A Red Lobster sign is displayed outside a closed restaurant on May 14, 2024 in Torrance, California.
Patrick T. Fallon AFP | Getty Images
The surge in restaurant bankruptcy filings so far this year echoes a general increase in corporate bankruptcies across industries.
At least 10 restaurant chains (not including multi-unit franchisees) have filed for bankruptcy in 2024. Bankruptcies are on the rise as diners cut back on spending, labor costs rise and COVID-era government help disappears.
Several other restaurant chains may file for bankruptcy before the end of the year. Burger Feewhich also owns Anthony’s Coal Fired Pizza & Wings, said in a statement Supervision filing In mid-August, there were “significant doubts” about the company’s operating capabilities. Others, such as Mod Pizza, narrowly avoided bankruptcy through last-minute sales.
Restaurants are not the only companies seeking bankruptcy protection as high interest rates put pressure on businesses. As of August 20, Chapter 11 filings have increased 49% this year, according to BankruptcyWatch. Mall retailer Express, nursing home chain LaVie Care Centers and Joann Fabrics and Crafts It is one of the companies that filed for bankruptcy protection this year.
Here are 10 famous restaurant chains filing for bankruptcy protection in 2024:
roti
Mediterranean fast-casual chain Roti filed for Chapter 11 bankruptcy protection on August 23. .
In a statement when it filed for bankruptcy, Chief Executive Justin Seamonds said the company began to struggle during the Covid-19 pandemic because about half of its offices are in downtown business districts. New investors helped it hang on, but a recent slump in consumer spending led to bankruptcy.
As of June, Roti had raised $58 million, according to Pitchbook.
Beppo’s Cave
People dine outside the Buca di Beppo restaurant in Santiago on August 11, 2020.
Guan Bing | Bloomberg | Getty Images
Buca di Beppo declared bankruptcy on August 5.
The company blamed rising costs and labor challenges for its financial difficulties, court documents show.
Founded in 1993, Buca di Beppo was sold to Planet Hollywood in 2008 following an accounting scandal involving some executives.
beer world
The exterior of the World of Beer at Crossgates Mall in Guilderland, New York.
Lori Van Buren/ | Albany Times Union | Hearst Newspapers | Getty Images
Tavern chain World of Beer filed for bankruptcy protection on August 2.
World of Beer plans to restructure through bankruptcy and terminate leases at underperforming locations.
The company was founded in 2007, at a time when the popularity of craft beer was soaring. Today, craft beer sales are down as consumers generally drink less alcohol.
Rubio’s
Rubio’s Restaurant filed for Chapter 11 bankruptcy protection in June. The fast-casual chain, best known for its fish tacos, had 86 locations in California, Nevada and Arizona.
The company said rising food and utility costs, a shift to hybrid work that reduces lunchtime traffic and an increase in California’s minimum wage are putting too much pressure on some of its restaurants.
In August, Rubio agreed to sell it to an affiliate of TREW Capital, one of its lenders.
The restaurant company previously filed for Chapter 11 bankruptcy in 2020.
Melt Bar and Grill
In June, the Cleveland-based chain said it was working to pay suppliers and landlords. To save the business, it turned to Chapter 11.
The company was founded in 2006 and is known for its grilled cheese sandwiches and craft beers.
Kumar’s corner
Kuma Holdings, the parent company of Kuma’s Corner, filed for bankruptcy protection in June.
The Midwestern burger chain, which opened its first location in 2005, stood out from the competition with its metal and punk-themed menu.
red lobster
Menu is displayed on a plate at a Red Lobster restaurant in Austin, Texas, on May 20, 2024.
Brandon Bell | Getty Images
Seafood Giant Red Lobster It filed for bankruptcy protection in May, citing “a difficult macroeconomic environment, oversized and underperforming restaurants, failed or ill-advised strategic initiatives, and intensified competition.”
One scapegoat for its bankruptcy was its disastrous “Endless Shrimp” promotion in 2023. This comes amid declining sales.
The investment group that acquired Red Lobster on Tuesday named former PF Chang executive Damola Adamolekun as the company’s next leader, if it successfully exits Chapter 11 of the U.S. Bankruptcy Code.
Tijuana Apartments
Mexican style pizza at Tijuana Flats.
Jeff Greenberg | Universal Image Group | Getty Images
In April, Tijuana Flats announced new ownership, a Chapter 11 bankruptcy filing and the closing of 11 restaurants in a press release.
AUA Private Equity Partners is selling fast-casual chain Tex-Mex to Flatheads LLC as part of a restructuring of the restaurant company.
The chain was founded in 1995.
Stitch’s knuckles
Chicken tender chain Sticky’s Finger Joint also declared bankruptcy in April. Rising commodity costs, the fallout from the pandemic and legal costs from a trademark case filed by rival Sticky Fingers have led to the company’s restructuring.
Sticky’s was founded in 2012.
boxer ramen
The Portland, Ore., ramen chain filed for Chapter 11 bankruptcy protection in February. In late April, the chain abruptly closed all four locations after more than a decade in existence.
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