8 Restaurant Chains That Are Struggling Financially

With their fancy marquees and constant all-you-can-eat flash sales, it’s tempting to think that franchising a restaurant chain is a guaranteed financial success, whether it’s McDonald’s or Hardee’s or even Planet Hollywood. However, this isn’t always the case. According to DoorDash, the average restaurant profit margin is only between zero and 15%, though most fall between the 5% and 10% ranges.

Moreover, the overall picture for restaurant food chains is a bit more nuanced today. A single franchise owner for a chain like Hardee’s or Hooters might have many stores — 79 or so — but the corporation that licensed the franchisee could have 49 more franchisees with each having its own passel of stores. If one franchisee out of the 50 files for bankruptcy, maybe that’s no biggie. However, if you add to that sluggish sales among the other franchisees, a more complete picture emerges. While the corporation that licenses all those franchises may not technically be bankrupt, this doesn’t mean the financial picture’s rosy. With the franchise model, it’s a bunch of smaller businesses under the umbrella of a bigger one. If enough go under, eventually, the corporation will, too.

To add insult to injury, many owners within the franchise system may try to sell off properties that aren’t doing well, but not quite bankrupt. Within the last several years, for example, hundreds of McDonald’s franchise owners have sold their stores. Suffice it to say that what’s happening with McDonald’s franchisees is a snapshot of the financial troubles plaguing the whole industry. Here’s a closer look at a few other restaurant franchises that are also feeling the financial heat.

Read more: Fast Food Breakfast Sandwiches Ranked From Worst To Best

Boston Market

With a menu filled with the likes of hot rotisserie chicken, thick slices of meatloaf or specialty hams, creamy macaroni and cheese, and heaps of steaming veggies, it’s difficult to believe that the Boston Market restaurant chain could experience any kind of financial trouble. The food is the next best thing next to homemade. However, the chain — which has restaurants primarily on the East Coast and in the Midwest — has had numerous financial issues in recent years.

In 2022, the Colorado Department of Revenue paid a visit to the company’s home office in Golden, Colorado. Seems there was a beef about the $329,000 the company owed in payroll taxes and unpaid sales tax. The following year saw locations in Connecticut and Florida abruptly shut down, though the biggest thorn in the side for the restaurant chain had to be the $11 million the company owed to U.S. Foods. All of these challenges resulted in two failed attempts at bankruptcy due to procedural issues and a downward spiral that took the chain from 300 stores to 27. In all, the chain has faced around 150 lawsuits as a result of unpaid bills as well as accusations of hour and wage violations.

Despite the onslaught of financial woes, the chain has made plans to open a new restaurant location in Buffalo, New York. There’s also some talk about licensing the Boston Market concept to potential store owners around the country. Still, Boston Market’s price for half a rotisserie chicken comes in at nearly three times the amount of a Costco’s roast chicken, which sets you back only around $5, give or take.

Hwy 55 Burgers, Shakes & Fries

When you’re sitting in a slick, retro diner like Hwy 55 Burgers, Shakes & Fries, it’s easy to forget that the outside world exists — and that it sometimes has very significant effects on your burger-and-fries dinner. In Hwy 55’s case, the outside world that encroached was the financial troubles that the restaurant chain’s parent company, Little Mint, Inc. had been having for several years. The most recent bit of financial ickiness was the Chapter 11 bankruptcy Little Mint, Inc. filed in the early part of 2025.

Shortly thereafter, stores in the Southeast, where the chain is located, began closing unexpectedly, though customers did suspect something in the days leading up to some of the closures. In Tullahoma, Tennessee, the restaurant went from full sit-down seating to online and drive-through only to That’s-all-she-wrote-folks. More store closures followed. One restaurant — the Murfreesboro location — had only had its doors open for a few months before it was shuttered.

The bankruptcy came as a result of labor shortages and disruptions caused by the pandemic. It’s a predicament that many fast food chains are still grappling with today, five years later. In all, Little Mint, Inc. had 71 franchise stores and 22 corporate stores. After the dust settles, Hwy 55’s parent company hopes to resume operations and come back stronger than ever. Time will tell if this retro brand of fast food rises again.

Hooters

It wasn’t long after Hooters filed Chapter 11 bankruptcy in April of 2025 that the fast food/fast casual chain started closing restaurants — about three months to be exact. It also took the chain just that long to go from saying it’s “here to stay” (per CNN) to closing down around 30 locations in a handful of states, including Georgia, North and South Carolina, and Texas.

On the surface, the bankruptcy seemed like it would give Hooters a shot at reorganizing its debt. It proposed selling off 100 restaurants owned by Hooters Corporate to a few of the company’s franchisees. As for the closures, the move essentially trimmed the fat and ensured that only the most profitable stores remain open.

It’s just the latest chapter in the history of a food chain that six friends with no restaurant experience opened because they wanted a restaurant “they couldn’t get kicked out of,” according to the company’s bio page. Over the years, there has been a Hooters casino, Hooters Air — yes, airplanes with Hooters servers as flight attendants — and car sponsorship at NASCAR, which ended when the restaurant chain didn’t pay for its commitments to the race. Add rising food and labor costs to shrinking customer wallets, and you have the recipe for a business that’s trying not to crash.

KFC

It’s a sign of the times when a fast food restaurant chain with “Kentucky” in its name moves its headquarters out of its namesake state and into Plano, Texas. As it turns out, that’s just what KFC (Kentucky Fried Chicken) is doing. After three straight quarters of losses in 2024, a move away from home seems like an interesting choice. For those wondering, “Why Texas?” the answer is simple. KFC’s parent corporation, Yum! Brands owns Pizza Hut, and Pizza Hut is in Plano.

There are plenty of challenges to go along with this strategy. At fast food giant, Pizza Hut, sales are down, too. Collaborations between the two brands may not be as fruitful as one might hope. It’s also worth pointing out that, with its big family-style buckets o’ chicken, KFC isn’t exactly the place where single eaters can find fresh fried chicken meals at a good price — not compared to other popular chicken places, anyway.

Still, perhaps the move mixes things up a bit and allows employees from the two brands to cross-pollinate their ideas. KFC needs to turn its finances around, and this may be the only way to do it. It’s a gamble, given that KFC’s competitors are brands like Popeye’s,  which continue to outpace the sales of the 95-year-old company. In 2023, Popeye’s opened around 100 stores in America, and KFC closed about 100. There was also a string of KFC franchisee bankruptcies abroad that saw hundreds of restaurants close down. Given that, a change of corporate venues may not be enough.

Sticky Fingers

It seems like the only thing sticking to Sticky Fingers this year is the financial troubles caused by the COVID-19 pandemic and a downfall in food quality and service. In the first quarter of 2025, Sticky Fingers filed for Chapter 11 in an attempt to make the effects of the pandemic a little less sticky and the company more solvent, per FSR magazine. Truth be told, the company faces an uphill battle. The 33-year-old company had 16 stores prior to 2020. When it filed for bankruptcy, it listed between $1 million and $10 million in debt and $50,000 in assets.

Ironically, right before the pandemic, the company began making improvements, and things looked like they were on the upswing again. Still, there’s hope on the horizon. At the beginning of the 21st century, Sticky Fingers developed a line of grocery store barbecue sauces to sell in about 4,000 locations across the country. While these can’t exactly compare to the succulent barbecue pork ribs, smoked chicken, and pulled pork it’s known for, it may be enough to allow the chain to turn itself around once the shakedown from the bankruptcy stops rumbling.

Hardee’s

Sometimes, the death of a chain restaurant is a death by a million cuts. That seems to be the case with Hardee’s. In 2023, 40 of the chain’s locations closed. Many of them were due to the bankruptcy proceedings of Summit Restaurant Holdings, a large Hardee’s franchisee that filed for Chapter 11. More closings followed in 2024 and 2025.

However, it wasn’t only bankruptcy that caused financial woes for the company. A dispute with one of the company’s big franchisees, Paradigm Investment Group — which owns 70-plus stores — threatened to bubble over in May of 2025. Paradigm Investment Group faced rule violations that included not staying open until 10:00 p.m, as set forth in the franchise agreement. However, Paradigm Investment Group closes some stores at 2:00 p.m. because they don’t have the traffic to justify staying open after the lunch crowd leaves. This points to an ongoing issue with Hardee’s profitability, with many stores making only about $1.2 million a year, per Restaurant Business Online.

Hardee’s is associated with CKE Restaurants, an outfit that owns both Hardee’s and Carl’s Jr., two chains with identical colors and identical menus (thanks to a merger penned in the late ’90s). This put nearly 4,000 stores under CKE’s control. Many of the woes faced by Hardee’s also threaten Carl’s Jr., which will likely, in turn, affect Hardee’s. In 2025, 20 Carl’s Jr. restaurants closed in Australia and one in Texas. However, CKE Restaurants isn’t publicly traded, which means more closures may come, and few will know about them until they happen.

Bar Louie

For Bar Louie — a chain that’s part fast casual, part fast food, with drinks added for good measure — Chapter 11 bankruptcy has been a solution to ongoing financial problems more than once. The gastrobar chain filed for bankruptcy in 2020 and then again in 2025. With between 5,000 and 10,000 creditors, the chain has its work cut out for it if it wants to make good on its goal to keep its restaurants operational during the financial reorganization. The 31 corporate restaurants that will remain open during the Chapter 11 proceedings will operate with business as usual. Restaurants that weren’t making the cut were ousted from the company’s roster before it had even filed for bankruptcy protection.

The company cited a couple of reasons behind why it needed bankruptcy protection for a second time in five years. Customers started shying away from the restaurant due to inflation. Labor costs increased as did food and utility prices. The picture looks very different for the chain today than it did in 2018 when it boasted 130 stores. The company took a downturn during the pandemic, at which time it was sold to BLH TopCo during its 2020 bankruptcy. Despite lowering prices and changing up promotions based on data analysis this time around, the company couldn’t catch a break.

Planet Hollywood

When it was first unveiled, Planet Hollywood was supposed to do for movie nostalgia what the Hard Rock Cafe had done for rock music — make going out to eat a quasi-spendy burger surrounded by museum-quality artifacts from pop culture the epitome of fun. Unfortunately, as with many concept restaurant chains, the time comes for the good thing to end. That happened when Planet Hollywood’s (and sister restaurant, Planet Express) parent company, PB Restaurants LLC, filed for Chapter 11 bankruptcy. It was the chain’s third bankruptcy, the other two being in 1999 and 2001.

During its glory days, Planet Hollywood boasted 60 locations around the world. The numbers now continue to dwindle. Of those, PB Restaurants LLC operated two Planet Hollywood restaurants, plus the Times Square Buffet and Planet Express inside LAX. Both the Planet Hollywood and Planet Express locations went the way of the Dodo. When the news of the bankruptcy broke in the middle of 2025, the parent company had a net worth of negative $46 million.

While Planet Hollywood may be the most recognizable name in the company’s roster, there’s a lot more on the line financially than losing a few fast-casual restaurants decorated with museum artifacts. In all, the Planet Hollywood parent company has nearly 500 business locations across 44 states. Keeping those other properties afloat may prove to be just as difficult as keeping its most famous eateries’ heads above water in the coming days.

Read the original article on Chowhound.