Why so many restaurants are declaring bankruptcy

In this week’s podcast, restructuring expert Jonathan Tibus talks about what’s causing problems at so many chains.
Photograph: Shutterstock

a deeper dive

It sure seems like a lot of restaurant companies have filed for bankruptcy lately, such as Real Mex, Noon Mediterranean and Ruby’s Diner.

But is it more than normal?

For this question, we spoke with Jonathan Tibus, managing director of Alvarez & Marsal out of Atlanta, and an expert on restructuring struggling companies, in this week’s edition of our podcast, "A Deeper Dive."

Tibus has worked on numerous restaurant bankruptcies, guiding them through the process as a CEO, such as Joe’s Crab Shack owner Ignite Restaurant Group as well as the owner of Champps and Fox & Hound. He has worked with struggling chains such as Quiznos and Max & Erma’s. He is currently the CEO of Real Mex Restaurants, which is being sold out of bankruptcy court.

Tibus will talk about what is driving some companies into bankruptcy, including high rents and heavy debt loads, but also the rising cost of labor, especially in certain states.

Please have a listen.

Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.


Exclusive Content

Emerging Brands

5 pre-emerging restaurant brands ready for takeoff

These small concepts are still proving out their ideas, but each shows promise as a potential candidate for the next generation of emerging chains.


This little-known iPhone feature could change restaurant ordering

Tech Check: Almost every customer has a POS in their pocket. Can mini mobile apps get them to actually use it?


Red Lobster gives private equity another black eye

The Bottom Line: The role a giant sale-leaseback had in the bankruptcy filing of the seafood chain has drawn more criticism of the investment firms' financial engineering. The criticism is well-earned.


More from our partners