Additional Coverage:
- These 13 Restaurants Could Still Go Bankrupt and Close in 2026 (financebuzz.com)
As 2025 unfolded, consumers loudly expressed their concerns over rising prices, yet inflation kept nudging costs higher. This has forced many diners to rethink when and where they can afford to eat out, leading to significant shifts in the restaurant industry. Here’s a closer look at some of the most at-risk restaurant chains in 2026, as they grapple with financial challenges and changing consumer habits.
1. Long John Silver’s
Once a staple for fast-food seafood lovers, Long John Silver’s has seen a steep decline. From over 1,000 locations at its peak, the chain shrank to 479 by the end of 2025.
Despite attempts to revamp its brand by adding chicken to the menu, the closures of roughly 110 to 120 restaurants over the last three years signal ongoing struggles.
2. TGI Fridays
The casual dining pioneer filed for bankruptcy in late 2024 due to financial missteps, shrinking from 269 U.S. locations to just 76 by mid-2026. However, the brand is betting on an international comeback, aiming for over 1,000 global locations and $2 billion in annual revenue by 2030.
The remaining U.S. spots are focusing on quality enhancements like hand-cut steaks and house-made sauces to regain customer loyalty.
3. Outback Steakhouse
Once boasting 754 locations, Outback has reduced to 659 as of 2026 after closing over 40 restaurants in late 2025. Parent company Bloomin’ Brands has launched a “comprehensive turnaround strategy” to address financial woes, though many consumers feel the chain is out of touch with current dining expectations.
4. Jack in the Box
Reeling from a costly failed acquisition of Del Taco, Jack in the Box is executing its “Jack on Track” plan, which involves closing up to 200 restaurants and halting dividends to shareholders. With $1.7 billion in debt at the end of 2025, the chain is focusing on shuttering underperforming locations while opening select new ones, aiming to maintain around 2,100 restaurants by the end of fiscal 2026.
5. Wendy’s
Wendy’s has been aggressively closing stores-289 locations in the first half of 2026 alone-as part of a turnaround effort in response to declining sales and profitability. Interim CEO Ken Cook cited that underperforming restaurants were damaging the brand’s reputation.
With a current count of 5,724 U.S. locations, further closures seem likely under new leadership.
6. Noodles & Company
After facing serious financial hurdles and threats of Nasdaq delisting, Noodles & Company appears cautiously optimistic. Despite closing 27 locations in early 2026 (with more planned), the chain reported a 10.3% jump in second-quarter comparable sales and raised its full-year outlook, signaling a potential turnaround.
7. Starbucks
The coffee giant announced a $1 billion restructuring in late 2025, closing hundreds of underperforming stores and laying off about 900 non-retail employees. Yet Starbucks continues to open new locations and recorded a 7.9% increase in U.S. comparable-store sales in Q3 2026, showing resilience amid the shakeup.
8. Denny’s
Denny’s continues to shrink its footprint, closing 70 to 90 restaurants in 2025 and following up with further closures in 2026 as it focuses on cutting low-performing locations. Having gone private in early 2026, the diner chain is recalibrating its strategy but remains committed to the U.S. market.
9. Hardee’s
Hardee’s has battled franchisee bankruptcies and a decline from 1,754 U.S. locations in 2023 to 1,485 in 2026. Despite setbacks, the chain is reopening some former sites as company-owned stores and rolling out new menu items, showing a focus on rebuilding and brand strengthening.
10. Boston Market
Once a rotisserie chicken powerhouse with nearly 400 locations pre-pandemic, Boston Market has dwindled to just six restaurants as of mid-2026. The chain faces ongoing financial and legal challenges, leaving its future uncertain.
11. Smokey Bones
All Smokey Bones restaurants have closed after FAT Brands, its parent company, filed for Chapter 11 bankruptcy in January 2026.
12. On the Border
The Tex-Mex chain filed for bankruptcy in 2025 amid rising costs and closed most of its U.S. company-owned locations by mid-2026. Now primarily operating a handful of franchised spots, the brand’s future in the U.S. remains unclear under new ownership.
13. Bar Louie
Surviving two bankruptcies within five years, Bar Louie now operates just 39 locations after emerging from bankruptcy under new ownership in late 2025. The chain has closed nearly 100 restaurants since 2020 but continues to operate on a smaller scale.
The Bottom Line
The wave of restaurant closures and bankruptcies reflects broader economic pressures that consumers face, from rising grocery costs to tightening budgets.
Dining out is increasingly becoming an occasional indulgence rather than a weekly routine. Many restaurant leaders seem to hope that refreshed decor or rebranding will turn things around, but the root challenges demand deeper strategic changes.
Practical Money Tips for Consumers
No matter your financial situation, there are steps you can take to improve your outlook:
- Boost your income: Consider side hustles or other ways to supplement your earnings.
- Grow your savings: Harness the power of compound interest and seek professional advice for long-term planning.
- Seize opportunities: Maximize discounts and benefits, especially if you’re a senior or a homeowner, and avoid hidden money traps.
In tough economic times, smart money management is key-whether at the grocery store or the dinner table.
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- These 13 Restaurants Could Still Go Bankrupt and Close in 2026 (financebuzz.com)