Rising food costs, inflation, debt, and shifting consumer habits have pushed several major fast food and restaurant chains into bankruptcy in recent years. While some brands are attempting comebacks, others have permanently shuttered locations across the United States.
Red Lobster files for Chapter 11
One of the biggest restaurant bankruptcy stories came on May 19, 2024, when Red Lobster filed for Chapter 11 bankruptcy protection. The seafood chain blamed mounting debt, inflation, and operational losses after closing dozens of underperforming restaurants nationwide.
Following the filing, the company auctioned assets and restructured operations while continuing to operate many remaining locations. However, closures continued into 2025 and 2026 as the chain downsized its footprint.
TGI Fridays restructures after closures
TGI Fridays filed for Chapter 11 bankruptcy protection on Nov. 2, 2024, after years of declining sales and restaurant closures. The casual dining chain had already shut down more than 100 locations before the filing, and was down to 79 locations at the end of 2025.
Executives cited post-pandemic challenges, changing dining trends, and financial strain as major reasons for the restructuring. The company has continued operating select franchise locations while reorganizing its business model.
Hooters begins turnaround effort
Hooters of America filed for Chapter 11 bankruptcy on March 31, 2025, as the chain worked to restructure hundreds of millions of dollars in debt. The filing followed multiple restaurant closures across several states.
Since emerging from bankruptcy proceedings, the Florida-based chain has focused on a “family-friendly” rebrand while trimming weaker locations and shifting toward franchise ownership.
Smokey Bones disappears after FAT Brands turmoil
Smokey Bones effectively disappeared from the national restaurant landscape following financial struggles tied to parent company FAT Brands. In April 2026, all remaining Smokey Bones locations were either closed, converted, or sold off as FAT Brands faced mounting debt pressure and ongoing legal and financial scrutiny.
The barbecue chain, once operating dozens of restaurants across the U.S., had struggled for years with declining traffic and increased competition in the casual dining sector. Its collapse became one of the most visible examples of how heavily leveraged restaurant operators have struggled in the post-pandemic economy.
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