One of the earliest lessons I learned about the restaurant industry was just how tough it was to kill a restaurant chain. Someone is always willing to take a chance on a brand. When a concept has financial problems, it seeks a buyer and unloads the concept. It may unload that concept for pennies on the dollar, but the brand still survives because restaurants generate a lot of cash, and there’s value in an existing brand.
And yet, in late September, we saw the complete shutdown of two restaurant chains: Opa! Authentic Greek Cuisine and Iron Hill Brewery. Opa! immediately filed for Chapter 7 liquidation. Iron Hill did the same over the weekend.
In its filing, Iron Hill cited its financial condition and liquidity constraints. “The likelihood of achieving near-term liquidity and consummating a going-concern transaction … is increasingly uncertain,” the company said. Those liquidity constraints “are significantly curtailing” its ability to “make critical payments to vendors and continue operating as a going concern.”
In short, Iron Hill decided that its creditors were better off if the assets were sold in pieces rather than trying to find some sort of buyer.
But this may be a new reality. The simple fact is, the business in 2025 is as difficult as it’s ever been. There are probably too many restaurants to justify current demand. The population isn’t growing. Costs remain high. The value of a brand just isn’t what it used to be.
To illustrate the strangeness of the current market, consider the brand Hot Chicken Takeover. The brand collector Craveworthy Brands bought that chain for 50 cents—50 cents!—and still couldn’t make it work, ultimately shutting it down.
Franchised brands like Tropical Smoothie and Jersey Mike’s have been getting strong multiples in mergers and acquisitions. But that masks the real challenge in the market. Buyers simply are unwilling to take on actual restaurants, with a few exceptions. That’s made it tougher to get deals done.
The result has been a string of bankruptcy filings from a wide variety of restaurant chains. In many cases, they’ve been taken over by lenders or opportunistic investment firms that buy the debt on the secondary market and then use their status as lender to buy the company outright.
Not every chain even has that option. Some can’t find financing or buyers willing to take a chance on a turnaround. As a result, shutdowns of well-established restaurant chains are far more common than they used to be.
Juxtapose that with an alternative trend in which entrepreneurs buy up sometimes-decades-old intellectual property and restart a concept that hasn’t been around for years. It’s fascinating to watch a scenario in which someone will make a big bet on a dead brand like Chi-Chi’s but nobody will take a chance on a struggling concept such as Iron Hill.
We can’t necessarily blame anybody for avoiding a struggling restaurant chain, particularly in this difficult market. Consumer confidence remains weak. The labor market is also weak. The federal government can’t get its act together to operate and employ people. Few struggling chains actually achieve a turnaround.
But we also get the sense that this is a shift in industry thinking. A number of restaurant chains have completely shut down since the pandemic, notably buffet brands like Old Country Buffet. Smaller chains are now making Chapter 7 a more common reality. It’s apparently a lot easier to kill a restaurant chain than it was 20 years ago.