This year, 10 restaurant chains filed for bankruptcy.

• The number of Chapter 11 bankruptcy filings has increased this year, affecting the restaurant industry as well.
• Notable names such as Red Lobster, Buca di Beppo, and Roti have filed for Chapter 11 bankruptcy protection.

This year, there has been a significant increase in restaurant bankruptcy filings, mirroring a broader trend of rising corporate bankruptcies across various industries.

In 2024, over 10 restaurant chains filed for bankruptcy, with three notable eateries filing for Chapter 11 in August alone. This increase in bankruptcies is due to a decrease in consumer spending, rising labor costs, and the disappearance of government aid during the Covid era.

Several more restaurant chains may file for bankruptcy before the end of the year, including Carvel, which owns Anthony's Coal Fired Pizza & Wings, and Mod Pizza, which narrowly avoided bankruptcy through a last-minute sale.

This year, there has been a 49% increase in Chapter 11 filings as high interest rates impact businesses. Restaurants are not the only companies seeking bankruptcy protection, as mall retailers, nursing home chains, and Joann Fabrics and Crafts have also filed for bankruptcy protection.

In 2024, 10 well-known restaurant chains filed for bankruptcy protection.

Roti

Roti, a Mediterranean fast-casual chain, filed for Chapter 11 bankruptcy protection on August 23. The company is currently working with its landlords and suppliers to keep its 22 locations operational while it searches for a potential buyer or investors.

Due to the Covid-19 pandemic, the company faced financial difficulties because about half of its locations were situated in downtown business districts, as CEO Justin Seamonds stated in a statement at the time of the bankruptcy filing. Despite the support of new investors, the recent decline in consumer spending has led to the company's insolvency.

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

Buca di Beppo

In 2008, Planet Hollywood acquired Buca di Beppo, which was founded in 1993 but later faced an accounting scandal involving its top executives.

World of Beer

On Aug. 2, World of Beer, a tavern chain, filed for bankruptcy protection due to high interest rates, inflation, and a slow return to pre-pandemic dining habits.

Through bankruptcy, World of Beer intends to restructure and terminate leases at underperforming locations.

Craft beer sales have declined as consumers drink less, despite the company being founded in 2007 during the peak of craft beer popularity.

Rubio's

In June, Chapter 11 bankruptcy protection was filed by Rubio's Restaurants, which had 86 locations across California, Nevada, and Arizona, and is famous for its fish tacos.

Some of the company's restaurants are under pressure due to rising food and utility costs, reduced lunchtime traffic from hybrid work, and minimum wage hikes in California.

In April, California increased its minimum wage for fast-food workers at chains with over 60 locations to $20 per hour. Prior to filing for bankruptcy, Rubio's shut down 48 underperforming restaurants in California.

The restaurant company previously filed for Chapter 11 bankruptcy in 2020.

Melt Bar & Grilled

The Cleveland-based chain announced in June that it was facing financial difficulties and turned to Chapter 11 to prevent the business from collapsing.

Kuma's Corner

In 2005, the midwestern burger chain launched its first location, distinguishing itself from competitors with its metal- and punk-themed menu items.

Red Lobster

In May, Red Lobster filed for bankruptcy due to a challenging economic climate, poor restaurant performance, unsuccessful strategic decisions, and heightened competition.

The "endless shrimp" promotion in 2023 was a significant factor in Red Lobster's insolvency, but a less obvious cause was a lease-back agreement made under a previous owner that made the leases too expensive, particularly as sales declined.

If Red Lobster exits Chapter 11 successfully, the investment group has tapped Damola Adamolekun, the former CEO of P.F. Chang's, as the company's next leader.

Tijuana Flats

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

Flatheads LLC acquired the fast-casual Tex-Mex chain from AUA Private Equity Partners as part of the restaurant company's restructuring.

The chain was founded in 1995.

Sticky's Finger Joint

In April, Sticky's Finger Joint, a chicken-tender chain, filed for bankruptcy due to rising commodity costs, the aftermath of the pandemic, and legal expenses from a trademark dispute with Sticky Fingers.

In 2012, Sticky's was founded and by 2023, it had annual sales of $22 million, as per a court filing.

Boxer Ramen

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