Quick-service coffeehouse chains have struggled to keep locations open over the last five years following the devastating effects of the Covid-19 pandemic.
Once the pandemic subsided, other economic problems impacted the coffee chain sector as rising inflation increased the costs of labor and products, higher interest rates raised the cost of debt, and consumers’ attitudes changed on spending at food and beverage establishments based on uncertainties about the economy.
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Starbucks, which is the second largest U.S. food chain with about 17,000 locations behind Subway’s 20,000, has already closed at least a dozen locations across the nation in 2025 that didn’t make sense to the company, Newsweek reported in January.
Related: Popular breakfast chain franchise files for Chapter 11 bankruptcy
If Starbucks has to close locations, there’s no doubt that its smaller competitors are battling to keep their doors open.
In addition to competing against the sheer number of Starbucks locations across the country, competitors have to contend with the coffee king’s advertising budget. The Seattle-based company in January said it was doubling its marketing spend as a percentage of revenue, MarketingWeek reported.
Coffee chains file for bankruptcy
Corner Bakery Café, which at one time operated 175 locations, filed for Chapter 11 bankruptcy in February 2023 and sold its chain, which had been reduced to 138 units.
The restaurant chain, which specialized in coffee, pastry, breakfast, and sandwiches, has begun a comeback as it recently completed renovations at seven locations, one in Pennsylvania and six in California, reinforcing its commitment to providing guests with a warm and inviting dining experience
Award-winning Colorado Springs, Colo., coffee chain Switchback Coffee Roasters on Aug. 19, 2024, filed for Chapter 11 bankruptcy to reorganize its business. The company did not reveal specific reasons for filing for bankruptcy but indicated in its petition that funds would be available to pay unsecured creditors
The coffee chain, which has won gold, silver, and bronze awards from the Colorado Springs Independent on several occasions since opening in 2010, operates two cafés and a roastery in Colorado Springs, Colo.
Popular coffee chain closes an iconic location.
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Ritual Coffee Roasters closes struggling location
Finally, popular San Francisco-based boutique coffee chain Ritual Coffee Roasters revealed in a letter on its website that it will close its Haight-Ashbury District location on April 11, as it “had a hard time balancing having enough business with maintaining a fully operational cafĂ©.”
Related: Another struggling trucking company files Chapter 11 bankruptcy
The 20-year-old coffee chain opened the Haight Street location nine years ago and operates four other cafĂ©s in San Francisco’s Mission District, Hayes Valley, San Francisco International Airport’s Harvey Milk Terminal, and one in Napa, Calif.
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The company also has a separate headquarters and roastery in San Francisco that is closed to the public.
“Itâs not because of you, our amazing customers, the surrounding community, or the incredibly creative, organized and dedicated merchant community,” the coffee chain’s owner Eileen Rinaldi said in a letter about the closing. “Itâs just the normal confluence of the many factors of running a small business in a modern city.”
The Haight Street location faced both financial problems and fallout from a shooting in 2021 that resulted in the café being sprayed with gunfire, the San Francisco Chronicle reported.
Related: Another popular whiskey brand files for Chapter 11 bankruptcy
