BANKRUPTCY is tearing into multiple sectors throughout the US, namely effecting the dining chains.
TGI Fridays, Red Lobster and Hooters have all recently fallen into bankruptcy, but how they have navigated this depends on the chain.
Americans are seemingly turning their backs on casual dining, but with these tales of woe has come moments of revelation and evolution.
The demand for more convenience and quicker service means that diners need to adapt to the changing times.
Ernest Baskin, an associate professor of food marketing at Saint Joseph’s University, said: “They’re trying to aim at the average middle consumer.
“When consumers start watching their budget, the middle shrinks.”
May chains have cited things like inflation, consumer habits and supply chain issues as the main reasons for their struggles.
So far in 2025, there have been three notable casual dining bankruptcies.
TGI FRIDAYS
The US Sun reported that TGI Fridays only has a handful of spots remaining in the US following its Chapter 11 filing.
Only 85 remain after the chain filed for bankruptcy in November 2024.
One of the main reasons for the downturn is the continued fallout from the Coronavirus pandemic.
At the time, the company said in a statement: “the pandemic was the “primary driver of our financial challenges.”
TGI Fridays still had 164 locations open at the time that its parent company filed for bankruptcy, but has since shuttered many spots throughout the bankruptcy process.
This includes 30 restaurants across the past month.
But there is some promising timers ahead for the chain, as it seeks to rescue itself.
Looking forward the remaining restaurants aim to add a new May menu focusing on food items popular among Gen Z diners.
This includes capitalizing on things like fusion foods and a greater emphasis on fresh-grilled steaks.
RED LOBSTER
Red Lobster has made similarly ambitious moves to claw its way back, as reported by The US Sun in March.
A lot of that change is being spearheaded by the guidance of CEO Damola Adamolekun.
The former leader at P.F. Chang’s wants to turn red Lobster back into a reliable chain, with customer service upgrades and menu changes.
He said: “We’re doing some new things on the menu using lobster and crab mostly.
“The differentiator for us is product, and I want it to be service too.
“If we win on those two it’s like okay, it’s not just a chain restaurant because it’s got something that you can’t get anywhere else.
“If you want lobster and you want it for $20, we’ve got the lobster roll for that price in certain markets.
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.
“At the same time, value is what you get for the price.
“If the hospitality is way better, the food is more interesting, the drinks are fun, and you pay the same price for all of that; people are going to perceive it as value.”
Red Lobster had previously faced years of underperforming sales and rising costs of food and labor.
It had already cut 50 restaurants in 2023 and recorded a loss of about $76 million.
Over another 100 shuttered during the bankruptcy proceedings.
HOOTERS
Out of the three, Hooters is the chain that had to do the most soul searching in order to get back on track.
Not only has the company ditched bikini nights now, as covered by The US Sun, but it is also trying to reinvent its brand from the ground up.
The company is trying to get back to its roots after filing for bankruptcy.
The company’s strange ,middle ground between casual and racy made it look increasingly outdated as the culture began to change around it.
Neil Kiefer, chief executive officer of the founder-owned unit, HMC Hospitality Group, which owns Hooters, said: “I’m calling it a re-Hooterization.
“You go to some parts of the country and people say, ‘Oh I could never go to Hooters, my wife would kill me’.
“That’s depressing to us. We want to change that.”
Apart from that, Hooters also struggled with the typical things of rising costs and a demand for more convenience among diners.
Hooters shuttered more than 40 locations last year, according to food service consulting firm Technomic.
That brought the total number in the US down to about 250 from a peak of 400 in 2008.
Mark Kalinowski, chief executive officer of restaurant-investing advisory firm Kalinowski Equity Research, said: “What was novel in the 1980s is a legacy business today.
“You’ve seen quick service and fast-casual taking market share from casual dining.”
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