Popular restaurant chain files bankruptcy, closes locations

The chain of restaurants has closed half of its locations.

Jun 6, 2025 - 17:46

Popular restaurant chain files bankruptcy, closes locations

The casual dining sector has faced a number of economic issues over the last two years that have led to several restaurant chains closing hundreds of locations, and in some cases, filing for bankruptcy.

The major challenges include huge debt obligations that have become unmanageable, as interest rates increased after the Covid pandemic.

Also, rising inflation over the last three years has resulted in higher costs of labor and food products, which in turn forced restaurants to raise their prices, to the dismay of consumers.

As prices have risen, changing attitudes of customers toward spending on restaurant meals have also taken a toll on the restaurant industry.

The most significant distressed restaurant chain to close locations was seafood chain Red Lobster, which filed for bankruptcy in May 2024, closing about 187 restaurants. The dining chain emerged from Chapter 11 in September 2024 and now operates about 478 locations in 44 states.

Italian restaurant chain Buca di Beppo closed 18 locations last year before it filed for Chapter 11 bankruptcy protection on Aug. 4, 2025, to reorganize its business with the support of its lenders.

The restaurant chain on Nov. 4 won approval to sell its 44 remaining corporate-owned restaurants to its lender Main Street Capital Corp., with a credit bid of $27 million.

Bar and grill chain TGI Fridays had 161 U.S. locations when it filed for Chapter 11 bankruptcy on Nov. 2, 2024, to reorganize and closed 76 locations. The restaurant chain listed 85 U.S. locations on its website in April.

Restaurants close locations in bankruptcy

Mexican restaurant chain On The Border Mexican Grill & Cantina had about 120 locations at the beginning of this year and closed or vacated 40 non-performing stores on Feb. 24 because of problems with rent and/or financial performance.

On The Border filed for Chapter 11 bankruptcy on March 4, 2025, with plans to sell its assets to its prepetition bridge loan lender.

Miami Beach-based CHG US Holdings, which operates 18 Planta restaurant locations across the country in cities such as New York, Chicago, and the Los Angeles area, filed its petition on May 12 in the U.S. Bankruptcy Court for the District of Delaware.

The debtor has closed restaurants in West Palm Beach, Fla.; South Beach, Fla.; and Brooklyn, N.Y., since filing for bankruptcy.

Tu Casa Restaurant offers Peruvian rotisserie chicken on its menu.
Image source: Tu Casa

Tu Casa restaurant files for bankruptcy

Finally, popular New York-based Peruvian restaurant chain Tu Casa has filed for Chapter 11 bankruptcy and closed half of its locations.

The restaurant chain's affiliate, Don Kew Inc., filed for Chapter 11 bankruptcy protection on April 4 for a restaurant, Hangar Bar & Grill, in Kew Gardens, Queens.

More bankruptcy:

The debtor listed up to $50,000 in assets and $100,000 to $500,000 in liabilities, which include tax obligations owed to the New York State Department of Taxation that prompted the bankruptcy filing.

Tu Casa Restaurant Corp. and two affiliates, Tu Casa #3 Restaurant Corp. and Tu Casa #4 Restaurant Corp., filed for Chapter 11 protection on May 30 in the U.S. Bankruptcy Court for the Eastern District of New York, seeking to reorganize.

Tu Casa, which was established in 2004, expanded its chain to four restaurants in the Queens, N.Y., communities of Kew Gardens, Forest Hills, Richmond Hill, and Astoria, before closing the Richmond Hill and Astoria locations.

The restaurant specializes in Peruvian rotisserie chicken, fried rice, linguini, and various seafood dishes featuring salmon, sea trout, red snapper, and shrimp.