Six U.S. Restaurant Chains Shrink or Restructure as Costs Rise and Diners Pull Back
Updated
Updated · FinanceBuzz · Aug 3
Six U.S. Restaurant Chains Shrink or Restructure as Costs Rise and Diners Pull Back
3 articles · Updated · FinanceBuzz · Aug 3
Summary
TGI Fridays, Red Lobster, Denny’s, Hooters, Ruby Tuesday and Applebee’s are among legacy chains losing ground as higher costs and weaker discretionary spending squeeze casual dining.
Rising food and labor bills are colliding with changed post-pandemic habits, leaving nostalgia-driven brands struggling to attract budget-conscious consumers who now eat out less often.
Recent damage has been severe: TGI Fridays closed about 50 stores before Chapter 11, Red Lobster shut roughly 130 in bankruptcy, Denny’s closed more than 150 by end-2025, and Ruby Tuesday had earlier closed 185.
Some chains are trying restructurings instead of retreat alone—Hooters’ founders bought 111 locations out of bankruptcy, while Applebee’s parent says dual-branded Applebee’s-IHOP sites generate about twice the revenue of comparable standalone stores.
The broader shift is that eating out has become more of an occasional treat, pushing chains to prove they offer both affordability and food worth choosing over meals at home.