The Purple Lobster brand is displayed exterior a closed restaurant in Torrance, California on Might 14, 2024.
Patrick T. Fallon | Afp | Getty Photos
Restaurant chapter filings have elevated thus far this 12 months, reflecting a broader rise in company bankruptcies throughout sectors.
A minimum of 10 restaurant chains, not together with multi-unit franchisees, have filed for chapter in 2024. August alone introduced three Chapter 11 filings from big-name eateries. The rise in bankruptcies comes as diners reduce prices, labor prices proceed to rise and authorities support from the Covid period disappears.
A number of extra restaurant chains could file for chapter earlier than the tip of the 12 months. BurgerFiwhich additionally owns Anthony’s Coal Fired Pizza & Wings, mentioned in a regulatory submission in mid-August that there was “substantial doubt” concerning the firm’s capability to function. Others, like Mod Pizza, have narrowly prevented chapter by promoting on the final minute.
Eating places aren’t the one firms looking for chapter safety as excessive rates of interest weigh on enterprise. Chapter 11 filings are up 49% this 12 months as of Aug. 20, in line with BankruptcyWatch. Retailer at Express Mallnursing residence chain LaVie Care Facilities and Joann Fabrics and Crafts are among the many firms that filed for chapter safety this 12 months.
Listed here are the ten well-known restaurant chains which have filed for chapter safety in 2024:
Roti
Mediterranean comfort retailer chain Roti filed for Chapter 11 chapter safety on August 23. The corporate mentioned it’s working with its landlords and suppliers to maintain its 22 places open whereas it seems to be for a brand new purchaser or traders.
The corporate started to battle throughout the Covid-19 pandemic as a result of roughly half of its places have been in central enterprise districts, Chief Govt Officer Justin Simmonds mentioned in a press release on the time of the chapter submitting. New traders helped maintain it afloat, however the latest droop in shopper spending led to chapter.
Roti had raised $58 million as of June, in line with Pitchbook.
Beppo’s gap
Folks dine exterior the Buca di Beppo restaurant in San Diego on August 11, 2020.
Bing Guan | Bloomberg | Getty Photos
Buca di Beppo declared chapter on August 5. The Italian-American chain is protecting 44 of its places open whereas it restructures and plans to open yet another restaurant.
The corporate blamed its monetary woes on rising prices and labor challenges, in line with court docket paperwork.
Buca di Beppo was based in 1993 and bought to Planet Hollywood in 2008 following an accounting scandal involving a few of its senior executives.
The world of beer
The outside of World of Beer at Crossgates Mall in Guilderland, New York.
Lori Van Buren/ | Albany Instances Union | Hearst Newspapers | Getty Photos
Tavern chain World of Beer filed for chapter safety on August 2. The corporate blamed excessive rates of interest, inflation and a sluggish return to pre-pandemic consuming habits.
World of Beer plans to restructure and terminate leases at underperforming places by means of chapter.
The corporate was based in 2007 when craft beer was rising in reputation. As of late, craft beer gross sales have declined as customers typically drink much less.
of Rubio
Rubio’s Eating places filed for Chapter 11 chapter safety in June. The comfort retailer chain, identified for its fish tacos, had 86 places on the time in California, Nevada and Arizona.
The corporate mentioned rising meals and utility prices, a shift to hybrid operation lowering lunchtime visitors and will increase in California’s minimal wage are placing an excessive amount of strain on a few of its eating places.
in April, California Raises Minimum Wage for these working in fast-food chains with greater than 60 seats to $20 an hour. Days earlier than submitting for chapter, Rubio’s closed 48 underperforming eating places in California.
In August, Rubio’s agreed to a sale to an affiliate of TREW Capital, one in every of its lenders.
The restaurant firm beforehand filed for Chapter 11 chapter in 2020.
Soften Bar & Grilled
In June, the Cleveland-based chain mentioned it was struggling to pay its distributors and landlords. He turned to Chapter 11 to avoid wasting the enterprise.
The corporate, identified for its grilled cheese sandwiches and craft beer choices, was based in 2006. It had 14 places at its peak, however its footprint had dwindled to 4 eating places by the point it filed for chapter.
Kuma’s nook
Kuma Holdings, the dad or mum firm of Kuma’s Nook, filed for chapter safety in June.
The Midwestern burger chain opened its first location in 2005, setting itself other than the competitors with its steel and punk-themed menu objects.
Purple lobster
A menu is displayed on a plate at a Purple Lobster restaurant in Austin, Texas, on Might 20, 2024.
Brandon Bell | Getty Photos
Sea big Purple Lobster filed for bankruptcy protection in Might, citing a “troublesome macroeconomic surroundings, bloated and underperforming eating places, failed or ill-advised strategic initiatives and elevated competitors.”
One scapegoat for its insolvency was a disastrous “limitless shrimp” promotion in 2023. However a much less apparent wrongdoer was a leaseback settlement entered into by a earlier proprietor that made Purple Lobster’s leases too costly, particularly as gross sales fell.
On Tuesday, the funding group shopping for Purple Lobster tapped former PF Chang CEO Damola Adamolekun as the corporate’s subsequent chief if it efficiently emerges from Chapter 11.
Tijuana Flats
Mexican-style pizza from Tijuana Flats.
Jeff Greenberg | Common Photos Group | Getty Photos
In April, Tijuana Flats introduced new possession, a Chapter 11 chapter submitting and the closing of 11 eating places in a single press launch.
AUA Personal Fairness Companions bought the Tex-Mex fast-food chain to Flatheads LLC as a part of a restructuring of the restaurant firm.
The chain was based in 1995.
Sticky’s finger joint
Hen tender chain Sticky’s Finger Joint additionally filed for chapter in April. Rising commodity costs, a hangover from the pandemic and authorized prices from a trademark lawsuit introduced by rival Sticky Fingers have prompted the corporate to restructure.
Sticky’s was based in 2012. It has annual gross sales of $22 million by 2023, in line with the lawsuit.
Boxer Ramen
The Portland, Ore.-based ramen chain filed for Chapter 11 chapter safety in February. In late April, it abruptly closed all 4 of its places, greater than a decade after the chain was based.
