Over the past few years, restaurants in the United States have faced unprecedented challenges, with thousands of well-established chains closing their doors for good. The pandemic accelerated the descent of the U.S. economy, and the restaurant sector, in particular, has been hit hard. Despite being popular among consumers, many restaurant chains struggle to stay afloat due to various factors, including inflation, declining foot traffic, and increased competition.

Vulnerabilities of the Major Restaurant Chains

Vulnerabilities of Major Restaurant Chains
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Contrary to popular belief, some of the largest restaurant chains in America are more exposed to financial problems due to their significant expenses and extensive physical presence. Both inflation and deflation can dramatically impact consumer behavior, resulting in lost sales and rendering some locations unprofitable. Despite being backed by corporate giants, many restaurants have been teetering on the edge for some time, and recent developments have pushed them over the edge.

Mass Closings and Bankruptcies Are Happening

Mass Closings and Bankruptcies
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A considerable number of restaurant chains are currently closing multiple locations. While some closures are inevitable due to underperformance and declining foot traffic, others are part of broader efforts to streamline operations and restore financial health. However, abrupt closures without warning leave customers and employees wondering about the reasons behind the shutdowns. Let’s look at 15 restaurant chains closing multiple stores in 2024.

Cracker Barrel

Cracker Barrel
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Cracker Barrel, known for its Old Country Store-style restaurants, has announced more closures, continuing a trend that began in November 2023. California, Oregon, and South Carolina locations are among those on the chopping block. Despite efforts to evaluate store performance and meet customer needs, declining revenue and foot traffic have forced closures nationwide.

Applebee’s

Applebees
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Applebee’s, a staple in the American dining scene, has faced challenges in recent years, resulting in the closure of over 300 locations. Executives anticipate further shutdowns in 2024 as the company aims to focus on more profitable initiatives. Dine Brands Global, the parent company, is looking to implement changes to improve performance and drive future growth.

TGI Friday’s

TGI Fridays
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TGI Friday’s has announced the permanent closure of nearly 40 restaurants across the US due to financial challenges. The company also sells corporate-owned locations as part of its restructuring plan to cut expenses and reinvest in expansion. By focusing on a franchise model and closing underperforming stores, TGI Fridays aims to improve its long-term performance.

Denny’s

Dennys
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Denny’s has seen almost 60 closures in late 2023, signaling challenges amid declining sales and high costs. Financial troubles, including unpaid bills and legal issues, have contributed to the closures, highlighting the struggles facing the iconic diner chain.

Boston Market

Boston Market
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Boston Market has experienced a rapid decline, with the number of locations shrinking from 300 to just 27 in the past year. Legal issues related to unpaid bills and evictions have driven closures, putting the future of the fast-casual restaurant chain in jeopardy.

MOD Pizza

MOD Pizza
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MOD Pizza is among the fast-casual chains trimming their brick-and-mortar footprint. MOD Pizza announced 27 closures across multiple states. The chain is seeking to address declining foot traffic and sales through strategic closures and menu updates.

Hooters

Hooters
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Hooters has reported more restaurant closings across the US in 2024, affecting locations in West Virginia, Michigan, and Florida. While the brand did not provide specific details on the reasons for these closures, market conditions and financial challenges may be contributing factors. The closures come after a series of shutdowns in Louisiana.

Carrabba’s Italian Grill

Carrabbas Italian Grill
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Carrabba’s Italian Grill, an Outback Steakhouse sister chain, is streamlining its operations by eliminating struggling locations. While the full extent of closures is not yet known, the company has already shuttered three locations in New York. These closures are part of a broader financial reorganization plan aimed at focusing on more promising investments.

Hardee’s

Hardees
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Hardee’s, after losing almost 100 stores in 2023, is shuttering dozens more locations this spring. The closures, primarily in Central and Southern Illinois, are indicative of ongoing financial challenges facing the chain. While specific reasons for the closures have not been disclosed, declining revenue and economic pressures may be contributing factors.

Tijuana Flats

Tijuana Flats
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Tijuana Flats, a chain of Tex-Mex restaurants, has filed for Chapter 11 bankruptcy, resulting in the closure of 11 restaurants. The decision was made after a thorough analysis of financial performance and market conditions. While these closures coincide with the bankruptcy announcement, they are part of broader efforts to ensure the company’s financial stability.

Noodles & Co.

Noodles Co
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Noodles & Co., known for its unique noodle dishes, is facing financial trouble and has been for some time. The company plans to address declining foot traffic and sales by focusing on menu updates and other areas of its business. However, with several closures already confirmed and more on the horizon, the chain’s future remains uncertain.

Krystal

Krystal
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Krystal is facing financial pressures, with closures and legal challenges threatening its future. The company’s parent company is closing corporate-owned stores, while some locations are expected to be sold to franchise operators. However, if interested buyers do not come forward, these stores will be shut down by the end of the year.

White Castle

White Castle
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White Castle is currently facing a multi-billion dollar lawsuit that’s not only causing multiple store closures but putting the entire chain at risk of going out of business. The company was sued for biometric Privacy Law violations, and failure to pay the settlement could spell the end of the iconic restaurant chain in 2024.

Bagger Dave’s

Bagger Daves
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Bagger Dave’s Burger Tavern has been closing dozens of locations every year since 2015. Although once popular in Michigan, Indiana, and Ohio, the chain’s presence has dwindled. With six more closures announced and plans to shift existing restaurants into new concepts, the future of Bagger Dave’s is uncertain.

Chili’s

Chilis
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Chili’s Grill and Bar is closing a dozen restaurants this spring, with additional closures in various states. While executives have not revealed specific reasons behind these decisions, economic challenges and declining consumer spending are likely factors. The closures reflect the broader struggles facing the restaurant industry.

The Broader Economic Impact on the Restaurant Industry

The Broader Economic Impact on the Restaurant Industry
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The closures of these restaurant chains reflect broader economic challenges facing consumers and businesses alike. High inflation, stagnant wages, and rising costs for everyday expenses have reduced consumers’ buying power, leading to declining foot traffic and sales across industries. As the effects of deflation trickle down the economy, more businesses may face closures in the months ahead.

Source: Epic Economist

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