The casual restaurant sector has faced economic hardship for the last five years since the Covid-19 pandemic devastated the industry.
As the pandemic faded away, other problems hampered the industry, such as rising costs of labor, food, and supplies from inflation, increased interest rates on debt, and changing attitudes of consumers on dining out.
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Restaurant chains have closed hundreds of locations in restructurings in just the last year with plans to close many more this year. Several dining chains have filed for bankruptcy protection and, in some of those cases, also closed restaurants.
Related: Popular pizza chain franchisee files for Chapter 11 bankruptcy
Among the most prominent restaurant chains to file for bankruptcy was Red Lobster, which filed for Chapter 11 on May 19, 2024, and closed 120 restaurants but still operates about 545 locations.
TGI Friday’s was another iconic restaurant chain that filed for Chapter 11 bankruptcy protection on Nov. 2, 2024, to sell company assets, reduce its restaurant footprint, and reject unfavorable leases and contracts. The company had about 600 franchises worldwide, including 213 U.S. locations, before it filed for bankruptcy.
Restaurant and bar chains declare bankruptcy
The first half of 2025 has begun with a couple of popular restaurant and bar chain bankruptcies, as Addison, Texas-based “gastrobar” chain Bar Louie’s parent BLH TopCo LLC filed for Chapter 11 on March 26 to reorganize and close locations.
Bar Louie, which had as many as 130 locations in 2020, currently has 48 locations.
And popular casual dining chain Hooters of America, which features scantily clad servers, filed for Chapter 11 bankruptcy protection on March 31 to reorganize its business after struggling financially over the last year. The dining chain planned to sell over 100 of its locations to a franchisee-led buyer group.
Popular breakfast chain Denny’s Corp. in February revealed plans to close several of its restaurant locations through the end of 2025.
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Denny’s said during its fourth quarter 2024 earnings call that it planned to close 70 to 90 lower-volume restaurant locations in 2025, after shuttering 88 locations in 2024.
Over a year ago, Denny’s franchisee Denn-Ohio, which operated 10 locations in Michigan, Ohio, and Kentucky, filed for bankruptcy protection on Oct. 31, 2023, suffering the effects of the Covid-19 pandemic and other economic issues.
International House of Pancakes, which has 1,698 locations in the U.S. according to ScrapeHero, has closed about 92 locations since June 30, 2023. IHOP’s Frequently Asked Questions page on its website claimed the chain had 1,790 locations mid-year in 2023.
IHOP franchisee files for bankruptcy.
Dine Brands
IHOP franchisee files for Chapter 11 bankruptcy
Finally, Exton Operating Group Inc., which operates an International House of Pancakes franchise in Exton, Pa., filed for Chapter 11 bankruptcy on March 24, 2025, to reorganize its business
Related: Another popular whiskey brand files for Chapter 11 bankruptcy
The Burlington, N.J.-based debtor, which operates as TA IHOP, listed $100,000 to $500,000 in assets and liabilities in its petition filed in the U.S. Bankruptcy Court for the Eastern District of Pennsylvania in Philadelphia.
Dine Brands Global IHOP restaurant chain franchisee indicated funds will be available to pay unsecured creditors.
The franchise restaurant, located in the Festival at Exton shopping center, offers classic IHOP breakfast items, such as pancakes and waffles, as well as other American diner fare.
Related: Troubled trucking companies file for Chapter 11 bankruptcy
