The Red Lobster logo design is shown beyond a shut dining establishment in Torrance, California, on May 14, 2024.
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Restaurant insolvency filings have actually risen up until now this year, resembling a wider surge in business insolvencies throughout fields.
At the very least 10 dining establishment chains, not consisting of multi-unit franchisees, have actually declared insolvency in 2024. August alone brought 3 Chapter 11 filings from noteworthy restaurants. The rise in insolvencies comes as restaurants draw back their investing, labor prices maintain increasing and Covid- period federal government aid vanishes.
Several a lot more dining establishment chains might declare insolvency prior to completion of the year. BurgerFi, which likewise has Anthony’s Coal Fired Pizza & & Wings, stated in a regulatory filing in mid-August that there is “substantial doubt” regarding the business’s capacity to run. Others, such as Mod Pizza, have actually directly prevented insolvency via a final sale.
Restaurants are not the only firms looking for insolvency security as high rates of interest evaluate on companies. Chapter 11 filings have actually climbed up 49% this year sinceAug 20, according to BankruptcyWatch. Mall store Express, assisted living facility chain LaVie Care Centers and Joann Fabrics and Crafts are amongst the firms that have actually declared insolvency security this year.
Here are the 10 noteworthy dining establishment chains that declared insolvency security in 2024:
Roti
Mediterranean fast-casual chain Roti declared Chapter 11 insolvency security onAug 23. The business stated it is collaborating with its property managers and providers to maintain its 22 areas open while it looks for a brand-new customer or capitalists.
The business started battling throughout the Covid -19 pandemic since about half its areas remained in midtown enterprise zone, CHIEF EXECUTIVE OFFICER Justin Seamonds stated in a declaration at the time of the insolvency declaring. New capitalists assisted it hang on, yet the current slump in customer investing caused bankruptcy.
Roti had actually elevated $58 million since June, according to Pitchbook.
Buca di Beppo
People eat outside a Buca di Beppo dining establishment in San Diego onAug 11, 2020.
Bing Guan|Bloomberg|Getty Images
Buca di Beppo proclaimed insolvency onAug 5. The Italian American chain is maintaining 44 of its areas open while it reorganizes, and prepares to open up one more dining establishment, as well.
The business criticized its monetary troubles on increasing prices and labor difficulties, according to court filings.
Buca di Beppo was established in 1993 and marketed to Planet Hollywood in 2008, complying with an accountancy rumor entailing several of its magnates.
World of Beer
The outside of World of Beer at Crossgates Mall in Guilderland, New York.
Lori Van Buren/|Albany Times Union|Hearst Newspapers|Getty Images
Tavern chain World of Beer declared insolvency security onAug 2. The business criticized high rates of interest, rising cost of living and a sluggish go back to pre-pandemic eating routines.
World of Beer prepares to reorganize and finish leases at underperforming areas via insolvency.
The business was established in 2007, when craft beer appeal was skyrocketing. These days, craft beer sales have actually dropped as customers extensively consume alcohol much less.
Rubio’s
Rubio’s Restaurants declared Chapter 11 insolvency security inJune The fast-casual chain, recognized for its fish tacos, had 86 areas at the time throughout California, Nevada and Arizona.
The business stated increasing food and energy prices, the change to crossbreed job reducing lunch website traffic and base pay walks in California placed way too much stress on several of its dining establishments.
In August, Rubio’s agreed to a sale to an affiliate of TREW Capital, one of its lenders.
The restaurant company previously filed for Chapter 11 bankruptcy in 2020.
Melt Bar & Grilled
In June, the Cleveland-based chain said it was struggling to pay its vendors and landlords. It turned to Chapter 11 to save the business.
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 dwindled to four restaurants by the time of its bankruptcy filing.
Kuma’s Corner
Kuma Holdings, the parent company of Kuma’s Corner, filed for bankruptcy protection in June.
The midwestern 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 displayed on a plate at a Red Lobster restaurant in Austin, Texas, on May 20, 2024.
Brandon Bell | Getty Images
Seafood giant Red Lobster filed for bankruptcy protection in May, citing a “difficult macroeconomic environment, a bloated and underperforming restaurant footprint, failed or ill-advised strategic initiatives, and increased competition.”
One scapegoat for its insolvency was its disastrous “endless shrimp” promotion in 2023. But a less-obvious culprit was a lease-back agreement made under a prior owner that made Red Lobster’s leases too expensive, especially as sales fell.
On Tuesday, the investment group buying Red Lobster tapped former P.F. Chang’s CEO Damola Adamolekun as the company’s next leader if it exits Chapter 11 successfully.
Tijuana Flats
A Mexican-style pizza from at 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 sold the fast-casual Tex-Mex chain to Flatheads LLC as part of the restaurant company’s restructuring.
The chain was founded in 1995.
Sticky’s Finger Joint
Chicken-tender chain Sticky’s Finger Joint also declared bankruptcy in April. Rising commodity costs, the hangover from the pandemic and legal expenses from a trademark case brought by rival Sticky Fingers led the company to restructure.
Sticky’s was founded in 2012. By 2023, it had annual sales of $22 million, according to a court filing.
Boxer Ramen
The Portland, Oregon ramen chain filed for Chapter 11 bankruptcy protection in February. In late April, it abruptly closed all four of its locations, more than a decade after the chain’s founding.
