These 10 restaurant chains filed for bankruptcy this year

These 10 restaurant chains filed for bankruptcy this year

The Red Lobster logo is displayed outside of a closed restaurant in Torrance, California, on May 14, 2024.

Patrick T. Fallon AFP | Getty Images

Restaurant bankruptcy filings have surged so far this year, echoing a broader rise in corporate bankruptcies across sectors.

At least 10 restaurant chains, not including multi-unit franchisees, have filed for bankruptcy in 2024. August alone brought three Chapter 11 filings from notable eateries. The increase in bankruptcies comes as diners pull back their spending, labor costs keep rising and Covid-era government help disappears.

Several more restaurant chains could file for bankruptcy before the end of the year. BurgerFiwhich also owns Anthony’s Coal Fired Pizza & Wings, said in a regulatory filing in mid-August that there is “substantial doubt” about the company’s ability to operate. Others, such as Mod Pizza, have narrowly avoided bankruptcy through a last-minute sale.

Restaurants are not the only companies seeking bankruptcy protection as high interest rates weigh on businesses. Chapter 11 filings have climbed 49% this year as of Aug. 20, according to BankruptcyWatch. Mall retailer Express, nursing home chain LaVie Care Centers and Joann Fabrics and Crafts are among the companies that have filed for bankruptcy protection this year.

Here are the 10 notable restaurant chains that filed for bankruptcy protection in 2024:

Roti

Mediterranean fast-casual chain Roti filed for Chapter 11 bankruptcy protection on Aug. 23. The company said it is working with its landlords and suppliers to keep its 22 locations open while it searches for a new buyer or investors.

The company began struggling during the Covid-19 pandemic because roughly half its locations were in downtown business districts, CEO Justin Seamonds said in a statement at the time of the bankruptcy filing. New investors helped it hold on, but the recent downturn in consumer spending led to insolvency.

Roti had raised $58 million as of June, according to Pitchbook.

Beppo’s Book

People dine outside a Buca di Beppo restaurant in San Diego on Aug. 11, 2020.

Bing Guan | Bloomberg | Getty Images

Buca di Beppo declared bankruptcy on Aug. 5. The Italian American chain is keeping 44 of its locations open while it restructures, and plans to open another restaurant, too.

The company blamed its financial difficulties on rising costs and labor challenges, according to court filings.

Buca di Beppo was founded in 1993 and sold to Planet Hollywood in 2008, following an accounting scandal involving some of its top executives.

Beer World

The exterior of 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 Aug. 2. The company blamed high interest rates, inflation and a slow return to pre-pandemic dining habits.

World of Beer plans to restructure and end leases at underperforming locations through bankruptcy.

The company was founded in 2007, when craft beer popularity was soaring. These days, craft beer sales have fallen as consumers broadly drink less.

Rubio’s

Melt Bar & Grilled

In June, the Cleveland-based chain said it was struggling to pay its vendors and landlords. It turned to Chapter 11 to save the business.

The company, known for its grilled cheese sandwiches and craft beer offerings, was founded in 2006. It had 14 locations at its peak, but its footprint had dwindled to four restaurants by the time of its bankruptcy filing.

Kuma’s Corner

Kuma Holdings, the parent company of Kuma’s Corner, filed for bankruptcy protection in June.

The midwestern burger chain opened its first location in 2005, setting itself apart from the competition with its metal- and punk-themed menu items.

Red Lobster

A menu is displayed on a plate at a Red Lobster restaurant in Austin, Texas, on May 20, 2024.

Brandon Bell | Getty Images

Tijuana Flats

A Mexican-style pizza from at Tijuana Flats.

Jeff Greenberg | Universal Images Group | Getty Images

In April, Tijuana Flats announced new ownership, a Chapter 11 bankruptcy filing and the closure of 11 restaurants in a single press release.

AUA Private Equity Partners sold the fast-casual Tex-Mex chain to Flatheads LLC as part of the restaurant company’s restructuring.

The chain was founded in 1995.

Sticky Finger Joint

Chicken-tender chain Sticky’s Finger Joint also declared bankruptcy in April. Rising commodity costs, the hangover from the pandemic and legal expenses from a trademark case brought by rival Sticky Fingers led the company to restructure.

Sticky’s was founded in 2012. By 2023, it had annual sales of $22 million, according to a court filing.

Boxer Ramen

The Portland, Oregon ramen chain filed for Chapter 11 bankruptcy protection in February. In late April, it abruptly closed all four of its locations, more than a decade after the chain’s founding.

Don’t miss these insights from CNBC PRO

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *