Craft beer restaurant chains have struggled since the Covid-19 pandemic, suffering from rising interest rates and increased costs of goods and labor, as well as a reduction of customers who have been battling economic challenges.
Several of these establishments sought relief by filing for Chapter 11 bankruptcy protection to reorganize their businesses and restructure their debt to continue operating as going concerns, but sometimes they had to shut down operations.
Small regional restaurant and craft beer bar Melt Bar & Grilled, which operated 14 locations by 2017, permanently closed its last remaining location in Lakewood, Ohio, on Jan. 1, blaming the long-term effects of the Covid-19 pandemic for its financial distress.
Related: Popular beverage chain files for Chapter 11 bankruptcy
The craft beer restaurant chain on June 14 filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Northern District of Ohio suffering financial difficulties from increased food and labor costs caused by inflation and facing lawsuits filed by landlords.
The Lakewood, Ohio, restaurant chain specialized in gourmet grilled cheese sandwiches, craft beers, and signature drinks. The restaurant also featured a vegan menu with vegan grilled cheese, vegan mac and cheese, tofu wings, and other items.
The establishment grew to 14 locations by 2017, but faced financial difficulties following the Covid-19 pandemic in 2020, leading to its demise.
Another craft beer restaurant that filed for bankruptcy and shut down in 2024 was Zydeco Brew Werks in Ybor City, Fla., which in January 2024 filed Chapter 11 in the U.S. Bankruptcy Court for the Middle District of Florida and closed its main brewery and restaurant location on 7th Avenue in Tampa, Fla.
The craft brewery still operates Zydeco Brew Werks at the Museum of Science & Industry in Tampa.
World of Beer emerged from bankruptcy with expansion plans over the next five years.
World of Beer emerges from Chapter 11 bankruptcy
Finally, some good news in the craft brewery industry came late last year as popular craft beer restaurant chain World of Beer Bar & Kitchen emerged from bankruptcy on Dec. 23 with plans to open four to five franchise locations annually over the next five years, Restaurant Dive reported.
Related: Another troubled retail chain files for Chapter 11 bankruptcy
World of Beer had already started its expansion before exiting bankruptcy as it opened a new location in Fort Worth on Dec. 21 and said its next new location will open in Annapolis, Md., in early 2025.
World of Beer currently has 31 locations in 10 states, according to its website.
The craft brewery restaurant’s bankruptcy exit came just days before its franchisee in Viera, Fla., shut down operations on Dec. 31 after 15 years in business, Florida Today reported.
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World of Beer franchise owners close location
The Viera franchise owners decided to retire from the restaurant business after struggling with daily management commitments and financial issues, including a shortage of potential employees and unrealistic salary expectations.
The franchise had been a beer-only establishment and attempted to add a small kitchen to offer light fare, but the rate of pay for the output did not make financial sense, the franchise owners said.
The Tampa, Fla.-based craft beer restaurant chain launched in 2007 and grew to 75 locations by 2015 with plans to expand to 100 units, but the company reversed course and had only 42 locations open at the end of 2023, according to Nation’s Restaurant News
World of Beer’s parent WOB Holdings and 11 affiliates on Aug. 2, 2024, filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Middle District of Florida to reorganize, cancel leases, and extinguish debt.
The company blamed the negative impact of rising interest rates and lease obligations on cash flows along with inflation, increased operating costs, and a slow return to pre-pandemic dining habits.
The debtor listed $10 million to $50 million in assets and liabilities, including claims of more than $25.6 million owed to Synovus Bank.
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