Additional Coverage:
- These 13 Restaurants Are Most Likely To Go Bankrupt and Close in 2026 (financebuzz.com)
As inflation continues to pinch wallets across the country, many Americans are tightening their belts when it comes to dining out. Despite ongoing price hikes, consumers are forced to make tough decisions on where-and when-to spend their restaurant dollars. This shift in spending habits is having serious repercussions in the restaurant industry, with several well-known chains struggling to stay afloat.
Here’s a look at some of the restaurants facing significant financial challenges or closures in 2026:
1. Long John Silver’s
Once a staple in fast-food seafood with over 1,000 locations, Long John Silver’s has seen a drastic decline. Over the past three years, more than 150 stores have closed, leaving fewer than 500 remaining.
In 2025, the brand even added chicken to its menu and revamped its logo in a bid to attract more customers, signaling a shift away from its core identity.
2. TGI Fridays
The casual dining pioneer known for “Ladies’ Night” filed for bankruptcy late in 2024 after financial missteps. By 2025, fewer than 100 U.S. locations remained.
While the chain plans to expand internationally to 1,000 locations by 2030, its American presence is shrinking. The remaining spots have refocused on quality offerings like house-made sauces and hand-cut steaks, hoping to appeal to diners seeking value.
3. Outback Steakhouse
At its peak, Outback boasted around 750 restaurants. However, parent company Bloomin’ Brands announced over 40 closures in late 2025, with many locations shutting down due to lease expirations.
With fewer than 670 locations now open, the steakhouse is implementing a comprehensive turnaround strategy, though consumer confidence remains uncertain.
4. Jack in the Box
Reeling from a costly failed acquisition of Del Taco, Jack in the Box is navigating heavy losses-over $400 million-and has launched its “Jack on Track” recovery plan. This includes shuttering up to 200 locations and pausing dividend payments.
Ending 2025 with $1.7 billion in debt, the fast-food chain’s future is uncertain.
5. Wendy’s
Wendy’s announced plans to close hundreds of restaurants through 2026, following 140 closures the previous year aimed at improving profitability. With declining U.S. sales and pressures from shrinking household budgets, Wendy’s is grappling with maintaining quality while keeping prices competitive.
6. Noodles & Company
The fast-casual chain faces financial difficulties amid falling revenue and plans to close 30 to 35 locations. Attempts to revamp the menu and raise prices have yielded mixed results, with customer traffic declining.
The company has also faced the threat of delisting from Nasdaq, casting doubt on its long-term viability.
7. Starbucks
The coffee giant unveiled a $1 billion restructuring plan in late 2024, including hundreds of store closures and workforce reductions. While same-store sales had declined for six consecutive quarters, the company reported a positive sales uptick in late 2025 and early 2026.
Still, Starbucks must navigate changing consumer habits as customers cut back on luxury purchases.
8. Denny’s
After announcing plans to close 70 to 90 locations in 2025 and selling to private equity firms, Denny’s is facing declining sales, with locations down nearly 3% in late 2025. The classic diner chain’s future remains in question as it adjusts to shifting market demands.
9. Hardee’s
Following bankruptcy filings and ownership changes, Hardee’s has seen many locations close permanently. The company is attempting to reclaim some closed stores, but ongoing legal battles and a reduced footprint pose significant challenges.
10. Boston Market
Once boasting over 1,200 locations, Boston Market has essentially ceased operations. Repeated bankruptcy attempts and filing restrictions have left little hope for a turnaround.
11. Smokey Bones
Owned by FAT Brands, Smokey Bones filed for Chapter 11 bankruptcy in early 2026, resulting in the closure of all remaining locations.
12. On the Border
The Tex-Mex chain filed for bankruptcy in 2025 after closing 40 locations. High operating costs and liquidity issues threaten the future of the remaining restaurants.
13. Bar Louie
Having filed for bankruptcy twice since 2020, Bar Louie’s financial struggles continue. With only about 40 locations left and debt potentially exceeding $100 million, the future looks precarious.
Looking Ahead
The surge in restaurant bankruptcies signals a challenging year for dining out in 2026.
As consumers focus on essential grocery expenses and seek out every possible saving, eating out is increasingly becoming an occasional treat rather than a regular habit. Unfortunately, many restaurant executives seem to underestimate the depth of these challenges, hoping cosmetic changes alone will revive their brands.
Financial Tips for Consumers
Even in tight times, there are ways to improve your financial situation:
- Increase your income through side hustles or other opportunities that fit your schedule.
- Grow your wealth by understanding your finances, planning ahead, and leveraging compound interest.
- Take advantage of savings opportunities like senior discounts, better insurance rates, and avoiding hidden money traps.
As the restaurant landscape evolves, careful budgeting and smart money moves will be essential for both consumers and businesses alike.
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- These 13 Restaurants Are Most Likely To Go Bankrupt and Close in 2026 (financebuzz.com)