The U.S. restaurant industry has faced intense pressure over the past two years, with inflation, rising labor costs, high debt loads, and shifting consumer habits pushing several well-known chains into bankruptcy within the past two years. From casual dining staples to regional favorites, these filings signal a major reset for the sector.
Red Lobster
Red Lobster filed for Chapter 11 bankruptcy in 2024 after years of declining traffic, rising seafood costs, and heavy lease obligations. The chain abruptly closed more than 100 underperforming locations nationwide, surprising customers and employees alike.
While the brand continues operating hundreds of restaurants, the bankruptcy marked one of the most visible casual-dining collapses in recent years. Red Lobster has since worked to streamline operations and renegotiate leases as part of its restructuring.
TGI Fridays
TGI Fridays, a longtime symbol of American casual dining, entered bankruptcy in 2024 as it struggled with shrinking foot traffic and mounting debt. The chain closed dozens of locations across the U.S., continuing a long period of contraction that began before the pandemic. Once known for lively bars and large menus, Fridays has been attempting to reposition itself with fewer restaurants and a leaner footprint.
Buca di Beppo
Family-style Italian chain Buca di Beppo filed for Chapter 11 bankruptcy in 2024 after being weighed down by debt and declining dine-in demand. Known for oversized portions and large dining rooms, the concept struggled to adapt to post-pandemic dining habits. The bankruptcy allowed Buca to close weaker locations while continuing to operate many restaurants during restructuring.
On The Border Mexican Grill & Cantina
On The Border also filed for bankruptcy in 2024, citing inflation, higher wages, and reduced customer traffic. The Tex-Mex chain shuttered dozens of locations nationwide as part of its restructuring. Like many casual dining brands, On The Border has faced stiff competition from fast-casual restaurants that offer lower prices and quicker service.
Rubio’s Coastal Grill
Rubio’s Coastal Grill filed for bankruptcy in 2024 (the second time in four years), marking another major setback for a once-popular fast-casual brand. Best known for helping popularize fish tacos in the U.S., Rubio’s closed a significant number of locations, particularly in California.
Rising operating costs and softer demand in key markets contributed to the filing. (Pandemic struggles led to the first bankruptcy filing in 2020.)
A changing restaurant landscape
These bankruptcies highlight a broader shift in the restaurant industry. Large dining rooms, extensive menus, and high overhead are proving difficult to sustain as consumers prioritize convenience, value, and takeout. While many of these brands continue operating in reduced form, the past two years underscore how dramatically the U.S. dining landscape is changing.
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