In 2024, several prominent casual dining brands sought Chapter 11 bankruptcy protection, leading to the closure of numerous locations. The financial challenges faced by these companies were largely driven by the ongoing impact of the Covid-19 pandemic, rising labor and product costs due to inflation, and consumer hesitancy towards dining out amidst economic uncertainty.
Tijuana Flats, a Tex-Mex chain, filed for bankruptcy in April 2024, resulting in the closure of 11 locations. Following the sale of the business, the chain continues to operate approximately 100 outlets across Alabama, Florida, Kentucky, North Carolina, and Tennessee.
Red Lobster, a well-known seafood chain, entered bankruptcy in May 2024, shutting down over 120 restaurants. After emerging from Chapter 11 in September 2024, it now manages 545 locations.
In June 2024, Rubio’s Coastal Grill, a Mexican restaurant chain, filed for bankruptcy to restructure its debts, influenced by a new state minimum wage law. This led to the closure of 48 California locations, leaving the chain with over 80 restaurants in Arizona, California, and Nevada.
Another staple, TGI Friday’s Inc., sought bankruptcy protection on November 2, 2024, aiming to reorganize, sell certain assets, reduce its restaurant footprint, and terminate unfavorable leases. By January 2025, the company had sold 18 of its locations and closed 12 others that did not attract buyers.
Several other casual dining chains also went bankrupt and shut down outlets in 2025. For instance, Sticky Fingers Restaurants LLC, a barbecue restaurant based in South Carolina, filed for Chapter 11 on March 1, aiming to reorganize its operations. It maintains four Sticky Fingers Rib House locations in South Carolina and Tennessee. This chain is distinct from Sticky’s Finger Joint, which filed for bankruptcy in April 2024.
Fat Brands, the operator of various restaurant chains, announced no plans for bankruptcy but indicated it would close nine underperforming Smokey Bones barbecue restaurants in 2025. Additionally, Denny’s Corp. announced in February plans to shutter more of its low-volume restaurants than initially projected, with closures ranging from 70 to 90 locations by the end of 2025, as shared in their fourth-quarter 2024 earnings call.
Furthermore, McCormick & Schmick’s, a popular seafood and steakhouse chain founded in Portland, Oregon, in 1979, closed its last Oregon location in Tigard on March 22. This closure was attributed to an expired lease, although efforts are underway to relocate affected staff to nearby properties. The chain, acquired by Landry’s in 2011 when it had over 80 locations, now operates 19 locations and one catering service, with several affiliates in the Portland area, such as Jake’s Grill and Jake’s Famous Crawfish.