Something has been quietly unfolding across America’s strip malls and highway exits. The restaurants that once defined casual dining for millions of families – the places where birthdays were celebrated and Friday nights were spent – are shutting their doors at a pace that’s hard to ignore. 2024 proved to be a tough year for restaurants across the board. As the costs of food and labor increased, customers changed their dining habits, and several chains were left with no choice but to close up shop. The closures span fast food, casual dining, and everything in between, and certain states are absorbing far more of the pain than others.
The Broad Scope of the Crisis: Dozens of Chains, Hundreds of Closures
Many restaurant chains shut down locations during 2024. The reasons are varied, but inflation almost certainly led the way, with wages, ingredient costs, and other expenses increasing while cost-conscious consumers dined out less or spent less when they did. The scale of closures across major brands is staggering when viewed all at once. Even as the broader economy began to rebound, dozens of brands – including KFC, Red Lobster, Subway, TGI Friday’s, Wendy’s, and Denny’s – closed restaurants.
The reason for the closures is relatively simple: sales have been weak, costs have increased, and profitability has taken a hit. According to the National Restaurant Association, median pretax income has declined for both full-service and limited-service restaurants since 2019. When profits decline, that typically yields restaurant closures and bankruptcy filings. The National Restaurant Association also reported that 75% of restaurant traffic came from off-premise orders in 2024, a trend that continued into 2025 – a dramatic shift that left many traditional dine-in models financially unsustainable.
TGI Friday’s and Denny’s: Casual Dining Icons in Retreat
The 59-year-old TGI Friday’s company filed for Chapter 11 bankruptcy in November 2024, after closing about 100 locations earlier in the year. In January 2024 alone, the chain shuttered 36 “underperforming” restaurants across 12 states, including Massachusetts and New Jersey. In early 2025, following the bankruptcy filing, the chain closed an additional 30 locations nationwide. The company has since shifted to a fully franchised model, with about 84 U.S. franchise-owned locations remaining open as it restructures its operations.
In October 2024, Denny’s revealed plans to close 150 restaurants by the end of 2025, with the timeline split between 50 closures in 2024 and 100 closures in 2025. However, the actual closure numbers exceeded the original timeline – the company ended up closing 88 locations in 2024, 38 more than planned, and now expects to close between 70 and 90 restaurants in 2025. The plan is to modernize its remaining restaurants over the coming years in a renovation plan the chain has dubbed Diner 2.0.
Red Lobster’s Bankruptcy: A Multi-State Catastrophe
On May 19, 2024, Red Lobster Management LLC and fourteen of its affiliates filed petitions in the United States Bankruptcy Court for the Middle District of Florida seeking relief under Chapter 11 of the United States Bankruptcy Code. The collapse was swift and brutal for thousands of workers. Closures included 17 in the chain’s home state of Florida, 11 in New York state, 10 in Texas, and eight in California.
A subsequent round of closures spanned 15 states, with Florida, Illinois, and Virginia each losing three locations. Other affected states included Arizona, Arkansas, California, Colorado, Georgia, Indiana, Minnesota, Missouri, New York, North Carolina, Ohio, and South Carolina. Red Lobster’s troubles included “a difficult macroeconomic environment, a bloated and underperforming restaurant footprint, failed or ill-advised strategic initiatives, and increased competition within the restaurant industry,” as CEO Jonathan Tibus wrote in court documents. The ill-fated “Ultimate Endless Shrimp” promotion, which became a permanent offering in June 2023, overwhelmed restaurants and contributed to millions in losses before the chain’s eventual collapse.
Texas and Florida Take a Heavy Hit from Hooters and Burger King
In mid-2024, approximately 40 Hooters restaurants closed across the United States. Texas and Florida – the states with the most Hooters locations – were hit particularly hard, with at least 15 restaurants closing in Texas and four in Florida. Other states affected included Illinois, Kentucky, and Ohio. The situation only worsened from there. Additional closures followed in March 2025, with approximately 30 to 40 more locations shuttered nationwide, including three in Texas and about six in Florida. In February 2025, reports emerged that Hooters was preparing to file for bankruptcy, with the company owing approximately $376 million. It officially filed for bankruptcy in March 2025.
The Burger King trend also continued into 2024 and 2025, with closures impacting locations in Florida, Georgia, Nebraska, and New York. In April 2025, a major Burger King franchisee with 57 restaurants in Florida and Georgia filed for Chapter 11 bankruptcy, indicating that more locations could be at risk. Hooters had already seen a nearly 15% decline in system-wide sales since 2018 and was burdened by $300 million in debt even before its latest round of closures began – a sign the warning signs had been there for years.
California Hit by Wage Laws and Chain Pullbacks
Just over one year ago, Governor Gavin Newsom signed a law increasing the minimum wage for limited-service restaurants in California, with at least 60 national locations, from $16 to $20, effective April 1, 2024. Estimates suggest the higher minimum wage resulted in job losses of 9,600 to 19,300 in limited-service restaurant jobs as of September 2024, six months after the wage took effect. Chains began making difficult decisions rapidly. Rubio’s Coastal Grill announced the closure of 48 restaurants in California amid rising business costs, deciding to shutter nearly one-third of its restaurants following “a review of its operations and the current business climate.”
Menu prices in California’s fast-food sector increased by 14.5% from September 2023 to October 2024, almost double the national average of 8.2%, making fast food significantly more expensive for consumers. MOD Pizza saw more than 25 stores close nationwide, with California taking the bulk of that hit – five different locations closed in 2024 alone, with the potential for more by year’s end. With Red Lobster having filed for bankruptcy and announcing the closure of over 80 different locations, California said goodbye to six of them.
Wendy’s, Applebee’s, and the Midwest Squeeze
Wendy’s executives announced that they planned to close 140 locations by the end of 2024. The closing units were described as “outdated” stores in “underperforming trade areas” with lower-than-average annual sales and operating margins, according to Wendy’s President and CEO Kirk Tanner during an October 31 earnings call. In 2024, at least 240 Wendy’s locations closed. Looking ahead, Wendy’s plans to shutter additional restaurants starting in the fourth quarter of 2025, with a “mid-single-digit percentage” of its U.S. stores potentially affected – which could amount to about 300 locations, according to the Associated Press.
At least four Applebee’s restaurants are set to shut down in New York, Missouri, and Indiana, including locations that had served their communities for decades, according to Newsweek. Over the last several years, Applebee’s has faced numerous closures, shuttering around 300 restaurants since 2017. Last year, the chain closed 46 locations, and Dine Brands Global’s president Tony Moralejo confirmed that 25 to 35 more Applebee’s locations would shut down in 2024. Illinois, Tennessee, and Missouri also saw a string of Hardee’s closures, with storefronts in Tennessee, Missouri, and Illinois shut down, sparked in part by the brand’s bankruptcy troubles, which previously caused franchise shutdowns in Georgia, Montana, South Carolina, and other states in 2023.
