Bankruptcy filings among restaurant chains have surged this year, reflecting a broader trend of corporate financial distress across various sectors. So far in 2024, at least 10 restaurant chains, excluding multi-unit franchisees, have filed for bankruptcy. August alone saw three notable Chapter 11 filings. The rise in bankruptcies comes as consumers reduce spending, labor costs continue to climb, and the last of the pandemic-era government support fades away.
More restaurant chains could face bankruptcy before the year ends. For instance, BurgerFi, which also owns Anthony’s Coal Fired Pizza & Wings, revealed in a mid-August regulatory filing that there is “substantial doubt” about its ability to continue operating. Meanwhile, others, like Mod Pizza, narrowly avoided bankruptcy through last-minute sales.
The restaurant industry isn’t the only sector feeling the strain. High interest rates are pushing many businesses towards bankruptcy. As of August 20, Chapter 11 filings were up 49% this year, according to BankruptcyWatch. Companies such as mall retailer Express, nursing home chain LaVie Care Centers, and Joann Fabrics and Crafts are among those that have sought bankruptcy protection in 2024.
Here are the 10 restaurant chains that filed for bankruptcy protection this year:
Roti
Mediterranean fast-casual chain Roti filed for Chapter 11 bankruptcy on August 23. The company is working with landlords and suppliers to keep its 22 locations open while seeking new buyers or investors. Roti, which struggled during the COVID-19 pandemic due to its downtown locations, raised $58 million by June 2024 but could not withstand the recent downturn in consumer spending.
Buca di Beppo
Buca di Beppo, known for its Italian-American cuisine, filed for bankruptcy on August 5. Despite keeping 44 of its locations open and planning to open another, the company cited rising costs and labor challenges as the primary reasons for its financial difficulties. Buca di Beppo, founded in 1993, was sold to Planet Hollywood in 2008 after an accounting scandal.
World of Beer
On August 2, tavern chain World of Beer filed for bankruptcy protection, attributing its struggles to high interest rates, inflation, and a slow return to pre-pandemic dining habits. The chain, founded in 2007 during a boom in craft beer popularity, plans to restructure and terminate leases at underperforming locations.
Rubio’s
Rubio’s Restaurants, a fast-casual chain famous for its fish tacos, filed for Chapter 11 in June. With 86 locations across California, Nevada, and Arizona, the company struggled with rising food and utility costs, a shift to hybrid work reducing lunchtime traffic, and minimum wage hikes in California. Just before filing, Rubio’s closed 48 underperforming restaurants and agreed to a sale to an affiliate of TREW Capital, one of its lenders.
Melt Bar & Grilled
In June, Cleveland-based Melt Bar & Grilled filed for bankruptcy, citing difficulties in paying vendors and landlords. Known for its grilled cheese sandwiches and craft beer, the chain, founded in 2006, had reduced its footprint to four locations by the time of its bankruptcy.
Kuma’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, is known for its metal- and punk-themed menu items.
Red Lobster
Seafood giant Red Lobster filed for bankruptcy in May, blaming a tough macroeconomic environment, an underperforming restaurant footprint, and increased competition. The company’s troubles were exacerbated by a costly “endless shrimp” promotion and a lease-back agreement made by a previous owner, which made leases unsustainably expensive.
Tijuana Flats
In April, Tijuana Flats announced a Chapter 11 bankruptcy filing, a change in ownership, and the closure of 11 restaurants. The fast-casual Tex-Mex chain was sold by AUA Private Equity Partners to Flatheads LLC as part of its restructuring.
Sticky’s Finger Joint
Sticky’s Finger Joint, a chicken-tender chain, filed for bankruptcy in April. The company cited rising commodity costs, lingering effects from the pandemic, and legal expenses from a trademark case as reasons for its financial difficulties.
Boxer Ramen
Portland-based Boxer Ramen filed for Chapter 11 bankruptcy in February. The ramen chain, founded over a decade ago, abruptly closed all four of its locations in late April.
