Five Bankruptcies of Restaurant Chains that Shake the Industry in 2021
The restaurant industry was still plagued by bankruptcies well into 2021. These bankruptcies impacted both full-service and casual restaurants, as well as fast-food chains. Due to COVID-19 restrictions, and declining sales, this was a common problem. Due to increasing debts, many brands had to close their doors due to supply chain problems and changing consumer behavior. They filed for Chapter 11 protection or found an investment firm that would purchase them out of bankruptcy.
While there were not as many bankruptcies in 2020-which affected brands like Chuck E. Cheese, Le Pain Quotidien, and Le Pain Quotidien --2021 saw more restaurant closures than it could handle.
Cici's was purchased by D&G Investors
Cici's Pizza had already begun to show signs of decline before the pandemic. Its total sales dropped by 10% between 2017-2019. Cici's 2020 revenue fell by $100 million, from $4433.3 to $393.9 Million. This resulted in a net loss of $2.7 million.
The Jack in the Box franchise that was the most prominent was disbanded
Jack in the Box might not have fared well during the pandemic. However, the company reported a sales growth of 13.1% in the last year. They applied for Chapter 11 debt protection and declared their liabilities at between $10 million and $50 million.
Golden Corral's second-largest franchisee nosedived
At the time of filing, Golden Corral was hit by the pandemic like other restaurants that serve buffets. Paycheck Protection Program owed $6.7 million in loan repayments.
Casa Bonita went downhill
The pandemic decimated casual dining as well as full-service restaurants. The fan-favorite Casa Bonita also was among the victims. A popular Colorado establishment--offering its patrons a unique combination of casual dining and tropical-themed live entertainment--the restaurant was forced to close at the start of the pandemic. The parent company filed for Chapter 11 protection in April 2021. It filed for bankruptcy in April 2021. It revealed that it had $4.4 million in liabilities and $3.7million in assets. South Park's creators purchased the restaurant.
Creditors had issues with the parent company of meatheads.
Meatheads, a Chicago-based hamburger restaurant chain, had an uneventful 2021. The company's parent Craves Brands filed for Chapter 11 bankruptcy early April. But, one of Crave Brands' principal creditors challenged the filing and claimed that Crave had only filed for protection to "keep under control". Both companies have since reached a settlement. Crave Brands is now insolvent and operating as the Meatheads franchise.
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