In rough economic times, even fast-food chains are not exempt from hardship as diners try to stretch their food budgets . Many of these establishments closed their doors in 2023, a trend that has persisted this year.
After all, rising costs are squeezing profit margins, and inflation continues to make financial stability difficult to achieve, even for the most well-known quick-serve chains.
As TheStreet recently pointed out, the fall of a once-popular brand often happens gradually. Howard Johnson's was a staple for road trips along the East Coast but dwindled over the years until its final location closed in 2022, while Sears, once a retail giant in the U.S. (and source of kid’s Christmas lists everywhere), suffered a slow decline due to decades of mismanagement and failed turnaround attempts.
Now, it’s Boston Market that’s a brand on the brink. Once boasting over 1,000 locations and owned by McDonald's, the chain has faced a series of ownership changes, financial troubles, and lawsuits.
Currently, Boston Market is entangled in a web of debt and legal battles, with its future uncertain as multiple creditors vie for its remaining assets.
The challenges Boston Market and other struggling fast-food chains face highlight the industry's precariousness. As they navigate financial difficulties and shifting consumer preferences, these brands must adapt or risk disappearing entirely.
Here's a closer look at some fast-food chains that might be downsizing or vanishing in the coming months.
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1. Boston Market
Boston Market has been plagued by lawsuits, unpaid bills, and closed restaurants for some time. The chain’s owner, Jay Pandya, has filed for personal bankruptcy twice.
Boston Market had 300 locations at the beginning of 2023. But last year, it closed many locations due to evictions for unpaid bills and government shutdowns for unpaid sales taxes.
As of right now, there are just 65 operating Boston Market restaurants: five in Massachusetts, seven in Pennsylvania, one in Michigan, two in Ohio, three in Connecticut, 11 in New Jersey, seven in Florida, three in Illinois, four in Texas, two in Maryland, two in Delaware, 12 in New York, one in Indiana, one in Indiana, two in Virginia, and two in California.
Unless this company experiences a serious turnaround, 2024 might be the end for Boston Market.
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2. Hardee’s
Summit Restaurant Holdings, a major franchisee of Hardee’s restaurants, filed Chapter 11 bankruptcy after closing 39 restaurants in 2023.
The spree of closures has continued into 2024, with several Illinois locations closing in January. We will find out whether this is the end of Hardee’s troubles.
3. Burger King
Burger King closed hundreds of stores in 2023. The high number of closures was linked to three different franchisees filing for bankruptcy and many more shuttering unprofitable stores.
However, executives hope this sad chapter in the company's history is behind them. Burger King is reinvesting in more marketing and remodeling stores to the tune of $400 million.
Hopefully, the restaurant chain's rate of closures will slow in 2024, but only time will tell.
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4. Krystal
Krystal has been in trouble for some time. The burger chain filed for bankruptcy in 2020. Fortress Investment Group then acquired Krystal and brought it under the SPB Hospitality umbrella.
By the end of 2022, the number of Krystal restaurants had decreased by 21% over the previous five years.
The plan now is to sell corporately owned stores to multi-unit franchise operators and expand Krystal’s footprint. Jack in the Box is using a similar strategy.
5. White Castle
As one of the oldest American burger chains, you might expect White Castle to avoid the woes of newer establishments. But when you get sued for biometric privacy law violations, you’re bound to run into trouble — no matter how good the food is.
White Castle faces a judgment of a staggering $17 billion for scanning employees’ fingerprints without consent. Media reports have speculated that a ruling of this magnitude could jeopardize the long-standing restaurant’s future.
6. Steak ‘n’ Shake
In 2018, Steak ‘n’ Shake had 626 locations. That number dwindled to less than 500 as of 2023. This unnerving trend has continued despite increasing sales.
In 2021, Biglari Holdings stepped in just in time to prevent Steak ‘n’ Shake from filing for bankruptcy. The investment group overhauled the brand, switching it from family dining to a counter-serve and drive-thru restaurant.
However, the overhaul slowed down in 2023, with just two restaurants undergoing such a conversion. That change has Steak ‘n’ Shake fans nervous about what the upcoming year will bring.
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7. Bagger Dave’s
Bagger Dave's Burger Tavern has been closing locations since 2015. This company doesn't have the presence of McDonald's or Wendy's, but at one time, it had 26 stores across Michigan, Indiana, and Ohio.
Now, that number is down to six.
In a press release, BT Brands — which owns a 40% stake in the company — announced it would convert the existing restaurants into new concepts later in 2024. The Bagger Dave's as we knew it may be gone for good.
Bottom line
Reduced traffic and sales, higher prices, and customers decreasing what they spend on fast food all spell trouble for the fast-food industry in 2024.
The good news is that there are still plenty of thriving chains and local restaurants to enjoy if you want to go out to eat more . Still, nobody likes to see their favorite restaurant disappear.
Money tips that can work for everyone
No matter what your bank account balance is, there's always an opportunity to optimize and improve your finances. Here's a quick checklist of things you can look at today.
Focus on paying off your debt . Debt can hold you back from making progress with your overall financial well-being. Aside from cutting expenses, there are tools that can help you pay off debt faster like balance transfer credit cards and debt counseling.
Earning extra income can give you breathing room. If finances are tight, earning some extra money to supplement your income can make a huge difference. A new job is one option to consider, but if you're not ready to make a big change or already retired, a part-time side job could be a better choice.
Cut your expenses. It sounds painful and so not fun, but it doesn't have to be. Take a look at your biggest expenses because that's where you'll probably find the biggest savings. For example, auto insurance rates have been soaring so shopping around for a new insurance company can be the fastest way to cut your bill. Also, look for ways to cut your grocery bill (despite rising inflation).
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