Chain Restaurants Around The Country Are Permanently Shuttering Locations Because Of Coronavirus
The restaurant industry was one of the hardest hit by the COVID-19 pandemic as social distancing regulations closed down dining rooms and bars. Now, as many locations are beginning the reopening process, we're beginning to see the toll those closures have taken not only on local restaurants, but also on national chains and their franchisees.
Many outlets have taken a look at these closings, the first of which was Business Insider, which reported that nine major chains have closed 600 of their locations permanently. This includes some of the closings—or feared closings—that have been previously reported, like TGI Friday's saying 20 percent of its restaurants may never re-open post-coronavirus, and others we didn't previously know of, like CFRA Holdings reportedly filing for bankruptcy and closing 49 of its IHOP franchises (though IHOP declined to comment or confirm these closures to Business Insider "citing CFRA's ongoing court proceedings").
The parent company of restaurants Brio Italian Mediterranean and Bravo Fresh Italian filed for Chapter 11 bankruptcy protection and closed 71 restaurants, according to Restaurant Business Online. Business Insider pointed out that 15 Denny's locations owned by one franchisee had closed.
"Due to the severe financial environment caused by the COVID-19 pandemic, our franchisee in this area has regrettably decided to close these locations," a Denny's representative said in a statement to BI: "Denny's has been working with its franchise owners to assist in helping them through this crisis, but the final decision to close is in the hands of each franchise business owner and their particular circumstances."
Souplantation, also known as Sweet Tomatoes, closed all of its almost 100 locations early this month.
Additionally, Ruby Tuesday reportedly shuttered almost 150 of its locations, and founder and managing partner of Ruby Tuesday owner NRD Capital Aziz Hashim told Restaurant Business Online that the current crisis has accelerated these types of closures and that the total number is yet to be determined.
In April, the National Restaurant Association said that the restaurant industry expects to lose $80 billion in sales by the end of that month and up to $240 billion by the end of 2020. When these numbers were estimated, four in 10 restaurants across the country were closed at that time. And as Hashim pointed out, many landlords have been understanding to restaurants as social distancing closed their dining rooms, but as the months go on, he worries their patience will wear thin, causing more locations across the industry to close.
“Starting in the third quarter, patience will wear out,” Hashim said. “There’s going to be a blood bath.” You can see a full breakdown of the closures here.
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