THERE have been three bankruptcy filings for some beloved restaurant chains over the past few months.
Amid the restructuring and some closures, diners are left wondering whether their favorite food and drink items will stick around.
Several restaurant chains went under last year, including Red Lobster, TGI Fridays, and Burger-Fi, to name a few.
Many have cited struggles with consumer habits, inflation, and supply chain issues that are still recovering from the height of the coronavirus pandemic as contributing factors to financial struggles.
Some more bankruptcies are now continuing into 2025.
There are at least three more notables for the year thus far, and it’s only the end of April.
HOOTERS
After weeks of rumors, Hooters officially filed for Chapter 11 bankruptcy protection earlier this month.
It cited about $370 million in debt and pledged to sell off about 151 company-owned restaurants as part of restructuring efforts.
Two franchisees will be picking up the locations, and the CEO of Hooters America, Sal Melilli, assured customers that the current lineup of restaurants would remain operational through the process.
“Our renowned Hooters restaurants are here to stay,” Melilli vowed in a statement.
After the bankruptcy proceedings come to a close, all Hooters locations will be franchisee-owned.
Chiefs also said the restaurants will undergo a “re-Hooterization” as the brand tries to reach a broader customer base, removing previously famed promotions like Bikini Nights in favor of more family-friendly designs, per Bloomberg.
While there won’t be any further closures in the immediate future, Hooters axed 44 restaurants in 2024 before this year’s bankruptcy.
BAR LOUIE
Beloved gastropub chain Bar Louie also went bankrupt at the end of last month for the second time since it was founded in Chicago in 1990.
The first was ahead of the height of the coronavirus pandemic in January 2020, with nearly 40 of its 134 locations at the time shuttering.
While it restructured and re-emerged, its second filing on March 26 of this year showed about $50 to $100 million in debt still owed to creditors and assets of around $1 to $10 million.
How does bankruptcy work?
Bankruptcy is a specific legal process that helps companies eliminate debt they can't repay.
The process allows businesses to start fresh and gain access to new credit.
Supervised by federal courts, bankruptcies allow a company to sell off its assets more easily to pay off creditors, according to Investopedia.
Chapter 11, a common process for companies, is used to restructure a business with the goal of remaining open – even if it means selling off most of the company’s properties.
Chapter 7, on the other hand, sells all of a company’s assets, putting it out of business.
Chapter 15, alternatively, allows for collaboration between American and foreign courts to conduct bankruptcy proceedings with “parties of interest involving more than one country,” per the United States Courts.
In its first-day declaration, a document that provides the bankruptcy court with an overview of the reasons for a business’s filing, Bar Louie cited “various financial and operational challenges, including a number of underperforming locations, increased costs of operation, and mounting macroeconomic pressures” as contributing elements of its financial downfall.
A Bar Louie spokesperson previously confirmed to The U.S. Sun that 14 underperforming locations, all corporate-owned, were shut down leading up to the bankruptcy.
Bar Louie will restructure, and is operating its 31 remaining corporate locations as normal through the bankruptcy process, along with the 17 franchised locations in 19 states.
CORNER BAKERY CAFE
While it wasn’t as recent as Hooters and Bar Louie, Corner Bakery Cafe is making post-bankruptcy changes.
Corner Bakery Cafe was founded in 1991 in Chicago and has about 100 locations across 18 states and Washington DC.
It filed in February 2023 alongside subsidiaries CBC Restaurant Corp and CBC Cardco Inc.
After quickly emerging with new owner SCCP Restaurant Investors, the bakery chain improved average unit volumes by $200,000, per Restaurant Dive.
Since 2024, Corner Bakery Cafe has also been making investments of about $6 million in remodels and design improvements.
Some renovations have already taken place in California, with another in Pennsylvania.
Interior and exterior changes, new flooring, seating, decor, paint, beverage counters, and patio furniture are just some updates.
Select Corner Bakery Cafe locations are also getting self-order kiosks as it is “furthering the company’s investment in delivering a better guest experience through technology,” per a statement.
All upgrades are expected to be completed by 2027, and a grand opening for a new location in Irvine, California, is slated for May.
FRANCHISE FALLOUT
At least three franchisees for Burger King have also gone under in the past two years.
Consolidated Burger Holdings, a major franchisee for Burger King locations nationwide, filed for Chapter 11 bankruptcy most recently.
It was officially submitted on April 14, and the franchisee cited about $36 million in debt.
Burger King locations under Consolidated Burger Holdings’ purview are in Georgia and Florida, with a total of 57.
At least 20 of those restaurants are in the Florida Panhandle alone.
Another 19 are in South Florida, and the remaining 18 are spread across Georgia.
Consolidated Burger Holdings not only cited the staggering debt amount, but it faced declining sales over the past years, per court documents viewed by QSR.
Its annual revenue for 2024 was about $67 million, a $10 million decrease from the year prior.
Executives blamed inflation and changes in consumer habits, among other factors, for the financial struggles in the filing.
Consolidated Burger Holdings is also one of two other Burger King franchisees to file for bankruptcy since 2023.
Toms King and Premier Kings also sought Chapter 11 bankruptcy protection, with about $35.5 million in debt cited by the former.
Toms King later sold its remaining Burger King restaurants to four separate buyers for $33 million.
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