Multiple popular restaurant chains filed for bankruptcy in 2024, shocking many Americans in the process. Analysts have since warned that Chapter 11 filings may only continue to surge before the year’s end, shedding light on the many issues the restaurant industry continues to face amid rising labor costs and a drop in consumer spending.
Here are five popular American restaurant chains that have filed for bankruptcy this year alone.
1. Rubio’s
In June, the fast-casual restaurant chain Rubio’s Restaurants filed for bankruptcy, citing a rise in food costs, as well as a drop in lunchtime traffic thanks to many Americans now working in hybrid environments after the COVID-19 pandemic.
Rubio’s also claimed that California’s minimum wage hikes, which raised fast food workers’ wages to at least $20 an hour, were also to blame for this Chapter 11 filing. Only several days before this bankruptcy filing, Rubio’s shut down 48 locations in the Golden State.
This isn’t the first time Rubio’s has filed for bankruptcy, either. Back in 2020, the company also filed for Chapter 11 bankruptcy.
2. Buca di Beppo
The Italian American chain Buca di Beppo declared bankruptcy in August. According to the popular company, rising food costs and various labor challenges ultimately led to this filing.
Though the chain has filed for bankruptcy, it intends to keep all 44 of its locations open during this phase of restructuring. Bica di Beppo also plans to open up a new restaurant, as well.
3. Roti
Roti also filed for bankruptcy in August. Similarly to Buca di Beppo, Roti plans on trying to keep all of their 22 locations open during this process, though the company is now seeking a new buyer.
The fast-casual Mediterranean chain explained that they first began to struggle during the COVID-19 pandemic. Recently, as fewer Americans have chosen to go out to eat at restaurants, their struggles only grew, eventually leading them to file for Chapter 11 bankruptcy protection.
4. Kuma’s Corner
Kuma’s Corner’s parent company, Kuma Holdings, revealed it had filed for bankruptcy protection in June of this year. Kuma’s Corner, a Midwestern favorite, is known for its punk and metal-themed food items, such as their “Black Sabbath” burger.
Despite this bankruptcy maneuver, Kuma’s Corner has stated that all four locations will remain open. Ron Cain, Kuma’s president and current director of operations, explained, “We are not going anywhere.”
5. Red Lobster
Perhaps most notably, Red Lobster shocked many “endless shrimp” fans when it filed for bankruptcy protection earlier this year. According to the seafood giant, a Chapter 11 filing occurred because of a “difficult macroeconomic environment, a bloated and underperforming restaurant footprint, failed or ill-advised strategic initiatives, and increased competition.”
Various reasons have been given for why this beloved American restaurant chain has found itself in this position. Some analysts have pointed to 2023’s “endless shrimp” promotion, while others have claimed that the company’s lease-back agreement made Red Lobster’s restaurant leases much too expensive.
