#RestaurantBankruptcy #2024EconomicImpact #FoodIndustryCrisis
Restaurant Chains That Filed for Bankruptcy This Year
The restaurant industry has faced significant challenges in 2024, with numerous chains and franchisees filing for bankruptcy. This trend is largely attributed to declining traffic, rising labor and operating costs, and the ongoing impact of the COVID-19 pandemic.
Red Lobster
Red Lobster, a well-known seafood chain, filed for bankruptcy in May after closing approximately 100 locations. The company cited years of growing debts and costs, as well as declining cash flow, which was exacerbated by its Ultimate Endless Shrimp offer that led to significant losses.
Rubio's
Rubio's, a fast-casual Mexican chain, filed for Chapter 11 bankruptcy for the second time since 2020. The company closed 48 locations and cited the $20 fast food minimum wage in California as a contributing factor to its financial struggles.
Buca di Beppo
Buca di Beppo, an Italian chain, filed for bankruptcy in August, citing ongoing macroeconomic factors, consumer pushback on pricing actions, debts to landlords and banks, and high interest rates. The company plans to restructure and continue operating its remaining 44 locations.
World of Beer
World of Beer, a craft beer concept, filed for Chapter 11 bankruptcy in August, citing ongoing inflationary pressures, negative same-store sales, and the failure of the IRS to issue a timely $3 million refund as part of Employee Retention Tax Credits. The company has closed 14 locations over the last year.
Tijuana Flats
Tijuana Flats, a fast-casual Tex-Mex chain, filed for bankruptcy and closed 40 restaurants. The company attributed its financial struggles to rising food and labor costs, shifts in consumer spending, and the menu expansion in 2021, which required more equipment and staff, leading to slower service times, increased costs, and lower customer satisfaction.
Other Chains
Several other chains have also filed for bankruptcy, including Roti, a fast-casual Mediterranean chain; Melt Bar & Grilled, a Cleveland-based restaurant chain; and Sticky's Finger Joint, a New York-based chicken tender chain. These chains have faced various financial challenges, including declining sales, increased costs, and legal issues.
The restaurant industry continues to face significant challenges, and these bankruptcies highlight the need for chains to adapt to changing consumer habits and economic conditions.
Original Article: https://www.cnbc.com/2024/09/01/restaurant-chains-that-filed-for-bankruptcy-this-year.html
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