The restaurant industry is as unpredictable as ever. While some chains are struggling to keep up with their competitors, others are still dealing with the aftermath of the pandemic. For several, financial difficulties have been mounting for years, leaving them with no other choice but to file for bankruptcy.
The year started with one Popeyes franchisee declaring Chapter 11 bankruptcy, followed by a string of chains filing for the same financial protection. These primarily consisted of smaller chains like New York-based Sticky's Finger Joint, though the most recent—and highly publicized—one was filed by national seafood giant Red Lobster.
With these recent bankruptcy filings, multiple restaurant chains have had to streamline their restaurant portfolio by shuttering locations. Read on to discover six restaurant chains that have declared bankruptcy in 2024.
Red Lobster
About a week after making headlines for abruptly closing dozens of locations, Red Lobster announced it had filed for Chapter 11 bankruptcy. Jonathan Tibus, Red Lobster's CEO, said in a press release that the bankruptcy will enable the company "to address several financial and operational challenges."
The seafood chain said it will use the proceedings to promote operational improvements, reduce locations, and sell "substantially all of its assets." Court documents reveal that Red Lobster has an estimated $1 billion to $10 billion in assets and liabilities.
Over the years, Red Lobster has struggled with several issues, including high food and labor costs and significant operating losses, which include the $11 million loss tied to its Ultimate Endless Shrimp deal. The company is now investigating the role that Thai Union, Red Lobster's majority owner, played in the popular promotion, according to Reuters.
Tijuana Flats
In April, Tijuana Flats, the Florida-based Tex-Mex restaurant chain, shared several restructuring plans, one of which was filing for Chapter 11 bankruptcy protection. According to Restaurant Business Online, the chain has nearly $19 million in debt.
Along with announcing the bankruptcy, Tijuana Flats shared that Flatheads, LLC. acquired the chain. The company noted in a press release that its strategic review, which began in November 2023,drove the new ownership and bankruptcy filing.
The changes for Tijuana Flats didn't stop at a bankruptcy filing and new owner. The restaurant chain also closed 11 restaurants, 10 of which were in Florida and one of which was in Virginia, according to a company representative. The company said these closures stemmed from "a unit-by-unit analysis of financial performance, occupancy costs, and market condition."
The recent shutterings follow 40 additional closures this year. Restaurant Business Online reported that Tijuana Flats has attributed some of its financial struggles to rising food and labor costs after the pandemic, as well as shifts in consumer spending. In addition to this, the chain's menu expansion in 2021 required more equipment and staff, resulting in slower service times, increased costs, and lower customer satisfaction, according to the filing. This ultimately led to a decline in sales.
Boxer
At the end of April, Boxer, a small Portland, Ore.-based Ramen chain, announced via Instagram that it will be closing all four of its restaurants on May 29 after filing for Chapter 11 bankruptcy with its sister chain SuperDeluxe in February. In its Instagram post and on its website, Boxer said the closures were due to a combination of pandemic-related challenges and inflation.
"Despite the tireless efforts and dedication of our incredible team, and the unwavering support from all of you, our family and friends, it has become impossible to continue operating," Boxer wrote.
Before filing for bankruptcy in February, Boxer had opened two new restaurants—a Beaverton, Ore., location in December 2023, and a Multnomah Village, Ore., location in January 2024.
Beyond Boxer's closures, SuperDeluxe, which once operated five restaurants, now has just two, according to the Willamette Week. However, the chain's website currently lists three locations.
10 Restaurant Chains Closing Locations In 2024
Sticky's Finger Joint
After struggling with pandemic-related issues and various legal troubles, New York-based Sticky's Finger Joint filed for Chapter 11 bankruptcy at the end of April. During the pandemic, the chicken tender chain experienced decreasing sales and restaurant closures and now operates just 12 locations. Sticky's also said its financial issues resulted from the increased reliance on third-party delivery channels, as well as low foot traffic in New York City following the pandemic, according to Restaurant Business Online.
Beyond its financial struggles, the chain has gotten sued multiple times. In 2022, the similarly named, older barbecue chain Sticky Fingers sued Sticky's over trademark infringement. A year before that, a court awarded Sticky's landlord $600,000 in damages after the chain left its lease early. Although Sticky's appealed this, the case resulted in a "financial strain," according to Restaurant Business Online.
Popeyes
At the end of January, RRG, a 17-unit Popeyes franchisee filed for Chapter 11 bankruptcy and attributed this to three underperforming restaurants. According to the filing, the restaurants "have significantly lost money and caused a financial burden on the continued operation of the remaining restaurants." Additionally, the franchisee fell behind on the lease payments of its profitable locations and must pay them back to avoid lease termination. The filing notes that RRG plans to continue operating its business during the bankruptcy while closing its "poor performing locations."
The franchisee owes rent to at least 11 entities, with one landlord owed as much as $238,595.13 according to Restaurant Dive. This is the second Popeyes operator to file for bankruptcy since last March.
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