In any event, here are the year’s notable bankruptcy filings.
Hooters
The venerable casual-dining chain is known for creating the so-called breastaurant category. But in many ways it’s more than that. It helped popularize chicken wings, for instance. And it demonstrated what a company can do with creative marketing.
Its bankruptcy is similarly notable but for the opposite reason. It was the third of three major casual-dining chain bankruptcies, following 2024’s Red Lobster and TGI Fridays. Each of those chains loaded themselves up with debt, sold off assets or both, despite clearly slowing demand.
And Hooters, like Fridays (and Fat Brands) took out its debt using securitized financing, proving that the debt instrument popular in the restaurant business has, unsurprisingly, been taken too far.
Bandwagon hoppers
The restaurant industry has an often-annoying habit of bandwagon hopping. No concept is too good not to be replicated, often over and over again. We’ve seen this over the years with bagels, “better burger,” the aforementioned breastaurant subsegment and, of course, frozen yogurt.
Whenever a concept catches fire, a bunch of people try copying that concept. Investors pump them with cash. Most start franchising and they put locations all over. The concepts grow too fast, consumers shift attention elsewhere and then problems come up.
Two big bankruptcies illustrate this. First, there’s Pinstripes, the bowling-and-bocce concept. It was part of a massive rush into the so-called eatertainment business combining food and activities, fueled by a post-pandemic rush to such concepts as consumers looked for something to do.
Pinstripes went public in a reverse merger in January 2024 with a $500 million valuation. It grew aggressively, using a lot of debt. But sales fell, and the company ended up in bankruptcy within 21 months of going public.
Then there’s Pieology. A decade ago, fast-casual pizza chains were all the rage, promising customizable, single-serve pizzas. But the concept has struggled over the past couple of years due to a proliferation of such concepts and weak sales driven by too many units, too aggressive growth and the fact that the pizzas just do not work well for delivery and takeout.
Pieology blamed its bankruptcy on the acquisition of 29 units from a struggling franchisee followed by a failed investment. But demand just wasn’t there.
Small filings
Most of the restaurant chains that filed for bankruptcy were small. That was not surprising—most restaurant chains are small, after all. But it also helped reveal one of the year’s biggest challenges: The economy was particularly tough on smaller companies.
Small “Subchapter V” bankruptcy filings soared 17% in August, according to Epiq Global. Overall commercial filings actually decreased.
A lot of smaller chains landed in bankruptcy, even if they did not fall under the smaller Subchapter V definition. They included Razzoo’s Cajun Café, Opa! Authentic Greek, Iron Hill Brewery and the plant-based chain Planta.
Chapter 22s
Repeat Chapter 11 bankruptcies—Chapter 22, as it were—are a common affliction in the restaurant space. A restaurant chain declares bankruptcy. The process is used to close some stores and cut debt. Some investor buys it, often using debt, and the same issues that caused the chain problems in the first place remain there. Also, many of those investors don’t exactly pump those chains with investment.
This past year was no different. Bravo Cucina Italiana and Brio Tuscan Grille, the two sister chains, filed for their second bankruptcy in five years. The Midwestern casual-dining chain Bar Louie filed for its second bankruptcy. And Bertucci’s declared its third bankruptcy, or what we’d call Chapter 33.
Earl Enterprises owns Bertucci’s. It also the owner of PB Restaurants, the operator of some Planet Hollywood locations, which filed for bankruptcy this year. That also represented a Chapter 33 for that chain.
Big franchisees
Brand struggles frequently find their way down to the franchisee level.
Matador Restaurant Group, a franchisee of Del Taco locations in Georgia and Alabama, filed for bankruptcy after that chain’s struggles led the company to take out merchant cash advances. Also, never take out merchant cash advance loans.
Consolidated Burger Holdings, a 57-unit Burger King franchisee, continued that chain’s unfortunate string of large-scale filings by operators. EYM Café, a large Panera Bread franchisee, declared bankruptcy, reflecting the bakery/café chain’s challenges. The franchisee itself has filed for bankruptcy with just about all of the concepts it operates, including Burger King and Pizza Hut.
The Mexican brands
Last but not least, a pair of notable Mexican casual-dining chains ended up in get-us-out-of-debt court.
On the Border, once owned by Brinker International but then sold in 2010 to Golden Gate Capital, which sold the chain in 2014, filed for bankruptcy after closing about half of its locations this year. Abuelo’s, the Texas-based chain, filed for bankruptcy in September.
Struggles among Mexican full-service chains have been relatively common since the emergence of fast-casual Mexican chains. And the simple proliferation of such concepts around the country.
