14 Popular Restaurants That Suffered Major Financial Struggles

Disclosure: Every piece of content is reviewed, fact-checked, and edited by these editors to confirm that all quality standards are met. Read Our Editorial Guidelines Policy.

The restaurant industry is a dynamic landscape, with trends constantly evolving and customer preferences shifting. While some establishments manage to adapt and thrive, others, even beloved ones, fall victim to changing times. Here are popular restaurants that faced major financial struggles.

1. Bennigan’s

Fine table setting in bennigan's restaurant — Photo Credit: Depositphotos.

This Irish pub-themed chain, known for its “Legendary Monte Cristo” sandwich and lively atmosphere, filed for bankruptcy in 2008 after years of declining sales. Factors like competition from casual dining chains, rising food costs, and economic recession were cited as contributors.

2. Borders Burger

A California-based chain famous for its gourmet burgers and relaxed atmosphere, Borders Burger succumbed to financial struggles in 2011. The company attempted to expand too quickly, leading to debt and operational challenges.

3. Fazoli’s

This Italian fast-casual chain, once boasting over 200 locations, filed for bankruptcy in 2006. Changing consumer preferences towards healthier options and competition from fast-food giants like Pizza Hut contributed to their downfall.

4. Horn and Hardart

A New York City institution known for its Automat restaurants featuring self-service food dispensers, Horn & Hardart struggled to compete with modern fast-food chains and rising labor costs. They ultimately closed their last location in 1991.

5. Lum’s

This iconic hot dog chain, established in 1956, operated primarily in drive-thru format. Bellevue, Nebraska, was the last known site of Lum’s in the United States before it closed on May 28, 2017.

6. Mrs. Fields Cookies

This popular cookie chain, founded in 1977, saw its popularity wane in the face of changing consumer tastes and competition from grocery store bakeries. They filed for bankruptcy in 2008 and emerged leaner, focusing on franchised locations.

7. Orange Julius

In the face of changing consumer preferences toward healthier options, this iconic beverage chain struggled to keep up. They filed for bankruptcy in 2009 and were later acquired by another company, focusing primarily on franchised locations.

8. Poquito

This Tex-Mex fast-food chain, founded in 1995, aimed to offer healthier alternatives to traditional fast food. However, competition and difficulty securing funding led to their closure in 2005.

9. Rainforest Cafe

Its unique ambiance and animatronic animals made it a popular themed restaurant chain. However, high operational costs and declining customer interest led to their bankruptcy filing in 2020.

10. Real Mex Restaurants

This fast-casual Mexican chain, founded in 1997, struggled to differentiate itself from competitors like Chipotle and Moe’s Southwest Grill. The parent business of El Torito, Chevys, and Acapulco restaurants, Real Mex Restaurants, filed for bankruptcy in 2018 due to financial issues.

11. Jamie Oliver’s Restaurant Empire

Jamie Oliver’s once-booming restaurant empire crumbled in 2019, with 26 locations, even in bustling London, shutting their doors. Financial strains, exacerbated by ambitious expansion and a shift in consumer preferences towards more casual and affordable dining, proved too much for the celebrity chef’s vision to sustain.

12. Souplantation

This buffet chain known for its extensive salad bar and soup selection, filed for bankruptcy in 2020. The COVID-19 pandemic significantly impacted their buffet-style service, further accelerating their decline.

13. Steak and Ale

Steak & Ale — Photo Credit: Depositphotos.

This casual dining chain, specializing in steaks and seafood, operated for over 50 years before shutting its doors in 2008. Changing consumer preferences and competition from other casual dining chains were cited as contributing factors.

14. Wetzel’s Pretzels

This popular pretzel chain, founded in 1994, saw its growth stall in the face of competition and economic challenges. They did experience financial difficulties, and in 2022 MTY Food Group paid $207 million to acquire them. The chain did not, however, declare bankruptcy.