For decades, national chains were considered some of the safest bets in business. Familiar menus, strong brand recognition, and thousands of locations helped them dominate suburbs, malls, and highway exits. A growing number of once-powerful brands have closed stores, filed for bankruptcy, or warned investors that further cuts are forthcoming.
Carl’s Jr franchisee puts dozens of restaurants at risk
In March 2026, one of the largest California franchisees of Carl’s Jr. filed for Chapter 11 bankruptcy, putting 65 locations at risk. While the parent company said the broader brand remained stable, the filing highlighted how franchise operators were being squeezed by higher labor, food, and rent costs.
Wendy’s planning hundreds of closures
In late 2025, Wendy’s announced plans to close roughly 300 to 350 underperforming restaurants while opening new locations elsewhere. The company said the move was designed to improve long-term profitability, but it also showed how even major burger chains are reevaluating their footprints.
Pizza Hut and Papa Johns trimming locations
Pizza chains have also been under pressure. Pizza Hut is preparing to close around 250 U.S. restaurants in 2026, while Papa Johns will close around 300 restaurants between 2026 and 2027. Delivery competition, labor costs, and changing consumer preferences continue to challenge the category.
Red Lobster still battling after bankruptcy
After filing for bankruptcy in May 2024, Red Lobster has continued restructuring into 2026. Analysts say aggressive discounting may boost traffic temporarily, but deeper issues like lease costs, menu pricing, and profitability remain unresolved.
Why chains are suddenly vulnerable
Restaurant operators are dealing with a difficult mix of rising wages, expensive ingredients, higher insurance costs, and consumers cutting back on dining out. Fast-casual brands, delivery apps, and local independents have also intensified competition.
What comes next
Not every troubled chain will disappear. Many are closing weaker stores while investing in remodels, technology, and smaller formats. But for customers, the trend is clear: restaurants that once seemed untouchable are no longer guaranteed to survive in today’s market.
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