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Factors like retaining customers and expensive overhead normally haunt small restaurants and sink them quickly, and even giant restaurant chains are also closing due to changing business trends. Here are some real heavy hitters on this list, from Outback Steakhouse to the International House of Pancakes themselves, IHOP. Can you believe these big-names may shut down?
Has your nearest Ruby Tuesday shut its doors? The chain once had branches in many malls of most American cities, but more and more Ruby Tuesday restaurants close each year. It has been amplified by the resignation of the CEO JJ Buettgen and its sale to NRD Capital in 2017. More than 400 Ruby Tuesday restaurants have closed around the country since 2009.
Hooters restaurants changed the industry undoubtedly as few restaurants embrace beer and boobs the way that it has. The restaurant chain has closed many locations in the 2010s as its sales keep stagnating. There are some thoughts that its sales model isn't quite connecting with younger demographics, so the chain is reacting by opening a new restaurant concept called Hoots that features more modestly dressed waitresses.
Bob Evans is famous for its Southern-inspired food, like its hearty breakfast platters, biscuits, and chicken pot pies. Nevertheless, their food didn't seem to be enough to sustain the business in the mid-2010s, as 2016 saw Bob Evans closed many of the locations that were identified as underperformers.
Buffalo Wild Wings is a relatively young restaurant chain to face financial hardships. The chain's struggles have been attributed to several factors, including the rising cost of chicken wings brought on by its popularity, and the tendency for young people to order takeout from meal delivery services or to cook at home, which has made it hard to maintain such high sales volume. In 2017, Buffalo Wild Wings was acquired by the parent company of fast-food chain Arby's.
T.G.I. Friday's is a casual dining restaurant that is well known to many Americans. First opened in 1965, T.G.I. Friday's is popular for its drink specials, appetizers, and burgers. The restaurant's endless appetizer promotion is popular, even if it isn't as profitable as diners who order off the regular menu and it might lead to the bankruptcy of the chain due to lack of profit.
Cheesecake Factory is definitely in trouble with younger customers who have more health awareness. The food is indeed delicious, but it is packed with empty calories that people just have no interest in. In other words, the chain is losing favor with a changing demographic that is actively against the things that make Cheesecake Factory the Cheesecake Factory. It's difficult to see how it could solve this problem without a fundamental change to its core concept.
The most effective way to close a restaurant chain is to have a food scare, while Chipotle has had several ones in recent years, even including an E-coli outbreak. Dozens of customers were infected, and the outbreak became a national news story. Since then Chipotle has struggled by working on new food options and high-tech ways to make ordering and delivery easier, but people are just unwilling to take the risk of getting sick by eating there.
Chili's was once synonymous with its baby back ribs and the restaurant serves up many particular menu items. However, in recent years, Chili's has faced challenges from declining sales and the company's stock plummeted by 40% in 2017. Since then, Chili's has tried to revamp its menu and clean up the look of its locations from its cluttered decoration to a more modern look, including more open seating.
Jack in the Box is in an oversaturated market fighting against major players like McDonald's and Burger King, but just can't keep up. The chain is closing stores to reduce costs, which might not be enough - it even sold Qdoba to try and stave off a larger closure. Without a safety net and people leaving for other options, perhaps it won't be long before Jack in the Box closes for good.
Bojangles is immensely popular in North or South Carolina, and that popularity initially led the company to attempt expanding to other states, with nowhere near success. Although Bojangles is not at risk of closing down yet, the company is pulling back on those restaurants outside of the state. This inability to expand further may hurt the company in the long run, but for now, they should be fine if they keep staying in their comfort zone.
Since millennial customers continue to make up a larger share of the potential customer base, Applebee's has been struggling to find a new core demographic. It underwent millions of dollars in renovations and recipe changes in order to attract millennial customers. However, this hasn't seemed to work since it's still closing restaurant locations each year.
Pollo Tropical is insanely popular in Florida but just can't get a foothold anywhere else. The last several years have seen a push into other southern states, but the company decided to close all of those stores except the ones around Atlanta, GA(,?) due to low profits. Although the company seems to be better after downsizing, it is hard to see where it can go from here if it can't expand anymore.
Bad management has been Qdoba's biggest problem over the years. While it does good in the market, bad management decisions and missed opportunities seem to hurt the brand quite a bit. It faced troubles when its costs increased significantly due to legislative changes. Besides, the company did miss its best opportunity to draw in customers as an alternative to Chipotle when it faced the food safety crisis.
From bad weather to hard competition, Sonic's downfall can be blamed on various things. It has led many observers to believe that Sonic is on a steep downturn that it just might not be able to recover from. The restaurant chain is looking for several ways of changing the situation through pricing and so on, but the drive-in experience just might not be the right fit for everyone.
Like other chain restaurants on this list, Outback Steakhouse, owned by Bloomin' Brands, also has been impacted by trends in millennial customers, including those who buy high-quality steaks to cook for themselves at home instead of enjoying steaks in restaurants. Influenced by the lack of customers, it might face the risk that the restaurant will go bust as well.
Restaurants across the country are seeing major declines because of the same invisible trends that are pulling customers away, and Joe's Crab Shack is no exception. The chain saw nearly one-third of its stores shut down suddenly because of a rapid decline in sales. What's worse, its parent company filed for bankruptcy. Though Joe's Crab Shack survived at the last minute when the company was bought by an investor, things just don't look good for Joe's.
With younger customers moving toward cost-effective methods of cooking at home and healthier options, IHOP can't sell as many pancakes, crepes, and omelets as it used to. This well-known breakfast place is struggling to keep its customers as well. Unfortunately, the once-popular pancake house may have to close soon if it can't find another way to draw in customers.
Thanks to lower sales, higher operational costs, and state minimum wage requirements in the states where they have stores, Sweet Tomatoes and its sister restaurant Souplantation filed for bankruptcy protection in 2016. As a result, the restaurant chain was sold to a private investment firm the next year. Due to the bankruptcy proceedings, there are fewer than 100 restaurant locations across the United States.
Marie Callender's, known for homestyle meals, pot pies, and classic American fare, is a legitimate restaurant chain that has been around since the '50s. In its heyday, the chain had owned over 80 different locations in western America. For decades, it remained popular enough to keep up 50 stores. But recently, the chain gradually closed over 20 of them. The holding company filed for Chapter 11 bankruptcy in 2019, potentially marking the end of the restaurant chain.
Steak 'n Shake, famous for taking prime steak and grounding them into delicious burgers, has fallen off its prime as well. Over $2.5 million were in losses for the fiscal year 2018 and the outlook for 2019 was even worse. The company believes it was outdated kitchen equipment and design that led to decline of customers. Over 100 locations have shut down temporarily as the company looks into franchising the remaining stores for buyers.
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