- Restaurant chains were set to suffer major losses since the beginning of the pandemic, and Pizza Hut is the latest chain to announce a wave of permanent closures.
- Even with dining rooms reopening in some parts of the country, it’s still nearly impossible for casual-dining restaurants to generate a profit at reduced dine-in capacity.
- As a result, many chains have permanently closed some stores, and some brands have decided to throw in the towel altogether.
- McDonald’s, Dunkin’, and Starbucks are among the chains that have cumulatively closed over 1500 restaurants for good.
- Visit Business Insider’s homepage for more stories.
As soon as the pandemic hit, restaurant-industry experts knew that many restaurants wouldn’t make it through. On April 1, UBS predicted that one in five restaurants may close as a result of the pandemic.
While independent restaurants have been hit much harder than many chains, chains aren’t immune. Chains often rely on independent owner-operators to run restaurants, and these franchises often don’t have the same robust financial resources of the brands they represent.
Even though much of America has opened up, most locales have implemented social-distancing guidelines that make it impossible for restaurants to generate a profit even if they reopen dining rooms. Reopening isn’t the fiscal cure-all some hoped it would be, and a recent Yelp report found that nearly 16,000 restaurants have already permanently closed since the pandemic began.
Some chains have already filed for bankruptcy protection or closed all restaurants. Others are taking a slower, quieter, or more measured approach to closures. However, this is likely only the beginning of a large wave of closures for casual-dining concepts, which are much less likely to make it through the pandemic unscathed than delivery-oriented restaurants.
Here’s a list of chain-restaurant closures since the pandemic started.
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TGI Fridays: as many as 20% of the chain’s 386 restaurants
On May 26, TGI Fridays CEO Ray Blanchette told Bloomberg that the chain could permanently close up to 20% of its 386 restaurants.
As restaurants reopen with limited dine-in capacity, TGI Fridays is experimenting with outdoor tent seating.
Steak ‘n Shake: 51 restaurants
Steak ‘n Shake has been on the slide for a long time, and numerous attempts to reinvent the brand and recapture customers haven’t quite succeeded. So it was little surprise when the chain’s quarterly report, which came out in early May, revealed that the chain would close 51 more restaurants.
Sweet Tomatoes/Souplantation: all 97 restaurants
The pandemic has been especially bad news for buffet restaurants. Garden Fresh, the parent company of Souplantation and Sweet Tomatoes, filed for bankruptcy in early May. It became the first (and, so far, the only) major buffet chain to announce it would close all restaurants permanently because of the pandemic’s impact on business.
Denny’s: 16 restaurants
On May 22, Denny’s announced it would permanently close 15 locations. The closed locations were operated by one franchisee, Feast American Diners. Denny’s also closed one corporate-owned location in the last quarter.
Brio Italian Mediterranean and Bravo Italian Cucina: 71 restaurants
FoodFirst Global Restaurants, the parent company of Brio and Bravo, filed for bankruptcy in April and announced it would close 71 of its 92 restaurants. FoodFirst told Restaurant Business magazine that it had already been struggling with declining sales and closed 10 locations in January.
Specialty’s Bakery and Cafe: all 33 restaurants
On May 18, the Pacific Northwest chain Specialty’s Bakery and Café suddenly announced it would close all 33 locations for good after May 19. In a statement on its website, the company said that “current market conditions attributed to COVID-19 and shelter-in-place policies have decimated company revenues.”
Ruby Tuesday: 147 restaurants since January 23
Like many of the other brands on this list, Ruby Tuesday had been struggling long before the pandemic. But since January, the casual-dining chain has been quietly closing restaurants and scrubbing them from its website without a trace.
Le Pain Quotidien: up to 63 out of 98 restaurants
The pandemic quickly swept the US arm of the bakery chain Le Pain Quotidien into bankruptcy, forcing it to close all 98 of its stores. Fortunately for croissant fans, the chain negotiated a buyout with Aurify Brands, which has said it plans to reopen at least 35 stores.
IHOP: at least 49 restaurants in Virginia, North Carolina, South Carolina, and Tennessee
CFRA Holdings, an IHOP franchisee that runs 49 restaurants across Virginia, North Carolina, South Carolina, and Tennessee, filed for bankruptcy on May 6. News reports across those states described sudden closures of local IHOP restaurants, though it was unclear whether those restaurants were operated by CFRA Holdings. IHOP declined to confirm or comment on the closures to Business Insider, citing CFRA’s ongoing court proceedings.
Starbucks: up to 400 company-owned restaurants in the US
The coffee chain announced in its June 10 SEC filing that it would close up to 400 company-owned stores in the next 18 months in the US, and up to 200 in Canada. However, the closures will be offset by the development of new stores, bringing the total number of Starbucks stores up by a net 300 locations by the end of the 2020 fiscal year.
Pie Five: 10 out of 53 US locations
Pizza chain Pie Five closed 10 units in the last quarter, Restaurant Business first reported, bringing its total US restaurant count to 43 locations. Although sales took a hit during the pandemic, Pie Five had been closing locations for years amid continually slipping sales numbers.
Dunkin’ will close all 450 stores located in Speedway gas stations after ending its partnership with the gas station chain, Today reported on July 6. The Speedway Dunkin’s are smaller locations with limited menus, and a Dunkin’ representative told Today that the closures would allow the chain to turn its attention to standalone locations. The decision to end the partnership between Dunkin’ and Speedway was made in February, well before the pandemic entered full swing.
McDonald’s: roughly 200 restaurants
On July 28, McDonald’s announced in an earnings call that it planned to close around 200 restaurants by the end of 2020. Around half of those 200 restaurants are located in Walmart stores, and generate a lower sales volume.
Those closures will be offset by openings. The company plans to open 950 new restaurants in 2020, 400 of which will be in China.
On August 17, Pizza Hut’s largest franchisee, NPC International, announced it would close up to 300 Pizza Hut locations and sell the rest all of its Pizza Hut business. NPC International Pizza Hut locations currently make up 20% of all US Pizza Hut restaurants. Most of the locations that are slated for closure are dine-in restaurants.
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