It’s a common misconception that massive restaurant chains, backed by corporate power, are immune to economic shifts. Yet history shows that even the largest are vulnerable. Shifting consumer tastes, rising costs, and intense competition form a tide that can unsettle any industry giant, proving no player is too big to be disrupted.
In 2025, a perfect storm of factors – from cost-conscious customers tightening their belts to escalating labor costs and an unending battle for market share – has left many chains facing incredibly tough decisions. They’re constantly trying to innovate with menus and offer enticing deals, often slashing profit margins in the process, which only puts them in a more precarious financial spot. It’s a high-stakes game, and some truly surprising names are finding themselves on the ropes.
Get ready to dive into the stories of some of the restaurant chains that have really felt the pinch this year. We’re talking about places that once seemed unstoppable, but are now grappling with lower sales, poor stock performances, and closures that are leaving gaps in our favorite dining spots. It’s a harsh reality check for the industry, and we’re here to unpack the drama, the decisions, and the decline. Let’s dig in!
1. **KFC**For decades, KFC reigned supreme as the undisputed king of fried chicken, a reputation that has been severely tested in recent years. In 2025, the brand faced a significant dip in sales, with a growing number of people turning away from its once-iconic offerings. The market has become saturated with numerous fried chicken options, and formidable competitors like Chick-fil-A and Bojangles have enjoyed stellar growth, capturing a new generation of diners.
KFC’s struggles are compounded by persistent quality issues reported by customers and a perception that its menu items are increasingly unhealthy. This shift in public sentiment has translated directly into financial woes. The chain experienced a notable 5% decline in sales during the second quarter of 2025, continuing a worrying downward trend from late 2024. Throughout 2024, sales figures were consistently down, highlighting a prolonged period of difficulty.
Top executives at Yum Brands, KFC’s parent company, have acknowledged the challenging environment. Their “Kentucky Fried Comeback” promotion, an attempt to re-engage customers, unfortunately, didn’t resonate as hoped, failing to generate significant enthusiasm. If KFC doesn’t manage to launch a campaign that genuinely connects with consumers soon, it risks falling into deeper trouble in the competitive fast-food arena.
2. **TGI Fridays**Calling 2025 a “difficult” year for TGI Fridays is a monumental understatement, considering the chain’s prolonged struggles. Once a nationally beloved restaurant, it gradually became viewed as outdated, struggling to innovate and keep pace with a wave of new competitors. This erosion of its appeal was further complicated by a lack of enthusiasm from diners and even a notable “mozzarella stick lawsuit,” signaling a brand in distress.
The culmination of these challenges led TGI Fridays to file for Chapter 11 bankruptcy in November 2024. The filing attributed its financial difficulties to the lasting impact of COVID-19 and its complex capital structure. Despite an initial pledge in the bankruptcy claim not to close any restaurants, the reality shifted quickly, with 30 locations shuttered just a few months later. This followed widespread closures in the period leading up to the bankruptcy, indicating a consistent contraction.
By the end of April 2025, TGI Fridays had just 85 locations remaining across the country, a stark reduction from its former expansive presence. The closures continued, with another unit in Coral Springs, Florida, shutting down in August, and more expected to follow. Despite efforts like appointing a new President for its international franchising arm, the domestic market remains a significant hurdle. The brand’s inability to refresh its image and offerings has left it fighting for relevance in a rapidly evolving dining landscape.
3. **On The Border**The events of 2025 have been particularly brutal for On The Border, a Mexican chain that had served customers for over four decades. This year marked a critical turning point, as the once-popular restaurant filed for Chapter 11 bankruptcy in March. Documents from the filing revealed a staggering financial burden: over $25 million in debt and more than 10,000 creditors, painting a clear picture of severe financial distress.
The bankruptcy claim was not an isolated incident but followed a period of steady decline, with the brand already having lost 40 units in the years prior. Just weeks after its bankruptcy announcement, On The Border intensified its retrenchment, declaring the closure of over 70 additional restaurants. This left the chain with a drastically reduced number of operating units, raising serious questions about its ability to maintain a competitive presence.
A brief moment of hope emerged a few months later when Pappas Restaurants, known for Pappasito’s Cantina, acquired the struggling chain. Pappas Restaurants expressed excitement about the opportunity to help On The Border grow and revitalize. However, this optimism was quickly tempered when yet another unit closed just a month after the acquisition. This rapid turn of events casts doubt on the ease of turning the brand around and leaves its future direction uncertain, suggesting its new owners may face an uphill battle.
4. **Hooters**Hooters’ turbulent year in 2025 serves as a powerful testament to the changing tides of consumer preferences and societal expectations. The famous restaurant, known for its wings and “Hooters Girls,” has increasingly felt like a relic from a different era, grappling with countless accusations of misogyny and ism that have alienated a significant portion of modern diners. The unique concept that once defined its appeal has now become a liability.
In April 2025, time finally caught up to the restaurant chain, and it filed for bankruptcy. This decision was made amidst a challenging economic climate characterized by customers tightening their budgets and soaring labor costs. However, it’s undeniable that the primary driver of its decline was the growing disinterest from diners who have simply moved on from its controversial and outdated concept, seeking more contemporary and inclusive dining experiences.
The bankruptcy filing was followed by more grim news in June when Hooters suddenly announced the closure of dozens of its restaurants. Later in the year, as part of a strategy outlined during its bankruptcy, the chain transitioned to a pure franchise model. This plan aims to safeguard Hooters’ future by relying on franchisees to keep the brand alive. However, the success of this model is precarious, dependent on whether franchisees view it as a safe and viable investment in a brand struggling for modern relevance.
5. **Abuelo’s**Abuelo’s, established in 1989, has been caught in a slow but steady decline over recent years, with 2025 appearing to be its most challenging year to date. After decades of consistent growth, peaking in 2009, the chain experienced a significant downturn exacerbated by the COVID-19 pandemic. Its unit count, once at 40 locations, dropped dramatically, pushing it towards severe financial distress.
In 2025, Abuelo’s officially filed for bankruptcy, citing a confluence of operational pressures. The chain reported a sharp increase in ingredient costs, persistent difficulties in recruiting and retaining staff, a notable slump in sales, and a general shift in customer preference toward other dining options. These factors collectively illustrate a brand struggling to maintain its economic footing in a highly competitive market.
Despite the bankruptcy filing and its precarious financial situation, Abuelo’s expressed a firm commitment to keeping all 16 of its remaining units open. The company underscored its dedication to both its customers and employees, striving to maintain operations. However, the significant reduction in its physical footprint and the deep-seated operational issues make the path to recovery extremely challenging. It remains unclear how Abuelo’s plans to fundamentally reverse these trends and secure its long-term viability.
6. **Chipotle**Even powerhouse chains like Chipotle are not immune to the economic headwinds of 2025, proving that signs of struggle can emerge even among the most successful. On the surface, the fast-casual Mexican chain projects an image of robust health, with thousands of stores nationwide and immense brand recognition. Yet, a closer examination reveals a more turbulent financial reality.
In July 2025, Chipotle announced a significant 4% decline in sales compared to the previous year. This concerning dip was accompanied by reports of lower operating margins and a decrease in earnings per share, signaling a broader pressure on its profitability. The spending slowdown that had previously seemed to bypass Chipotle finally caught up, impacting its performance.
The market reacted sharply, with Chipotle’s stock price taking a noticeable nosedive this year, shedding 28% of its value by August 2025. This substantial drop is a clear indicator of reduced investor confidence, suggesting that the company faces underlying challenges beyond surface appearances. While not in as critical a state as some other chains, Chipotle’s struggles serve as a potent reminder that even industry leaders must constantly adapt to maintain their footing in an unpredictable economic environment.
7. **Subway**Subway, the world’s most recognizable sandwich shop, might seem impervious to decline due to its vast network of approximately 20,000 locations across the U.S. However, this impressive number is a significant decrease from its peak of around 27,000 restaurants in 2015, marking a steady and concerning contraction over the past decade. The sheer size of its empire masks a deeper struggle for domestic relevance.
The trend of closures accelerated in 2024, with a massive 631 Subway restaurants shutting their doors in the U.S. The company also spent much of 2025 without a permanent CEO, leaving it without clear direction during a crucial period of crisis. This leadership void, coupled with intense competition from rivals like Jersey Mike’s, which has been experiencing stellar growth, has contributed significantly to its domestic woes.
While Subway has enjoyed two consecutive years of growth in international markets, its U.S. operations face persistent challenges. Franchisees have expressed increasing irritation with the business model, signaling internal discord that further complicates recovery efforts. Although ambitious international expansion plans are in motion, addressing its domestic market’s competitive disadvantages and internal grievances will be critical for Subway to halt its decline and regain its once-dominant position in America.
8. **Denny’s**Denny’s, proudly positioning itself as “America’s Diner,” found itself in a rather un-diner-like predicament during 2024 and continuing into 2025. It seems Americans weren’t quite reciprocating the enthusiasm for its classic comfort food offerings. The chain reported a significant decline in sales, struggling fiercely to regain the customer foot traffic it lost since the pandemic. The shift in dining habits, with family dining plummeting by roughly 20%, left Denny’s scrambling to find its footing and make up for the substantial revenue gap.
This struggle translated into a painful series of closures. Toward the end of 2024, Denny’s announced plans to shutter 50 underperforming restaurants within a few months, a move that followed a period where many of its establishments stopped operating round-the-clock to cut costs. But the bad news didn’t stop there. In the same announcement, the company revealed an even larger wave of closures, targeting 100 more restaurants throughout 2025. Just a few months later, they upped the ante, declaring plans to close “dozens more.”
The grand total for this massive retrenchment? A staggering 180 restaurants slated to close in just 24 months, representing a huge proportion of its remaining locations. To put that into perspective, imagine nearly 200 of your go-to diner spots just… disappearing. This aggressive downsizing was paired with a sluggish “Diner 2.0” renovation program, which had only managed to refresh a few dozen units, making the chain feel increasingly out of step with modern dining expectations and falling behind its nimbler competitors.
In a desperate bid to lure customers back through its doors, Denny’s recently rolled out a wide-scale “Value Menu” offering, with meals priced at just $5. It’s a classic move in the struggling restaurant playbook: slash prices to drive volume. While we love a good deal, this strategy highlights the profound challenges the chain faces in recapturing its former glory and reversing its extensive decline in a fiercely competitive market.
9. **Planta**It’s always a bit tough to see a restaurant chain built on genuinely noble ideals hit hard times, and that’s precisely the case with Planta. Launched in 2016, this Toronto-based, plant-based restaurant chain offered a full-service experience with an array of vegan options. It managed to expand impressively to 18 units, gracing major cities across both the United States and Canada, becoming a beacon for ethical and sustainable dining.
However, even a mission-driven concept isn’t immune to economic headwinds. In May 2025, Planta made the difficult announcement that it was filing for Chapter 11 bankruptcy. The core reason? Customers, feeling the pinch themselves, simply weren’t spending as much money as they used to. This shift in consumer behavior directly impacted Planta’s balance sheet, making it increasingly difficult to meet its obligations and deliver returns for its creditors.
The bankruptcy claim triggered a comprehensive audit of its restaurant locations, and the findings were grim. The majority of Planta’s units were deemed unsustainable. In a stark announcement in September, the company revealed plans to close all but eight of its existing locations. This meant that ten Planta restaurants were cued up for closure, a drastic measure designed to help the chain stay afloat and continue operations in a significantly reduced capacity.
While the commitment to its plant-based mission remains strong, the path to recovery for Planta is undoubtedly steep. The extensive closures and the underlying issue of reduced consumer spending on dining out make this a precarious situation. We’re certainly rooting for them, but it’s clear that this once-growing, innovative chain will be battling for stability for quite some time, navigating the complexities of financial restructuring in a challenging market.
10. **Bar Louie**Bar Louie, a gastrobar concept that first opened its doors in 1990, has been on a decade-long rollercoaster ride, and unfortunately, it’s been mostly downhill. The chain reached its peak in 2018, boasting an impressive portfolio of more than 130 locations. But then, the storm clouds gathered. By January 2020, even before the global pandemic truly hit, Bar Louie filed for Chapter 11 bankruptcy and put itself up for sale – a clear sign of deep-seated issues that the pandemic undoubtedly exacerbated.
Fast forward to March 2025, and history, sadly, repeated itself. Bar Louie once again filed for bankruptcy, demonstrating a concerning inability to escape its dire financial circumstances. By this point, its physical footprint had shrunk enormously, leaving it with a mere 48 operating locations at the time of the filing. This rapid contraction speaks volumes about the brand’s struggles to maintain its competitive edge and attract a consistent customer base.
Just a few months after its second bankruptcy announcement, another blow landed: Bar Louie announced the closure of its Arlington, Dallas location. It appears that the gastrobar concept, which once held such appeal, has simply lost its luster with customers. In a market constantly craving fresh experiences and evolving trends, Bar Louie has become one of the primary casualties of shifting consumer tastes, struggling with a brand identity crisis that it has yet to overcome.
The repeated bankruptcy filings and the steady decline in unit count paint a clear picture of a brand fighting for relevance. While many restaurants face challenges, Bar Louie’s journey underscores the difficulty of adapting a concept that may have simply run its course. The once-bustling gastrobars are now a stark reminder of how quickly even established brands can fade in a fiercely competitive and ever-changing dining landscape.
11. **eeges**For folks in Southern Arizona, eeges has been a beloved institution since 1971, famous for its subs and slushies. However, the chain, much like others on this list, hit a significant bump in the road. In December 2024, eeges shuttered five of its restaurants and filed for Chapter 11 bankruptcy. While it still operates 20 locations in the Tucson and Phoenix areas, this was a clear signal that things were far from peachy.
A key point of contention for many loyal customers was the company’s sale to 39 North Capital, an investment firm. Long-time fans expressed that “everything went downhill” after the acquisition. As Lance Dahlstrom, an eeges fan, candidly told 13 News, “It’s been a staple of Tucson for years. Ever since they sold it, the original owner sold it, it’s gotten more expensive and less quality.” This decline in perceived quality and value is a classic sign of a brand identity crisis, eroding customer trust and loyalty.
The financial troubles were also laid bare. Bankruptcy documents revealed that eeges was burdened with substantial debts, owing restaurant supplier Sysco over $1.2 million. Additionally, it owed $725,000 to another vendor, Merit, $410,000 to Ramp Flex, and $100,000 to Punchh, Inc. These figures underscore the severe financial distress that led to its bankruptcy filing and the subsequent closures, reflecting significant operational challenges and strategic missteps under new ownership.
The story of eeges serves as a cautionary tale: for some brands, a change in ownership, especially to an investment firm, can drastically alter the customer experience and lead to a perception of declining quality. Despite its strong local heritage, the chain is now navigating a complex financial restructuring while simultaneously trying to win back the hearts (and dollars) of its devoted customer base, a challenge made steeper by the persistent complaints about rising prices and diminishing quality.
So, there you have it: a deep dive into the ongoing struggles of some of America’s once-favorite chain restaurants. From the king of fried chicken losing its crown to beloved local institutions succumbing to modern pressures, 2025 has been a year of reckoning. It’s a vivid reminder that in the fast-paced, ever-evolving world of dining, even the biggest players aren’t guaranteed a smooth ride. Whether it’s declining sales, brand identity crises, strategic missteps, or the sheer weight of economic headwinds, these stories prove that adapting, innovating, and truly understanding what diners want is more crucial than ever. The restaurant landscape is a competitive arena, and only the most resilient, adaptable, and customer-focused will truly thrive. Keep those taste buds ready, because the only constant in this industry is change!
