Our favorite restaurants are vanishing from sight as worsening economic conditions continue to squeeze U.S. businesses. With shoppers eating out less and tightening their budgets, even big names in the industry are seeing their operations rot from within. Over the past three years, over 160,000 restaurants have been permanently closed around the country, and unfortunately, that trend is still picking up force in 2023.
It’s hard to believe but even the biggest and most successful fast food chains in the world aren’t immune to bankruptcies among franchisees. Just a couple of months ago, Rice Enterprices LLC declared bankruptcy and shuttered all of the McDonald’s restaurants it operated. Serious labor issues involving minors led the franchisee to face a millionaire lawsuit that affected the brand as a whole. Last month, the company announced hundreds of store closings, not only in America, but all across the globe. Some of its formats have become outdated, executives say. The decision was made after a team of board members discussed the growth potential of certain locations and decided to focus on the ones with higher financial returns, excluding struggling stores from its portfolio.
Owned by the same parent company as Burger King, the popular chicken chain Popeyes also dealt with the bankruptcy of one of its biggest franchisees this year. Premier Cajun Kings was founded by Manraj "Patrick" Sidhu in 2018, and by the next year, he had tripled the number of stores he operated, and they generated over $30 million in annual sales. Tragically, Mr. Sidhu passed away in May 2022, and his business was never able to fully recover from the loss of its sole manager. Declining sales, soaring costs, and operating losses forced the franchisee to close a large number of restaurants in Alabama and Tennessee. Some stores were evicted by a landlord, leaving the company with only half of its locations. In March 2023, PCK finally filed for bankruptcy. "This tragic loss, coupled with various macroeconomic factors, has caused tremendous uncertainty and disruption within the business," court documents from the bankruptcy filing read.
Similarly, Chuck E. Cheese has marked generations and gained huge popularity over the decades. Founded in San Jose, California, the pizza chain is a hit amongst kids, but that doesn’t mean things have always been easy for the company. The chain isn’t new in bankruptcy court, with its first filing recorded in 1984 when it was carrying a debt of $50 million in defaulted bonds. Its parent company, Pizza Time Theater decided to seek court protection to avoid corporate destitution. Even though that helped the chain to stay in business, it didn't ensure the chain's long-term survival, especially in the middle of a once-in-a-lifetime global pandemic. Only this time around, the company held a $705 million debt. Up until this day, the future of Chuck E. Cheese remains uncertain. But given the size of its debt load, only a miracle can save the chain from filing for bankruptcy again in the near future. When a company files for bankruptcy, it doesn't immediately free itself of all prior financial obligations. A series of financial arrangements need to be agreed upon, and, as a result, a Chapter 11 bankruptcy generally takes between six months and two years to resolve. This means many of these businesses are now sitting in limbo, waiting to be rescued or about to die out. With a recession at our door, it is difficult to see which ones will be the survivors.
That's why today, we decided to list some of Americans' beloved food joints that are reducing operations or going out of business this year.
16 июл 2024
