These Restaurant Chains Are on the Verge of Disappearing Completely
It’s no secret that the restaurant business has been failing in recent years. It’s partly because there are too many choices, particularly when it comes to fast food. Labor shortages and overhead costs have also added to the trouble. Though total restaurant sales will hit $899 billion in 2020, according to the National Restaurant Association, some restaurants are still struggling to bounce back. Here’s a list of restaurants that are in serious danger of closing down completely.
When Applebee’s first opened in 1980, it was the hot spot for dining. However, over the years, the chain has declined. In the past few years, Applebee’s has closed over 120 locations, dropping down to around 1,800 physical restaurants.
The owner of the restaurant chain, Dine Brands, has been trying to come up with better deals to bring in customers, like the $1 alcoholic beverages. Other ideas include healthier menu options, takeout and delivery services. However, it doesn’t seem like these plans are working. Applebee’s plans to close another 20 locations in 2020.
Carrabba’s Italian Grill
A restaurant chain owned by Bloomin’ Brands, Carrabba’s Italian Grill was founded back in 1986 in Houston, Texas. The family-style Italian restaurant quickly became a huge success and branched out all over the country with hundreds of national and international locations.
However, customers have slowly been losing interest in Carrabba’s. Bloomin’ Brands has been steadily closing several of its underperforming restaurants, including multiple Outback Steakhouse, Bonefish Grill and Carrabba’s locations. In 2020, there are plans to close 43 more locations, so Carrabba’s might not be around too much longer.
Sbarro has been around for over 20 years, but its once-huge success has declined over time. Part of this is due to the quality of its pizza, which is not made to order. The chain is also millions of dollars in debt.
Another issue is that Sbarro, typically located in shopping malls, doesn’t deliver. Shopping malls in general are on the decline as well thanks to online shopping, so there’s no reason to head to the food court. Over the past 15 years, Sbarro has closed hundreds of its eateries, including its historic Times Square location in late 2019.
When it first opened in 1972, Ruby Tuesday became known for its fresh ingredients and handcrafted cocktails. However, in recent years, the restaurant chain has been on a major decline when it comes to dine-in customers.
Over the past 10 years, the dining chain has shrunk by nearly half. Between 2018 and now, Ruby Tuesday has shut down roughly 76 locations. The parent company, NRD Capital, released an optimistic statement saying that the restaurant can recover as long as it can “deliver on the basics.” Only time will tell, but it’s not looking too good.
Krystal is a Southern restaurant with menu offerings similar to White Castle. The fast food chain currently has 360 locations but has closed several in recent years and is experiencing financial trouble.
The chain filed for bankruptcy in late January 2020 due to owing somewhere between $50 to $100 million. Krystal has 182 company-owned restaurants and 116 franchise locations in multiple states in the South, including Georgia, Tennessee, Alabama, Florida and Kentucky. Though the company is hopeful that these bankruptcy proceedings will help, the future isn’t clear for this chain.
Bar Louie is known as a popular happy hour spot with good food and drinks. However, the restaurant chain has been going into debt and quietly having to close locations due to expanding too quickly.
At one point, Bar Louie had 134 locations in 26 states but had to file Chapter 11 bankruptcy protection to deal with floundering finances. The chain is currently over $100 million in debt, which is a big amount to bounce back from. Unfortunately, there are only a little more than 90 locations left across the country.
Houlihan’s has also been another popular happy hour spot over the years. However, it’s been on a major decline due to its inability to attract new customers, namely millennials.
The former parent company of Houlihan’s, HRI Holding Corp, filed for Chapter 11 bankruptcy protection in November 2019 after acquiring $50 million of debt. At the same time, the company accepted an acquisition offer from Landry’s for $40 million and the assumption of liabilities. Previously, Houlihan’s had 84 locations, but now it only has 47 locations. Landry’s may turn things around, but its future looks bleak.
In the age of the #MeToo movement, it’s really no wonder that Hooters would be facing challenges. The restaurant’s notorious uniform of a tight shirt and shorts for waitresses and its hiring practices based on appearance have been highly offensive to consumers.
In the last 10 years, Hooters has closed over 7% of its stores and has lost millions of dollars in revenue. In trying to change with the times, Hooters has opened “fully clothed” locations called Hoots, where both men and women work in khakis and regular shirts and serve up pretty much the same menu. Who knows if this decision will help this struggling chain?
At its peak in the 1990s, Boston Market had over 1,100 locations. Today, it has fewer than 400 locations. Unfortunately, the chain hasn’t updated its menu or look — which is less appealing to younger customers — very much.
Boston Market also had to file for bankruptcy in recent years, which forced a closure of 700 locations at the same time. While the chain signed a development deal in 2016 to open dozens of restaurants in the Middle East, it’s likely that its popularity will continue to wane in the United States.
Papa John’s has gone downhill in recent years, not because of the quality of its pizza but because of controversy with its founder, John Schnatter. In 2018, Papa John’s lost its major sponsorship with the NFL after Schnatter blamed national anthem protests from players for lagging sales. He later was reported to have used a racial slur during a conference call.
With all of this controversy, Papa John’s continues to fall behind in sales and close stores. There are still over 3,000 franchisee- and company-owned stores in America — but for how long?
Golden Corral was a huge success following its launch in the early 1970s. In fact, buffets were once a big deal altogether. However, they have all declined in recent years due to the fact that younger generations want high-quality food instead of huge amounts of unhealthy food.
Golden Corral has had to close some locations behind the scenes due to this trend. The chain has a little under 500 locations still open nationwide. It’s working on remodeling its current restaurants, but Golden Corral may become a thing of the past soon.
Ponderosa was once a popular steakhouse in the South that offered customers hearty meals with “the spirit of the Old West and honest-to-goodness value,” according to the restaurant’s website. However, the 2008 recession greatly hurt the business, and it seems it hasn’t been able to recover.
In 2008, parent company Metromedia Steakhouses Co. filed for bankruptcy. The company was able to exit bankruptcy and has since been acquired by FAT Brands, but Ponderosa (and its sister company Bonanza) have still been shutting down locations quietly. There are only around 100 Ponderosa Steakhouses in operation worldwide.
Steak ‘n Shake
Steak ‘n Shake has been in the restaurant game since 1934. The 24/7 diner had great initial success and was able to expand throughout the United States, Europe and the Middle East. However, sales have declined rapidly in recent years.
The chain is in the midst of rebranding efforts in hopes of updating equipment at its locations. It has temporarily closed over 100 restaurants while it looks for new investors. If new financial opportunities don’t come in soon, Steak ‘n Shake could disappear completely.
Joe’s Crab Shack
Fewer than 10 years ago, Joe’s Crab Shack had almost 140 locations across the country. However, now there are only around 60 locations still operating. In 2016, the chain reported an operating loss of $16.6 million. In 2017, Joe’s Crab Shack filed for bankruptcy and closed 41 restaurants without giving employees notice.
Though the bankruptcy was supposed to help the chain, it upset both patrons and employees and further hurt sales. Another damaging move happened when Joe’s tested a no-tipping policy. Employees’ wages were increased to compensate for the lack of tips, but customers weren’t happy about the higher menu prices.
Noodles & Company
Noodles & Company has been in trouble, slowly closing underperforming locations behind the scenes. In 2017, the chain shut down 55 locations, and the next year, 10 more restaurants went out of business.
However, the team at the company has been working hard to turn things around. The company’s revenue has increased in the past two years with the addition of vegetable-infused noodles (like the zucchini noodle) in its dishes and other healthier options. With consumers flocking towards eating a little better, this trend may save Noodles & Company, but only time will tell.
Old Country Buffet
Launched in 1983, Old Country Buffet (and its sister restaurants Country Buffet, HomeTown Buffet and Ryan’s) was highly popular. Under parent company Ovation Brands, the chain once had over 700 locations nationwide.
In recent years, the buffet chain has been on a serious decline and has endured three bankruptcies, multiple health code violations and several unannounced closings. Buffet chains, in general, have struggled due to delivery options from competing restaurants. In the past 10 years or so, over 400 locations have closed. Today, there are only 17 Old Country Buffet restaurants left.
The Cheesecake Factory
When The Cheesecake Factory popped up on the scene in 1972, it was first a bakery and not a restaurant. In 1978, the transition was made to offer both delicious entrees and tasty desserts — and the rest was history.
Like many restaurants, The Cheesecake Factory has been struggling with rising labor costs and the fact that customers aren’t dining out as much. The restaurant has also had its share of legal issues with customers over the years. This all has led to declining sales, leaving just 195 Cheesecake Factory locations across the country.
Popular restaurant chain TGI Fridays suffered a major profit loss in 2019 after closing dozens of locations in recent years. The chain has seen an 11.3% decrease in overall sales and a 9.1% decrease in customer traffic.
The company recently merged with Allegro Merger Corp. to work on ways to become more profitable. TGI Friday’s has also been buying underperforming franchises and revamping menu options. It currently has 831 restaurants around the globe, 385 of which are in the United States. However, if it can’t bounce back soon, it may be lights out for this brand.
Declining sales and rising labor costs have really hit Red Robin hard. The chain ended 2018 with a $10.6 million loss and has had to close multiple locations in recent years, leaving 562 locations nationwide.
Long wait times and health scares have also added to the decline in sales. A recent report from Macro Axis puts the risk of bankruptcy for Red Robin at 43%, which is higher than that of the overall restaurant industry at 37%. Those endless fries may be ending sooner than we think.
Friendly’s was always a nice family restaurant with diner-style food options and multiple ice cream creations. At one point, there were over 500 locations in the United States. However, sales have declined in recent years due to market trends, which led to the closing of multiple locations.
A 2011 bankruptcy filing was supposed to help get the restaurant chain on track, but it didn’t happen in this case. Though the company is trying to revamp menu options and business practices, it seems like Friendly’s has fallen out of favor with consumers. There are only 167 Friendly’s locations spread across the East Coast.
Another struggling restaurant is Mexican eatery Qdoba. Though the chain was highly successful after its launch in 1995, it has struggled to make real profits in the past few years.
Qdoba was previously owned by Jack in the Box, but the company was sold to Apollo Global Management in 2017. However, there has been a long history of sales slumps as well as a failure to capitalize on health scares at competing restaurant Chipotle. Although the chain has over 700 restaurants left, no one knows how long they’ll be around.
Buffalo Wild Wings
Buffalo Wild Wings has always been a great place to get some wings and drinks while watching sports with buddies. However, the company has had to raise its prices by 10% due to the rising costs of food. That hasn’t sat well with customers.
Profits for the business are down, which has caused the company to look into selling locations to franchisees. Buffalo Wild Wings has around 1,200 locations, with a relatively even split between those that franchisees own and those the company owns. However, the chain will have to come up with more innovative ideas to stay afloat.
Checkers and Rally’s
Checkers and Rally’s actually have a loyal customer base that loves the seasoned fries and other menu options. However, the restaurants have still had to close dozens of locations in recent years. It’s partly due to a sales slump caused by fewer people dining out, which is consistent across the entire restaurant industry.
However, another big reason is reports of unclean locations! Several have received health code violations, which is enough to turn any good-paying customer away. These chains will have to step up their game if they want to stick around for the long run.
Jack in the Box
Jack in the Box is severely behind the beat when it comes to other fast-food competitors like McDonald’s and Burger King. According to a report released by the company, hundreds of the chain’s locations across the country have had negative operating income in recent years.
While the company has made internal promotions and is working towards better customer experiences and food quality, there’s a long road ahead to restore the business. It might be a little too late for Jack in the Box to survive, but customers will have to wait to see.
Singer and actor Roy Rogers first started his own chain of burger restaurants in the late 1960s. By the 1990s, the chain had over 600 locations throughout the country.
After the chain was sold to parent company Imasco, which also ran the Hardee’s restaurant chain, the brand began to decline. It was mainly because many of the restaurants were turned into Hardee’s locations, which was a major turn-off for customers. As of August 2019, Roy Rogers only has 48 locations in the entire country. It appears that the decline will continue in years to come.
At its launch in 1990, Baja Fresh Mexican Grill was at the top of the Mexican-food chain with over 300 locations. Its use of fresh ingredients and the special “Salsa Baja” at the restaurants’ salsa bars attracted many customers all over the country and even internationally.
After Wendy’s bought the chain in the early 2000s, things stood a chance. But sales began to decline, and Wendy’s decided to get out of dodge by selling the business. Now, Baja Fresh has only 165 locations in the United States, Dubai and Singapore.
Burger restaurant brand Fuddruckers began in Houston in the late 1970s. The chain proclaimed that it had “the world’s greatest hamburgers,” and its popularity with customers seemed to back that up. Sadly, not even the great food could help when hard times came.
After taking a major hit in sales during the 2008 financial crisis, Fuddruckers has struggled to rise back up to its previous glory. Now under Luby’s, the chain only has 150 locations left. Luby’s has sold most of the locations to franchisees. Luby’s owns 49 locations today, which is down from 60 locations in 2018.
O’Charley’s is known for its Southern eats and charm and mainly takes root in the South and Midwest. Sales have been declining due to the food quality (or lack thereof) as well as the restaurant’s failure to truly stand out in the midst of so many other competitors.
The dining chain has also been hit with several big lawsuits due to customer safety and unfair employee pay. Not only did this hurt the chain’s finances, but it also hurt its reputation. O’Charley’s has only 189 locations left in the United States as of 2019.
Quiznos was once a popular spot to get tasty subs after its launch in 1981. In fact, this restaurant chain and Subway were in fierce competition with each other for a long time.
As popular as Quiznos once was, its shops have been disappearing in recent years. After the 2008 financial crisis, Quiznos struggled to bounce back. The chain went from having 5,000 locations around the country to fewer than 400. While fans of the chain are optimistic that things will change, it seems likely that sales at Quiznos will continue to decline.
Bojangles’ restaurants were once very popular throughout the country. Half of the chicken-and-biscuit restaurants are located in North Carolina and South Carolina, where Bojangles’ is still beloved. Everywhere else? Not so much.
The chain has closed many of its locations in Alabama, Kentucky, Tennessee and Virginia. Current owners the Jordan Company and Durational Capital Management are trying to make changes to the menu in hopes of bringing in new customers. However, it appears likely that this chain may be closing more locations in the future.
The so-called “International House of Pancakes” has been a little slice of commodified Americana since it first opened in 1958. However, as Americans become more health conscious, the market for carb-heavy breakfasts has dwindled — and IHOP has faced the consequences.
In 2018, IHOP attempted to “rebrand,” or at least expand the public’s opinion of what it had to offer by trading its “all-day breakfast” vibe for more of a diner feel. In a publicity stunt that didn’t pan(cake) out how the chain intended, the restaurant changed its name to “IHOB,” as in the “International House of Burgers.” Sadly, IHOP will close at least 30 to 40 stores this year.
Everything is bigger in Texas — well, everything except Luby’s profits. Known for deep-fat frying anything under the sun, Luby’s used to be on every corner of Texas’ towns and cities, in the same way Dunkin’ covers New England.
The chain’s sales have declined pretty consistently for the last few years. Much like IHOP, this could be because Americans are eating a bit healthier these days. Regardless of the reason, Luby’s closed 84 locations in 2019 and, this year, that trend will continue, especially in the wake of the COVID-19 closures.
Taco Bell may tell its customers to “Live Más,” but, in the wake of COVID-19 and a trend toward Americans eating healthier foods, the chain may need to do some serious recalibrating if it wants to stick around. This one may come as a shock, because, much like McDonald’s, Taco Bell is more than an affordable, Crunchwrap Supreme-making goldmine — it’s a pop culture symbol.
However, the Mexican fast food chain shouldn’t rest on its laurels. In 2019, Taco Bell shuttered half a dozen of its hundreds of locations. Okay, that isn’t a whole lot, but the fast food hotspot has seen a decline in sales. To combat that, Taco Bell opened a pop-up hotel in Palm Springs, California. That’s not Baja Blast you smell; it’s the panic to remain relevant.
While Subway may not be struggling as much as competitor Quiznos, it’s still not an easy path forward for the sandwich chain. In the early 2000s, Subway marketed itself as the healthy fast food option thanks to its popular “Eat Fresh” campaign. However, Americans are wising up to the fact that Subway isn’t as healthy as it claims. (Yoga mat-Breadgate, anyone?)
Obviously, the Jared Fogle scandal hasn’t helped the brand, but its recent series of closures actually started back in 2014, when Subway’s success became its Achilles’ heel — too many locations were opening too quickly. In 2018, roughly 1,100 locations shut down across the United States and, although the chain was reported to have 24,000 operating chains in 2019, the closures continued.
If you’ve ever craved a quick-and-easy pot pie, you’ve probably found yourself in the frozen food section of your local grocery store, buying a Marie Callender product. What you might not know is that Marie was a real person.
Back in the 1940s, her pies became so popular that she opened a restaurant, which spawned a chain. Co-owned by Perkins, the chain recently filed for bankruptcy and plans to sell most of its assets. The causes? Low customer traffic coupled with rising food and labor costs. Now, just 24 of the original 50 Marie Callender’s locations are still serving up pot pies.