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The Red Lobster logo is seen outside a closed restaurant in Torrance, California, on May 14, 2024.
Patrick T. Fallon | AFP | Getty Images
Restaurant bankruptcies have risen so far this year, reflecting a broader rise in corporate bankruptcies across sectors.
At least 10 restaurant chains, excluding multi-unit franchises, have filed for bankruptcy in 2024. August alone saw three prominent chains file for Chapter 11 bankruptcy. The surge in bankruptcies comes as diners cut back on spending, labor costs continue to rise, and government aid in the age of Covid disappears.
Several other restaurant chains could file for bankruptcy before the end of the year. Burger FayAnthony's Coal Fired Pizza & Wings, which also owns Anthony's Coal Fired Pizza & Wings, said in a statement: Regulatory Deposit In mid-August, Model Pizza announced that there were “substantial doubts” about the company’s ability to operate. Other companies, like Model Pizza, have narrowly avoided bankruptcy through last-minute sales.
Restaurants aren’t the only businesses seeking bankruptcy protection as high interest rates weigh on businesses. Chapter 11 bankruptcies have risen 49% this year through Aug. 20, according to BankruptcyWatch. Express, nursing home chain LaVie Care Centers, and Fabrics and Crafts by Joan Among the companies that filed for bankruptcy protection this year.
Here are the top 10 restaurant chains that filed for bankruptcy protection in 2024:
Roti
Mediterranean fast-food chain Roti filed for Chapter 11 bankruptcy protection on Aug. 23. The company said it is working with landlords and suppliers to keep its 22 locations open while it looks for a buyer or new investors.
The company began struggling during the Covid-19 pandemic because nearly half of its locations were in downtown business districts, Chief Executive Justin Simmonds said in a statement at the time of the bankruptcy filing. New investors helped keep it afloat, but the recent downturn in consumer spending led to the bankruptcy.
Roti had raised $58 million by June, according to Pitchbook.
The bag of beppo
People dine outside Buca di Beppo restaurant in San Diego on August 11, 2020.
Ping Guan | Bloomberg | Getty Images
Buca di Beppo filed for bankruptcy on August 5. The Italian-American chain is keeping 44 of its locations open during the restructuring, and plans to open another restaurant as well.
The company attributed its financial difficulties to rising costs and labor challenges, according to court filings.
Buca di Beppo was founded in 1993 and sold to Planet Hollywood in 2008, after an accounting scandal involving some of its top executives.
beer world
The exterior of the World of Beer at the Crossgates Shopping Center in Guilderland, New York.
Laurie Van Buren/Albany Times Union | Hearst Newspapers | Getty Images
Pub 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 eating habits.
World of Beer plans to restructure and terminate leases at underperforming locations through bankruptcy.
The company was founded in 2007, when craft beer was on the rise. These days, craft beer sales have declined as consumers are less and less consuming it on a large scale.
Rubio
Rubio's filed for Chapter 11 bankruptcy protection in June. The fast-casual chain, known for its fish tacos, had 86 locations at the time across California, Nevada and Arizona.
The company said rising food and utility costs, a shift to hybrid work that has reduced lunchtime traffic, and a higher minimum wage in California have put a lot of pressure on some of its restaurants.
In August, Rubio agreed to sell to an affiliate of TREW Capital, one of its lenders.
The restaurant company had previously filed for Chapter 11 bankruptcy in 2020.
Melted and grilled bar
In June, the Cleveland-based restaurant chain announced it was struggling to pay vendors and landlords and filed for bankruptcy to save the company.
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 shrunk to four restaurants by the time it filed for bankruptcy.
Coma corner
Comma Holdings, the parent company of Comma Corner, declared bankruptcy in June.
The Midwest 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 shown on a plate at a Red Lobster restaurant in Austin, Texas, on May 20, 2024.
Brandon Bell | Getty Images
Red Lobster Giant Seafood Restaurant The U.S. restaurant chain filed for bankruptcy protection in May, citing a “challenging macroeconomic environment, oversized and underperforming restaurants, failed or ill-conceived strategic initiatives, and increased competition.”
One scapegoat for its bankruptcy was its disastrous “endless shrimp” promotion in 2023. But a less obvious culprit was a leaseback agreement under a previous landlord that made Red Lobster’s leases expensive, especially as sales declined.
On Tuesday, the investment group buying Red Lobster named Damola Adamolekun, the former CEO of PF Chang, to be the company’s next leader if it successfully emerges from Chapter 11.
Tijuana Apartments
Mexican style pizza from 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 has sold the fast-casual Tex-Mex restaurant chain to Flatheads LLC as part of a restructuring of the restaurant company.
The chain was founded in 1995.
sticky finger joint
Fried chicken chain Sticky's Finger Joint also filed for bankruptcy in April. Rising commodity costs, the effects of the pandemic, and legal expenses stemming from a trademark lawsuit filed by rival Sticky Fingers forced the company to restructure.
Sticky's was founded in 2012. By 2023, it had annual sales of $22 million, according to a court filing.
Ramen Boxer
The Portland, Oregon-based ramen chain filed for Chapter 11 bankruptcy protection in February. In late April, the company abruptly closed all four of its locations, more than a decade after it was founded.
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