33 restaurant chains closed 10% or more of their locations in 2025

While big chains like Denny's, Hooters, Red Lobster, and TGI Friday's commanded the headlines, 33 chains closed 10% or more of their locations in 2025, according to Technomic data shared with Nation's Restaurant News (NRN).

That's less than the 75 that closed more than 10% during 2020, but if you factor out that pandemic-impacted year, it's the second highest number of chains closing that number since 2019.

And, while the economy has been a factor, many of the shutdowns trace back to the pandemic.

"The root of some of these issues stem from the Covid pandemic more than five years ago, when many companies took on debt to stay afloat - debt that has since become far more expensive. Even as things stabilized a bit, more challenges were presented due to a perfect storm of rising costs and retreating consumers," NRN reported.

Some of the chains that made the list cut underperforming locations and improved their overall operations, some continued to close locations in 2026, while one, On the Border, closed all its locations and filed for Chapter 7 bankruptcy to liquidate the brand.

Why are restaurants struggling?

While Covid debt and the economy are factors, the sheer number of restaurants also plays a role.

"The restaurant space has been tough. There's a lot of competition, so it's a very saturated market to begin with," Victor Fernandez, chief insights officer at Black Box Intelligence told Restaurant Dive.

U.S. restaurant locations hit an all-time high of over 860,000 as of November 2025. Still, both openings and closures slowed consistently throughout 2025, Huy Do, market researcher and trendologist at Datassential, said during a March 12 webinar.

"The good part is that the U.S. restaurant industry has been growing," Do said. "But the pace of growth has been slower and slower every month."

Americans have also been trading down and opting for cheaper meals.

Nine percent of the full-service restaurants Black Box tracked lost 30% or more of their peak sales between 2019 and 2025. In limited service, that figure was just 4%, according to Restaurant Dive.

Americans do still eat out

While Americans still regularly eat meals outside the home, they have made some changes to their spending, according to the National Restaurant Association's (NRA) Q2 2026 Quarterly Consumer Insights Survey.

• Restaurants remain a priority: 56% of consumers dined out at a restaurant in the past week, reinforcing restaurants as the top discretionary spending category.
• Consumers are pulling back on restaurant spending: 36% report spending less at restaurants than last quarter, with younger consumers leading the decline.
• Value-driven behavior is increasing: More consumers are trading down - ordering fewer add-ons and choosing less expensive options when dining out.

"The pullback was most pronounced among younger consumers, with 45% of Generation Z reporting reduced spending. Baby Boomers reported the smallest decline, at 32%. Across all generations, the share of consumers reducing restaurant spending exceeded those increasing it. Overall, 24% reported spending more, while 40% indicated that their spending was largely unchanged," NRA data showed.

These chains closed 20% or more of their restaurants in 2025

NRN noted that while these numbers may seem large, the restaurant industry has always experienced high turnover.

"It's easy to forget, but restaurants were having challenges before the pandemic. The industry was experiencing weak traffic in 2018 because it was simply too full. The space, fueled by hungry investors and the rapid emergence of the fast-casual category, overcorrected and oversaturated after downsizing during the Great Recession," the website reported.

The pandemic shook out some weaker players, and accelerated some closures, but restaurants remain dependent upon consumers having money to spend. Tough economic conditions have led to people spending less and looking for discounts, which cut into already low margins.

Chains that relied on higher check averages or struggled to differentiate themselves were especially vulnerable as diners became more price-conscious.

Not every chain has been affected equally, but those challenges have forced many established brands to close large numbers of locations.

That contributed to a number of chains closing 20% or more of their locations.

• Pinstripes: 61.1%
• Salad and Go: 52.1%
• On the Border: 41.8%
• Bar Louie: 35%
• TGI Fridays: 31.7%
• PDQ Chicken: 31%
• Brio Italian Grill: 29%
• Pieology Pizzeria: 21.7%
• Uno Pizzeria Grill: 20.8%
• Maple Street Biscuit Company: 20.6%
• Johnny Rockets: 20%
  
  Source: Technomic Top 500

Circana's 39th annual report, "Eating Patterns in America," highlights a growing trend toward at-home dining over the past year, with 86% of eating occasions sourced from home.

"Despite easing inflation, consumers continue to face the cumulative impact of several years of rising prices and ongoing economic challenges," said David Portalatin, senior vice president and industry advisor, Food and Foodservice, Circana. "With dining out costing four times more than eating at home, many are cutting back on restaurant visits. Meal patterns have shifted as consumers spend more time at home and adapt to new daily rhythms."

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This story was originally published June 29, 2026 at 11:42 AM.