Dive Brief:
- Razzoo’s Cajun Cafe, a 20-unit casual chain located primarily in Texas, filed for Chapter 11 bankruptcy protections on Wednesday, court documents filed with the Southern District of Texas Houston Division show.
- The concept was founded in 1991 in Dallas and grew to 24 units across Texas, North Carolina and Oklahoma. It closed four underperforming restaurants in 2024 and 2025 due to market factors and liquidity issues, Philip Parsons, Razzoo’s CEO said in a court filing.
- Parsons said sales declined due to shifts in consumer spending, diner preferences for convenience, affordability and delivery following the COVID-19 pandemic. Economic uncertainty, plus a heavy discounting and media presence from casual dining competitors, also weighed on sales.
Dive Insight:
As consumers traded down to fast casual and quick service restaurants because of inflation and higher interest rates, casual chains like Chili’s and Applebee’s capitalized with aggressive marketing and value-oriented campaigns. The mounting competition negatively impacted Razzoo’s traffic, Parsons said.
“Debtors’ sales have continued to be unfavorable to forecasts in light of the heavy competition among casual dining chains to attract consumers searching for best value to fit their strained budgets,” Parsons wrote.
While Chili’s, Olive Garden and Applebee’s have turned traffic positive recently, other casual dining brands are still seeing sales declines. Denny’s and IHOP have both seen same-store sales declines continue despite value plays, and branding controversy cost Cracker Barrel a significant traffic drop…