Razzoo’s Cajun Cafe has filed for Chapter 11 bankruptcy after closing three underperforming restaurants in recent weeks.
The 20-unit, Addison, Texas-based casual-dining chain said weaker consumer spending, rising demand for convenience and delivery and heavy discounting from competitors have hurt sales, making it harder for the chain to pay rent and service its debt.
A bankruptcy filing in the Southern District of Texas this week listed Razzoo's assets and liabilities of between $10 million and $50 million.
Razzoo’s was founded in 1991 in Dallas. With a unique menu of Cajun cuisine like alligator, oysters and po'boys and a lively atmosphere, it became a hit with customers and began opening more locations. It reached 14 units by 2001 and expanded to North Carolina and Oklahoma.
As of earlier this year, Razzoo’s had 24 restaurants, but closed three weaker stores in Texas and Oklahoma last month as it looked to ease its rent burden. In the filing, it said it could consider closing additional locations to further “right-size” the business. But it also believes the brand is in a position to continue expanding throughout the Southeast in the future.
Razzoo’s said a number of factors have been weighing on its sales and cash flow. Like other recent restaurant bankruptcies, it blamed inflation and economic uncertainty for slower consumer spending. It also noted that COVID-19 caused customers to shift toward delivery and takeout, which has apparently hurt the largely on-premise concept.
Notably, Razzoo’s also said heavy discounting from competitors like Chili’s and Applebee’s has siphoned off some of its traffic. Many casual-dining chains have been investing in value to appeal to price-conscious consumers, and that strategy has generally been successful.
Razzoo’s also cited a weaker crawfish season, which tends to be its busiest time of year. Higher competition for crawfish drove retail prices down this year, and it saw lower sales as a result.
The sales declines have hampered Razzoo’s ability to pay rent and debt. Prior to the three closures, its rent costs were about $650,000 per month. It also owes $9.7 million in secured debt and about $3.1 million in unsecured debt.
Total systemwide sales in 2024 were $76.6 million, according to the bankruptcy filing.
Razzoo’s is the latest in a recent flurry of bankruptcies in the casual-dining sector. At least six chains have filed for bankruptcy in the past month alone, including Opa! Authentic Greek, Iron Hill Brewery, Bravo Brio Restaurants, Abuelo’s and Pinstripes.
It continues a wave of restaurant bankruptcies that is now in its second year.
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