Reviving a restaurant chain from the dead is a rare occurrence. Not many examples of successful second chances exist.
A recent example of a restaurant closing down, filing for Chapter 7 liquidation, and then reopening after several months is Foxtrot's cafes and markets in the Chicago area.
🚨Don’t miss this amazing Cyber Week Move! Get 60% off TheStreet Pro. Act now before it’s gone.😲
Foxtrot merged with Dom's Kitchen & Market in late 2023 to form Outfox Hospitality to open combined cafes and convenience stores around the country.
Related: Another popular pizza chain files for Chapter 11 bankruptcy
Cafe and convenience store operator Foxtrot and Dom's Market had 33 locations in Chicago; Washington, D.C.; Dallas; and Austin, Texas; but shut down all locations and filed for Chapter 7 on April 23, 2024, without any notice to employees. Former employees filed a class-action lawsuit against Outfox.
A new entity operated by the founders of Foxtrot wasformed and in September 2024 opened two new Foxtrot locations in Chicago not affiliated with Outfox Hospitality. The company's website says that the chain now has four locations in Chicago.
Restaurants reopen after shutting down
Casual restaurant chain Steak & Ale shut down all its locations and filed for Chapter 7 liquidation in 2008. In July 2024, Dallas-based Legendary Restaurant Brands reopened the defunct chain with its first new location in Burnsville, Minn., according to a company statement.
Defunct restaurant chain Ground Round will rise from the dead in Shrewsbury, Mass., in January 2025 after Joseph Shea and his wife Nachi Shea purchased the intellectual property and rights to the brand to reopen operations, according to Restaurant Business. The chain had shut down all locations over 20 years ago in February 2004.
Image source: Shutterstock
Chi-Chi's reopens after closing 20 years ago
Finally, popular Mexican chain Chi-Chi's, which also closed all of its locations 20 years ago after filing for Chapter 11 bankruptcy and facing a devastating Hepatitis A outbreak, will reopen for business in 2025 after the founder's son reached an agreement with the trademark holder to use the restaurant name.
Related: Popular vodka brand files for Chapter 11 bankruptcy
Michael McDermott, son of Chi-Chi's founder Marno McDermott, signed an agreement with the restaurant's trademark holder Hormel Foods (HRL) to use the restaurant name on locations, which are expected to begin opening in 2025, according to a statement from the new company, Chi-Chi's Restaurants LLC.
More bankruptcy news:
- Struggling gas station chain liquidates in Chapter 7 bankruptcy
- Major healthcare provider files for Chapter 11 bankruptcy
- Distressed oil company files for Chapter 11 bankruptcy
McDermott, whose father founded the Chi-Chi's chain with former Green Bay Packers player Max McGee in 1975 in Minneapolis, built his career in the restaurant business as founder of Kona Grill and Rojo Mexican Grill.
"I still have fond memories of growing up in the Chi-Chi's restaurants that my father built throughout their time, instilling in me the passion and determination to pursue my own career in the restaurant industry," McDermott said.
"We have seen the impact our restaurant has had on individuals and families across the country and believe there is a strong opportunity to bring the brand back in a way that resonates with today's consumer – an updated dining experience with the same great taste and Mexican flavor," he said.
The original Chi-Chi's chain grew to about 200 locations nationwide and was sold several times in the 1980s and 1990s. The company filed for Chapter 11 bankruptcy in October 2003, and later that month, an outbreak of Hepatitis A in a Pittsburgh area Chi-Chi's led to 660 people contracting the disease and four deaths, according to Restaurant Business.
Over 300 people sued Chi-Chi's, which magnified the company's financial distress and led to the chain closing its remaining 65 locations in 2004 and ceasing operations.
Related: Veteran fund manager sees world of pain coming for stocks
