Financing

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.

Multimedia

Exclusive Content

Topics

How the shift to counter service has changed Steak n Shake's profitability

The Bottom Line: Sardar Biglari, chairman of the chain’s owner Biglari Holdings, details how the addition of kiosks and counter service has transformed restaurants.

Food

Grand Geneva Resort & Spa's 'Ouisconsin' croissants reflect the state's French legacy

Behind the Menu: Hyper-local Wisconsin ingredients and a three-day baking process turn out pastries that are in high demand by hotel guests.

Financing

Reaction to Wendy's dynamic pricing test reveals its risks

The Bottom Line: The burger chain mentioned last week that it would test the pricing strategy sometime next year. Consumers frustrated with prices reacted swiftly.

Trending

More from our partners