Red Lobster Are Not the Only Restaurants Closing Down

Red Lobster filed for bankruptcy on Monday, capping a week of turmoil for the biggest seafood chain in the U.S.

On May 13, the company announced the abrupt closure of at least 99 restaurants across 27 states, followed by an auction of equipment and fixtures from the shuttered locations. Fingers were pointed at “endless shrimp” deals and bad management.

And Red Lobster is not the only food chain in trouble. Pandemic restrictions, inflation and high interest rates combined have created a bitter environment for restaurant operators.

Clover Food Lab

Hopes for this Bostonian plant-based chain wilted after a bankruptcy filing in November.

Founded in 2008, Clover Food Lab operates seasonal food trucks and restaurants in Massachusetts.

Following the pandemic, like many restaurants, the brand struggled with sales and investment.

Yet the once 15-unit strong chain may be about to grow back stronger. In April a new management team was introduced who aspire to open almost 50 new locations by 2029.

Oberweis Dairy

Oberweis Dairy stores offered “premium” milk and ice-cream products, but this Illinois-based ice cream chain declared bankruptcy in April, citing a lack of investment in production capacity. The chain operated 40 locations.

Oberweis may soon be headed for greener pastures however, as it has since found a buyer in fellow Illinois-based dairy retailer Dutch Farms.

Etta Collective

Another Illinois-headquartered eatery firm that filed for chapter 11 bankruptcy in February, after defaulting on a $2.5 million loan to allow the restaurant to restructure its finances.

The owner of the Italian themed Etta Italian had already began shutting locations earlier in the year.

Tijuana Flats

Florida-based Tex-Mex chain Tijuana Flats will be sold to new owners and is shutting 11 restaurants after declaring chapter 11 bankruptcy following a “confluence of adverse events” which include increased costs and menu changes.

First founded in Winter Park, Florida in 1995, Tijuana Flats now has over 90 locations throughout the U.S. south, including restaurants in Alabama, Florida, North Carolina, and Tennessee. Ten of the 11 restaurants set to be closed were in Florida.

Chains In Trouble

Other well-known chains are also going through a rough patch, though have not filed for bankruptcy.

Cracker Barrel

The southern-country themed chain of restaurant and gift stores has faced declining foot traffic for five consecutive quarters, reporting another 4 per cent decrease during its most recent earnings call. Shares in the company fell 14.7 per cent following the announcement.

The restaurant attributes the downwards trend to inflation, ineffective marketing, and a need for improved guest experience.

Cracker Barrel Old Country Store plans to correct course with a $700 million brand overhaul including fresh menus and revitalized décor.

Boston Market

Formerly known as Boston Chicken, the Colorado-based fast casual chain Boston Market has suffered a string of lawsuits since 2020.

The restaurant has been sued more than 150 times in the last four years, including litigation over unpaid bills, rent, goods, and employee salaries.

Estimates put the chain at around 300 restaurants at the start of 2023. Just 79 still had their doors open by 2024 according to Boston Market’s store locator.

In an attempt to revive the brand, the company announced earlier this year that buy-in requirements are to be removed for prospective franchisees, in a bid to foster growth.

Applebee’s

Founded in summer 1980 by Bill and T.J. Palmer, by the late 1990’s Applebee’s had grown to become one of the largest sit-down chains in America, boasting 1000 stores.

The neighborhood bar and grill chain has struggled in recent years, discontinuing around 300 restaurants since 2017.

President of Applebee’s, Tony Moralejo, revealed during an earnings call that the chain’s parent Dine Brands Global are anticipating 25 to 35 more locations to shut this year.

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