own cash to act as a buffer, and took cuts to his own pay, he said.
“The only way the cafe made money during the ‘good’ times was because I supplemented payroll by working so many hours at little to no pay,” Vemulapalli said. “A person very close to me has been telling me for 2 years that in essence I have been paying to work at the cafe.”
He also took on debt and loans to keep Cafe Maggie open.
Despite slow revenue over the summers, and tight finances, Vemulapalli said he still had hope he could make the cafe work, and that sales were increasing year over year. That is, until late spring of 2025.
“At that point sales plummeted,” he said. “Summer is my slowest time of the year so I banked on sales picking up when UofA came back into session.”
He said sales did pick up, but not enough to compensate for a summer that was already slower than expected.
“My sales since UofA has been back in session are about 60-65% what they were last year,” he said.
Cafe Maggie was at 745 N. Fourth Ave.
Vemulapalli has his own theories about what caused the sharp decline in business.
“There are a lot of reasons that sales are down, many due to the general economy, some due to a shift in transportation,” he said. “At one point there were a lot of people who walked by the cafe on their way to or from the UofA or work, now most of them take the Link, or an Uber, so that corner is now more of a destination than an impulse or a convenient place to stop. This coupled with the lack of parking makes that area especially difficult.”
He said he can point to multiple negative reviews on Yelp or Google where reviewers admitted to never eating at the cafe because they could not park right outside.
The final straw, though, was a breakdown of the espresso machine last week, which could cost as much as $10,000 to replace, he said, money the cafe didn’t have.
“When it happened I was already at the end of my endurance,” Vemulapalli said. “So I decided to use the cash in my account to pay my employees a small severance package (about 1 week pay) — not even enough to get them through until they are eligible for unemployment. But I figured if I tried to push through for another month, there would be a good chance I would still be walking away, but without being able to give my staff even that much.”
As for what’s next for Vemulapalli, he said it will take him a bit of time to figure out what the next chapter in his life will be, as the loss of Cafe Maggie is still fresh.
“I am confident that I will land on my feet,” he wrote. “That being said, to deal with the debt and contract obligations I took on with the Cafe, I will have to declare bankruptcy.”
The spot of bright news Vemulapalli was able to share was that the restaurant space's longtime resident dieffenbachia plant, Maggie, for which the cafe was named, will continue to be loved and looked after. Maggie dates back to the 1990s at the site.
“I am happy to say Maggie the plant is being well taken care of,” he said. “I have had a lot of inquiries about her. One of my employees (who has been taking care of Maggie for 2 years) has taken her home and will continue to care for her.”
