It’s not just you… Restaurants have been filing for bankruptcy left and right this year…
But what exactly is pushing these chains to closure?
The answer is actually more complicated than it may seem at first…
What’s Driving Restaurant Bankruptcy?
Many chains that have become staples for nights out have joined this year’s wave of rampant restaurant bankruptcy.
Some giant restaurant chains that filed for bankruptcy protection include Red Lobster and TGI Fridays. Even brands that have not filed for bankruptcy are struggling…
McDonald’s revenue has been slipping this year and, more recently, Denny’s announced the closure of hundreds of locations.
IN FACT, RESTAURANT CHAINS ARE CURRENTLY EXPERIENCING THE MOST BANKRUPTCY IN DECADES (OUTSIDE OF 2020, OF COURSE)
Many experts are calling this phenomenon a “covid-hangover.” Thanks to high interest rates and hesitant consumers, restaurants on the verge of bankruptcy are bleeding money.
Chains with less than 50 locations are especially at risk of failure.
Due to the current difficulty of the sector, private equity companies are less likely to take a risk on saving eateries. However, private equity companies that have already obtained failing chains, as in the case of Red Lobster…
They believe that through cost-cutting and closing locations they can create a massive comeback.
The Future Of The Industry
Industry experts don’t know how long this wave of restaurant bankruptcy will last… With many more potentially coming next year…
It seems like this issue is just one that the hospitality sector will have to ride out…
Be Great,
GCTV Staff
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