Financial difficulties in the restaurant sector continue in 2024 as more dining chains close underperforming locations and, in some cases, file for bankruptcy.
The most significant restaurant bankruptcy this year was Red Lobster, which filed for Chapter 11 on May 19 and closed over 120 locations. The chain, which now operates 545 restaurants, exited bankruptcy on Sept. 16.
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TGI Fridays is expected to be the next notable restaurant chain to file for Chapter 11 bankruptcy this year, as the chain is lining up debtor-in-possession financing with its lenders ahead of a Chapter 11 bankruptcy filing that could happen in the next several days, people with knowledge of the situation told Bloomberg.
Related: Iconic restaurant chain ready to file Chapter 11 bankruptcy
The Dallas-based franchisor plans to use the DIP loan to fund its operations while it proceeds through bankruptcy and emerges as a going concern. The company has about 600 franchises in 55 countries, including 213 U.S. locations in 29 states, according to its website.
TGI Fridays could also negotiate an asset purchase agreement in bankruptcy since it had been seeking a sale of its company-owned units until a sale to U.K. franchisee Hostmore fell through in September. The company has not indicated whether it would consider selling its assets in bankruptcy.
Popular restaurant chain, BurgerFi International, owner and franchisor of 144 burger and pizza restaurants nationwide, on Sept. 11 filed for Chapter 11 bankruptcy protection to reorganize after a turnaround plan that it implemented less than a year ago failed to produce the necessary results to prevent the filing.
Image source: Shutterstock
Shari's Restaurant closes all Oregon restaurants
Finally, iconic casual dining chain Shari's Restaurant, which has faced financial difficulties since the Covid-19 pandemic, on Oct. 20 closed all of its remaining Oregon stores, which amounted to 42 locations at the beginning of 2024.
Shari's closed all of its Oregon units, as it faced mounting financial issues, such as eviction notices, unpaid bills, and back taxes. Sam Borgese, CEO of Gather Holdings, the parent of Shari's Management Corp., confirmed the closings in an email to the Oregon Lottery, KGW 8-TV reported.
Related: Another popular Asian dining chain files Chapter 11 bankruptcy
“I can confirm that at this time that all Oregon Shari's restaurants are closed,” Borgese said.
Shari's has not indicated whether it is planning a bankruptcy filing. The company's website was not activated on Oct. 22.
More bankruptcy stories:
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- Bankruptcy filing can’t rescue popular retail food brand
Shari's generated $34.7 million in state video lottery sales in 2023, KGW reported. The restaurant failed to pay the Oregon Lottery in May, resulting in the state agency shutting down some of Shari's lottery machines, according to an Oregon Lottery spokesperson, Oregon Public Broadcasting reported.
Video Lottery retailers are required to pay the state agency game revenue weekly. Shari's has fallen behind on payments and owes the state $900,000, according to the spokesperson.
The spokesperson said lottery officials were aware of Shari's financial issues but unaware of the full extent.
About a dozen Shari's restaurants in Oregon, Idaho, and Washington have quietly closed over the past six months.
Shari's Restaurant chain, based in Beaverton, Ore., was established in Hermiston, Ore., in 1978, and at one time, had 95 locations in six states, including California, Idaho, Nebraska, Oregon, Washington, and Wyoming.
The restaurant chain currently operates 17 locations that are open in California, Idaho, and Washington, according to OregonLive. The restaurants, which compete against Denny's, are open 24 hours a day, 365 days a year, and specialize in various pies.
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