The Restaurant Industry May See Many More Bankruptcies As Winter Hits

As the U.S. braces for winter and flu season, COVID cases have again spiked around the country, and with them rises the spectre of another round of mass restaurant closures.

Beloved national chains including Ruby Tuesday’s, Sizzler, California Pizza Kitchen and Chuck E. Cheese parent CEC Entertainment have already shuttered during the lockdowns. Smaller restaurants have also increasingly disappeared as dining rooms stay dark and federal relief funding runs dry.

QSRMagazine put together an article citing a number of industry reports that paints a grim picture of the restaurant business’ future.

The publication describes a research paper as saying that “growing debt, and the deterioration in operating performance required to service it, has forced heightened levels of investor and debt-holder concern and oversight in an industry which, pre-virus, was enjoying growth and foot traffic at near-historic levels.”

Franchise businesses have typically been more resistant to economic downturns due to their consolidated corporate leadership. QSRMagazine speculates that restaurant mergers and acquisitions may boom as stores around the country struggle to stay open.

The recent merger between Dunkin’ and Inspire Brands shows that no matter the size, players in the restaurant business are rethinking their business structures.