In the ever-changing and fast-paced world of the restaurant industry, success is a delicate balance of culinary innovation, marketing strategies, and what’s going on with the economy. While many chains have been able to maintain longevity for years, a high percentage have watched their fortunes plummet and ultimately filed for bankruptcy due to significant financial struggles. In this post, we’ll look at the stories behind 18 former restaurant chains in the United States that once boasted popularity and acclaim but have since shuttered due to a slew of ill-conceived ideas or just plain unforeseen challenges.
Sbarro
Sbarro used to be present in malls and food courts across the U.S. Sbarro’s is famous for its New York-style pizza. However, because their food was unhealthy, Sbarro’s became less popular and filed for bankruptcy in 2014.
Friendly’s
Friendly’s was for years recognized as a casual family chain with a distinguished status of its old-fashioned ice cream. However, changing consumer needs, financial missteps, and the gap in responding to the era led Friendly to file for bankruptcy in 2011. The friendly image the people had in mind didn’t fit into the 21st century.
Bennigan’s
The popular casual dining chain Bennigan’s was in dire straits when the 2008 financial crisis arrived. Crushed by debt and slumping sales, the chain filed for Chapter 7 bankruptcy in 2008. In the wake of the 2008 bankruptcy, many of the restaurant’s well-known locations condemned their doors forever.
Chi-Chi’s
Chi-Chi’s, a restaurant chain famous for its excellent Tex-Mex cuisine until two decades ago, has disappeared. Three years after announcing that it was changing its name to Prandium, the struggling company said today that it had filed for Chapter 11 bankruptcy protection because of falling sales and the rising price of corn. There were 210 Chi-Chi three years ago; today there are just seven left.
Steak and Ale
The Steak and Ale was hugely successful in the “casual dining” category. It was known for its affordable steaks and an unlimited salad bar. The Steak and Ale couldn’t handle new competition and new types of restaurants like T.G.I. Fridays. The Steak and Ale started to falter in the 1980s when a new wave of casual dining started with T.G.I. Friday’s and Chili’s Bar and Grill. These restaurants would invite a neighborhood into their establishments with affordable food, a family-friendly environment, and a bar after the restaurateur, creator, and co-founder of Steak and Ale.
Planet Hollywood
Another chain of failed restaurants is Planet Hollywood. This Hollywood-themed restaurant is covered in movie premier memorabilia. This lack of management and over-saturation caused major money issues within the company, forcing it to restructure at the beginning of 1999. However, within two months of that, unsuccessful spending caused them to file for bankruptcy.
Damon’s Grill
Damon’s Grill was a successful casual dining chain focused on ribs and barbecues and targeted families throughout the 1990s. Damon’s Grill could not sustain its place on the market as competition grew and tastes changed and ultimately declared bankruptcy in 2009. They could not stay in business by not updating their menu and competing with today’s food trends.
Fuddruckers
People who loved Fuddruckers couldn’t get enough of it. This chain kept its top place by allowing customers to make their own sandwiches and offering large sizes. Fuddruckers had money problems–it declared bankruptcy in 2010. Many owners tried turning around the brand, but no one succeeded. That resulted in even more locations closing.
Old Country Buffet
As a classic AYCE buffet, Old Country Buffet thrived for many years until shifting consumer dining trends, individual health awareness and increased competition from various other food options forced the chain to file Chapter 11 in February 2016.
Quiznos
Quiznos used to be one of the best submarine sandwich shops you could buy from until new shops like Subway and fast food places like McDonald’s came about. Sadly, Quiznos couldn’t keep its business alive. Around 2014, Quiznos filed for bankruptcy due to the tremendous amount of money it owed and the many fights Quiznos had with those who ran its franchises.
Johnny Rockets
Known for the throwback 1950s diner decor and its classic American fare, Johnny Rockets is a chain that struggled throughout the casual dining downturn. The chain filed for bankruptcy in 2020, and it serves as a reminder that even some of the nation’s best-known names aren’t immune to the pressures and competition of today’s restaurant market.
Marie Callender’s
Marie Callender’s was a beloved family restaurant that was famous for their pies and comfort food. However, they went bankrupt in 2011 and then again in 2019 because they needed help to keep up with the new millennials and their changing food tastes and rising labor costs.
Charlie Brown’s Steakhouse
Charlie Brown’s Steakhouse, long a mainstay in the East Coast dining scene, was forced to declare Chapter 11 bankruptcy protection in March 2010. The once-ubiquitous steakhouse brand, whose heyday was in the 1980s, failed to evolve with shifting consumer tastes, exacerbating its decline.
Hooters
The company, Hooters, was near bankruptcy after its 30th year of business. They had to cope with re-branding and appealing to a much larger client. Hooters also had to find the best way to pay off the 30 years of debt that they were in.
Ryan’s Buffet
In its day, Ryan’s Buffet was a popular choice for affordable family dining. However, as tastes shifted and other options flooded the market, it became increasingly difficult for the company to stay above water, financially speaking. In 2016, Ryan’s Buffet declared bankruptcy, leading to the closure of many of its locations.
Fatburger
Fatburger filed for Chapter 11 bankruptcy protection back in 2009 due to financial issues but is still in business. The famous burger chain re-emerged from bankruptcy after restructuring and has new plans to revive its brand. This demonstrates how a company can survive by making poor decisions or not adapting to market changes by changing its strategy.
TGI Fridays
During the changing market conditions, TGI Fridays persisted within the food industry. In the early 2010s, the company faced financial difficulties; however, it resolved these by privatizing TGI Fridays and evaluating what strategic changes needed to be made in order for them to thrive in the industry.
Ruby Tuesday
Ruby Tuesday, a laid-back favorite among many diners, had seen its sales and debt obligation rise. In 2020, they filed for bankruptcy and closed many of their restaurants. The informal dining company had suffered because it couldn’t keep up with the preferences of new customers and the intense competition of other dining companies popular with its customers.