Restaurant Bankruptcies Rival COVID-19 Numbers

February 10, 2025

Bob Coleman
Founder & Publisher

Restaurant Bankruptcies Rival COVID-19 Numbers

Says Citizens Bank in its February 2025 Restaurant Industry Insights

In 2024, the restaurant industry experienced a notable surge in bankruptcies, with several well-established chains struggling to stay afloat. 

This wave of bankruptcies emphasizes the urgent need for restaurant operators to innovate, streamline operations, and realign their strategies to better cater to shifting consumer behaviors and market dynamics.

Rising inflation, persistent wage increases, and escalating food costs, combined with a slowdown in guest traffic, have placed substantial pressure on operators, severely compressing profit margins and straining cash flows. 

Despite aggressive cost-cutting initiatives and efforts to enhance operational efficiencies, many chains have found it increasingly difficult to maintain profitability, particularly those slow to modernize or adapt to evolving consumer preferences.

The year 2024 witnessed an unprecedented wave of restaurant bankruptcies, rivaling historical peaks outside of the extraordinary disruptions of 2020. Iconic brands that once defined the American dining experience now face existential challenges, grappling with shifting consumer preferences and an evolving competitive landscape. The accelerated pivot toward fast-casual formats and delivery-driven models has intensified pressure on legacy operators, many of which have struggled to adapt to the digital-first, convenience-focused demands of modern diners. This confluence of market dynamics underscores the critical importance of innovation and agility in navigating the structural changes reshaping the industry.

Notable bankruptcy filings this year included: 

  • Red Lobster
  • TGI Fridays
  • Tijuana Flats
  • Tender Greens
  • Buca Di Beppo
  • BurgerFi
  • World of Beer
  • Rubio’s Coastal Gril

Additionally, major store closures among casual dining giants such as Bloomin’ Brands, TGI Fridays, Hooters, and Denny’s underscore the widespread impact on the sector, as operators contend with changing dining habits and heightened operational costs.