If it seems like a lot of restaurant companies have filed for bankruptcy this year, it’s because a lot of restaurant companies have filed for bankruptcy this year.
At least 16 such companies have sought debt protection in one form or another since the start of the year, most of which have been filed this summer.
That’s an unusually high number. Yet it may in fact understate the extent of the operating problems facing a lot of restaurant chains right now, given near-bankruptcy filings at companies like MOD Pizza, Uncle Julio’s and BurgerFi.
At the same time, it’s not close to the number we saw during the pandemic when nearly three dozen restaurant chains and major franchisees filed for bankruptcy over a 12-month period. While other companies are likely to file this year, they won't come close to that number absent some surprising rash of Chapter 11 declarations.
But it nevertheless demonstrates that many companies were financially weakened by the pandemic and its shut-down of dine-in service. The post-pandemic environment was uneven and marked by inflation and changes in consumer habits. Those struggling companies could only survive for so long.
We’ve covered the filings extensively over the past couple of months.
We explained the reasons for the filings.
We declared this a restaurant recession not that long ago, and the Restaurant Business team has provided a special report on the topic.
Here are the companies that have filed for bankruptcy so far in 2024:
Red Lobster
The venerable casual dining chain has had some famous problems, from a decade-old sale-leaseback with rates favorable to the landlords, to an ill-advised all-you-can-eat shrimp deal. Oh, and lest we forget the owner apparently steered all its shrimp purchases to itself.
Buca di Beppo
The latest bankruptcy filing might be the second biggest after Red Lobster. The Italian chain may be a pure victim of the pandemic.
Rubio’s
The fast-casual Mexican chain known for its fish tacos closed 48 locations and filed for bankruptcy shortly thereafter. Much of the focus was on California, where it’s based and where those restaurants are located. But this was the second filing by the chain since 2020.
Tijuana Flats
Another big bankruptcy filing, this chain was once a fast-growing, highly-regarded entrant in the fast-casual Mexican business. It blamed a “confluence of adverse events” for its filing. It closed 40 restaurants this year, leaving the chain with 91 restaurants.
World of Beer
Once one of the country’s fastest growing chains, the craft beer concept out of Tampa has struggled with inflation, weak traffic and franchisee litigation.
EYM Pizza
The 140-unit Pizza Hut franchisee closed some locations and filed for Chapter 11 after trading lawsuits with its franchisor. One of the few that did not explicitly blame the pandemic.
River Subs
Another franchisee, the 48-unit River Subs filed for bankruptcy after losing a wrongful death lawsuit. But the operator has also closed 21 locations in recent years.
Tender Greens and Tocaya
The parent company of the two fast-casual brands filed for bankruptcy, blaming a host of problems, including the high cost of third-party delivery.
Miracle Restaurant Group
The Arby’s franchisee, which operates 25 locations in Illinois, Indiana, Texas, Mississippi and Louisiana, filed for a second time.
Chicago WhirlyBall
This chain is small enough that a single bad location apparently helped push it into Chapter 11.
Melt Bar & Grilled
The Ohio chain, which was featured on the Food Network, expanded aggressively but struggled after the pandemic.
Kuma’s Corner
A Chicago institution, it filed for Chapter 11 after citing “ongoing cashflow problems” and “general economic conditions.”
SouthRock Capital
We don’t count this among the 16 because SouthRock operates restaurants in Brazil. But the TGI Friday’s franchisee, and former Subway and Starbucks operator, sought Chapter 15 bankruptcy to protect its interests in the U.S.
Boxer Ramen and SuperDeluxe
The local concepts out of Portland shuttered locations and declared Chapter 11 in February.
Sticky’s Finger Joint
The New York chicken tender chain struggled with legal challenges and, you guessed it, inflation.
Oberweis Dairy
The ice cream concept struggled with shifts in consumer tastes and ill-fated management decisions, such as under-investing in production and over-investing in distribution.
Etta Collective
The troubled restaurant group filed for bankruptcy in February and was later sold.
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