America’s dining scene is in crisis, and even some of the biggest names in food aren’t safe.
These chains are shuttering stores, filing for bankruptcy, and slashing staff. Some have already entered Chapter 11 (a legal process that lets companies restructure debt and stay open while they reorganize). Others may be days away.
Let’s dig in to the 10 restaurant brands in the most serious trouble right now.
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So, what’s behind all these bankruptcies?
In short, the restaurant industry is getting squeezed from every direction… Rent is higher, food costs haven’t dropped like everyone hoped, and wages are up – which is great for workers, but tough on margins.
Add in the fact that a lot of these chains took on major debt during the pandemic just to survive… and now all those bills are coming due.
Meanwhile, more and more customers are skipping sit-down meals entirely – either cooking at home, opting for cheaper takeout, or cutting back altogether. I know I have.
For older mid-tier brands that rely on packed dining rooms? It’s not looking so good.
Here are the seven chains in danger right now:
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This one’s official. Red Lobster filed for Chapter 11 back in May 2024.
After years of money trouble (and that disastrous “Endless Shrimp” deal), the chain is shutting down dozens of locations and trying to sell off what’s left.
Can it be saved? Maybe… but unless someone swoops in to buy it, this seafood story could end with a big “closed for good” sign.
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TGI Fridays filed for bankruptcy late last year and has already shut down 160+ locations after years of declining traffic and high labor costs.
New CEO Ray Blanchette is trying to turn the ship around with a massive menu revamp (85% refreshed) and a more “modernized” vibe to bring in younger diners.
Will it work? Maybe. But Fridays is now a much smaller player fighting for relevance in a very crowded market.
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The once-iconic wings-and-beer hangout filed for Chapter 11 in March 2025.
Over 30 company-owned locations shut their doors right away.
The brand is now banking on franchises to survive. Founders and top franchisees are buying back the best locations to “restore the brand to its roots”.
Still… Does anyone even go to Hooters anymore?
My guess is that Hooters largely runs on a shrinking group of loyal regulars, but younger generations just aren’t showing up.
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Tex-Mex chain On The Border filed for Chapter 11 bankruptcy in March 2025, closing nearly half its restaurants almost overnight.
The company cited the usual culprits: inflation, rising rent, and aggressive fast-casual competition (think Chipotle and Torchy’s) squeezing their margins thin.
They’re now pivoting to a franchise-first model and ramping up takeout – hoping a lighter, leaner setup will help them survive.
But let’s be honest: even die-hard queso fans are questioning whether the brand can bounce back in today’s crowded, cost-conscious food scene.
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It’s déjà vu for Bar Louie. The cocktail-and-burger chain filed Chapter 11 bankruptcy (again) in March 2025.
The company immediately closed 13 more restaurants and revealed it’s carrying $50 to $100 million in liabilities, according to court filings.
So what’s going wrong? High rents, razor-thin margins, and a post-pandemic nightlife slump are hitting hard, especially in expensive urban markets where Bar Louie once thrived.
Even happy hour can’t save a brand when fewer people are going out at all.
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Pinstripes tried to reinvent dining – mixing bowling lanes, bocce courts, and flatbread pizzas into one buzzy night-out experience.
But behind the scenes, trouble was brewing.
The company lost $8 million in 2024 and burned through cash fast. It tried to go public with a SPAC deal (basically a fast-track IPO – a way to join the stock market without the usual process), but investors bailed, and the whole thing collapsed.
Now bankruptcy rumors are swirling.
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Subway corporate isn’t bankrupt… but one of its biggest U.S. franchisees filed for Chapter 11 in June 2025, impacting hundreds of stores across California and Nevada.
Thousands of jobs are now at risk.
It’s a clear warning: franchise models look strong – until a major operator goes under. And when that happens, even giants like Subway can feel the hit.
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So there you have it. Seven big-name chains officially facing bankruptcy.
But they’re not alone… Even major chains like Denny’s, Applebee’s, Jack in the Box, and Ruby Tuesday are shutting down locations coast to coast – not because they’ve filed (yet), but because of shrinking profits, sky-high rents, and fewer customers walking through the door.
So, what do YOU think?
Are you surprised to see any of these restaurants on the list?
Have any shut down near you?
Drop your thoughts in the comments, and tell us which food chain you DON’T want to see disappear next.
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