In 2024, the restaurant industry is grappling with financial instability, with many chains filing for Chapter 11 bankruptcy. From renowned fast-casual chains to small regional favourites, these businesses are facing challenges such as inflation, rising labour costs, and changes in consumer behaviour.
Let’s explore 13 restaurant chains that have filed for bankruptcy protection this year and the reasons behind their financial struggles.
1. BurgerFi
BurgerFi International, Inc., the parent company of BurgerFi and Anthony’s Coal Fired Pizza & Wings, filed for Chapter 11 bankruptcy in September 2024.
Ongoing financial difficulties, such as post-pandemic consumer decline and inflation, pushed the company to seek protection. BurgerFi has between $50 and $100 million in assets and up to $500 million in liabilities.
2. Roti
The Mediterranean fast-casual chain Roti filed for bankruptcy in August 2024. Due to higher operating costs, tough market conditions, and a decline in system sales, Roti is using the bankruptcy process to seek new investors or a buyer. Its 19 remaining locations in Chicago, Minneapolis, and Washington D.C. remain operational.
3. World of Beer
Once a rising star, World of Beer has also succumbed to debt, filing for Chapter 11 bankruptcy in August 2024. The chain, once at the height of the craft beer boom, has reduced its locations from 47 to 33 due to mounting debt and poor franchisee management.
4. Buca di Beppo
Buca di Beppo, known for its Italian-American dishes, filed for Chapter 11 bankruptcy in July 2024. Decreasing sales, high labor costs, and shifting consumer preferences led the chain to restructure its finances and close 13 underperforming locations. The chain continues to operate 44 core locations.
5. Gotham Restaurant
New York’s Gotham Restaurant, after 40 years in business, filed for bankruptcy in July 2024. The fine-dining establishment cited rising debt and operational challenges as contributing factors, temporarily closing its doors to reevaluate operations.
6. Tender Greens & Tocaya
One Table Restaurant Brands, which operates Tender Greens and Tocaya, filed for bankruptcy in July 2024. The pandemic, rising interest rates, and operational costs hit the company hard. They aim to continue operating while seeking a buyer for their 39 locations.
7. Melt Bar & Grilled
Ohio-based Melt Bar & Grilled, famous for its gourmet grilled cheese sandwiches, filed for Chapter 11 bankruptcy in June 2024. The pandemic, labor challenges, and the rising cost of goods have negatively impacted the chain. Several locations have already closed, with a few remaining open as it restructures.
8. Rubio’s Coastal Grill
Rubio’s Coastal Grill filed for its second Chapter 11 bankruptcy in June 2024. Declining customer visits and rising costs have forced the company to close 48 locations. The chain was sold to The Original Fish Taco LLC for $40 million as part of its restructuring process.
9. Red Lobster
After facing operational challenges and high food costs, Red Lobster filed for bankruptcy in 2024. The company is working to reorganize its business and potentially sell assets to pay off liabilities. Despite financial turmoil, the chain is continuing operations while closing certain underperforming locations.
10. Tijuana Flats
Florida-based Tijuana Flats filed for bankruptcy in April 2024. Along with the financial restructuring, the company closed 11 underperforming locations due to rising labor and food costs. The Tex-Mex chain continues to operate while exploring potential solutions.
11. Boxer
The Portland, Oregon-based ramen chain Boxer, along with its sister brand SuperDeluxe, filed for bankruptcy in early 2024. The pandemic, inflation, and high operating costs drove Boxer to close all four of its restaurants, though some SuperDeluxe locations remain operational.
12. Sticky’s Finger Joint
Sticky’s Finger Joint, a New York-based chicken tender chain, filed for bankruptcy in April 2024. The pandemic and legal issues, including a costly trademark infringement lawsuit, have taken a toll on the chain, reducing it to just 10 locations.
13. Popeyes Franchise
In January 2024, a Popeyes franchisee operating 17 units filed for Chapter 11 bankruptcy. The franchisee faced mounting debt and underperforming locations, contributing to its financial decline. While some locations have closed, others remain operational during the bankruptcy process.
Table of Bankruptcy Filings In 2024
| Chain | Date of Filing | Reason for Bankruptcy | Locations Closed | Remaining Locations |
|---|---|---|---|---|
| BurgerFi | Sept. 2024 | Declining consumer spending, inflation, labor costs | 19 underperforming | 144 |
| Roti | Aug. 2024 | Financial challenges, increased costs | 10 | 19 |
| World of Beer | Aug. 2024 | Growing debt, poor franchisee management | 14 | 33 |
| Buca di Beppo | July 2024 | Sales decline, labor costs | 13 | 44 |
| Gotham Restaurant | July 2024 | Rising debt, operational issues | Temporarily closed | N/A |
| Tender Greens & Tocaya | July 2024 | Pandemic, rising interest rates | None | 39 |
| Melt Bar & Grilled | June 2024 | Cost of goods, labor challenges | 6 | 3 |
| Rubio’s Coastal Grill | June 2024 | Declining visits, rising costs | 48 | 86 |
| Red Lobster | 2024 | High food costs, operational challenges | Several | Ongoing |
| Tijuana Flats | April 2024 | Food and labor costs | 11 | 65 |
| Boxer | April 2024 | Inflation, pandemic-related issues | 4 | 0 |
| Sticky’s Finger Joint | April 2024 | Pandemic, legal issues | Several | 10 |
| Popeyes Franchise | Jan. 2024 | Underperforming locations | 3 | Ongoing |
Conclusion:
In 2024, the restaurant industry faces significant challenges, leading several beloved chains to file for bankruptcy. From rising costs to shifting consumer trends, these financial struggles are reshaping the dining landscape.
However, with strategic restructuring and operational improvements, many of these chains aim to emerge stronger and continue serving loyal customers. Their journey reflects the resilience needed to navigate today’s competitive market.
FAQs
1. Why Are So Many Restaurant Chains Filing For Bankruptcy In 2024?
Many chains are facing post-pandemic consumer spending declines, inflation, rising food and labor costs, and operational inefficiencies, pushing them towards financial restructuring through bankruptcy.
2. Will These Chains Continue Operating After Filing For Bankruptcy?
Most of the chains plan to continue operating, though they may close underperforming locations and restructure their finances as part of the bankruptcy process.
3. Which Popular Chains Filed For Bankruptcy In 2024?
Chains like BurgerFi, Roti, Red Lobster, and Buca di Beppo are among those that filed for bankruptcy protection in 2024.
4. Are All Locations of These Chains Affected By Bankruptcy Filings?
Not all locations are affected. Many chains are closing underperforming restaurants but continuing to operate profitable locations.
5. What Steps Are These Companies Taking To Recover From Bankruptcy?
Companies are restructuring their debt, closing underperforming locations, seeking new investors, and optimizing their operations to emerge from bankruptcy stronger.
By adapting and restructuring, these chains hope to overcome financial challenges and regain stability in an unpredictable restaurant industry.
