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These 13 Restaurants Are Most Likely To Go Bankrupt and Close in 2026

Some of their recovery strategies sound more like sabotage.

By Cassandra Yorgey

Edited by Calista Headrick

Updated Jan. 13, 2026

Consumers spent all of 2025 shouting about the affordability of products and services, but prices have continued to rise. That means folks have to make hard choices about when and where they can afford to go out to eat.

Stretching your restaurant budget can only go so far, and this change in spending behavior is having an impact. See which restaurants are most likely to go bankrupt or close in 2026.

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Long John Silver's

Fast food fish seems less like a snack and more like a gamble on gastrointestinal distress, so it's not surprising that Americans are passing on Long John Silver's.

The chain once had over 1,500 stores, but they've shuttered over 150 locations in the past three years, and their total location count is down to under 500 restaurants. And though in 2025, they rebranded their logo by adding a chicken, hoping to lure more customers, it's not always a good sign when a company has to pivot away from a keystone of their brand.

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TGI Fridays

The casual dining chain known for early adoption of "Ladies' Night" filed for bankruptcy at the end of 2024 because of capital structure failures. After massive store closures, by 2025, there were fewer than 100 TGI Fridays locations left in the U.S.

The Happy Hour hotspot may not have long left in America, and while the chain hasn't specifically stated they will exit the U.S. market, they are planning to expand to 1,000 locations globally.

The remaining 79 American locations have shifted focus to house-made sauces, hand-cut steaks, and other quality changes that they hope will satisfy customers. At this rate, 2026 might be your last chance to enjoy TGI Fridays dining without traveling internationally.

Outback Steakhouse

At one point, the Aussie-inspired steakhouse once boasted 750 dining locations, but by the end of 2025, that number was decreasing. In October 2025, parent company Bloomin' Brands announced over 40 restaurants would be closing, about half by way of lease expirations, and locations also closed in 2024. According to Outback's website, there are now less than 670 locations open.

The company has a "comprehensive turnaround strategy" focusing on Outback Steakhouse to address financial struggles, but customers aren't so sure about the future of the chain, many believing they are out of touch with the average American experience.

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Jack in the Box

This burger chain is focused on surviving after a failed Del Taco acquisition that caused over $400 million in losses. They've dubbed their recovery strategy "Jack on Track," and it includes closing up to 200 locations and discontinuing dividend payments to shareholders.

Jack in the Box ended 2025 with $1.7 billion in debt, along with one of the highest debt-to-cash ratios in the industry. If this is your go-to fast food, 2026 might be your last chance to enjoy it.

Wendy's

At the end of 2025, Wendy's announced they will be closing hundreds of restaurant locations through 2026. That's not necessarily a good sign for the fast food chain and comes on top of 140 locations closures prior to this in an attempt to boost performance and profitability, along with declining U.S. sales and net income.

CEO Ken Cook says it's because these underperforming locations were not elevating the brand, but some expect more closings to come. Between shrinking household budgets, lower quality, and higher prices, people just aren't eating fast food as much.

Noodles & Company

The fast-casual dining restaurant Noodles & Company has been struggling financially amid declining revenue and plans to close between 12 and 17 locations through 2026, on top of additional closures in 2025.

Noodles & Company has attempted a turnaround by revamping its menu and raising some prices, which resulted in a temporary sales increase but an overall loss in traffic. They've also been threatened with delisting from Nasdaq twice. This might be the chain's last hurrah.

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Starbucks

The coffee giant Starbucks ended 2025 by announcing a $1 billion restructuring plan that included closing hundreds of locations, laying off approximately 900 non-retail employees, and implementing a return-to-office mandate for operations employees.

Though there are plans to expand the number of locations in 2026, the company's same-store sales previously declined for six quarters in a row, which isn't surprising considering consumers are trying to lower spending and that overpriced cup of coffee to-go is easy to cut from budgets.

Spending a billion dollars to close locations while coffee prices are continuing to trend upward might be a nail in Starbucks' coffin.

Denny's

In February, the dining chain Denny's announced plans to close 70 to 90 locations in 2025, on top of 2024 closures, and then sold itself to a private equity company, among others. That hasn't gone well for restaurants such as Red Lobster. Additionally, it has been reported that sales at Denny's locations open at least a year were down nearly 2.9% by Q3 of 2025. The diner-like chain might be on its way out in 2026.

Hardee's

The southern fast food restaurant Hardee's might just be the next victim of private equity investments. ARC Burger acquired 80 Hardees locations in 2023 as part of the former operator's bankruptcy filing, but the franchisee is owned by the same private equity firm that owns Church's Chicken and Quiznos — and amid store closures, they are alleged to owe Hardees over $6.5 million in unpaid royalties, marketing, and rent.

That's not the only legal battle, either, as another franchisee is being sued for refusing to accept digital orders or remain open after 2 p.m. Combined with declining sales, this could be the beginning of the end for Hardee's.

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Boston Market

It might already be too late to grab that one last rotisserie chicken. Although the website does not appear to have kept up to date with closures, Boston Market only has about 15 locations left. There were once over 1,200 locations.

Owner Jay Pandya has attempted to file for bankruptcy repeatedly since 2020 and was even banned in 2024 from filing again for at least six months. Since 2022, 95% of locations have been shuttered. If you can still find one, grab a farewell rotisserie because between lawsuits and unpaid bills, the homestyle chain is unlikely to survive 2026.

Smokey Bones

While Smokey Bones hasn't filed for bankruptcy, its parent company, Twin Hospitality, previously announced at the end of 2025 that 15 locations would shutter and another 19 would be converted into Twin Peaks. That leaves just 26 struggling locations.

Though profitable, considering the menu is highly focused on entrees such as steak and brisket, which have faced steep price increases, this year could be the end of Smokey Bones.

On the Border

The Tex-Mex chain On the Border filed for Chapter 11 bankruptcy in 2025, following the closure of 40 locations deemed a financial burden. They cited many of the same struggles as other restaurants, including high lease costs, labor costs, and food prices.

The bankruptcy filing cited a "severe liquidity crisis," so if you love this chain, you might want to stop by one of the remaining 60 locations in case they disappear completely.

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Bar Louie

The gastrobar chain Bar Louie first filed for bankruptcy in 2020 and then again in 2025. They are down to around 40 remaining locations, which were lifted out of bankruptcy by Sun Holdings, but the financials still don't look good for Bar Louie.

The most recent filings claim to have under $10 million in assets while owing debts over $50 million and possibly as high as $100 million.

Bottom line

Restaurant bankruptcies have been sending shockwaves through the news in recent years, but 2025 saw a dramatic uptick that doesn't bode well for dining out in 2026. Consumers are struggling to keep food on the table and are using every trick, tip, shopping hack, and great cash back credit cards to cover the ever-rising cost of groceries. That can leave dining out in restaurants as a special treat instead of a weekly staple.

Unfortunately, many restaurant CEOs are failing to recognize this fundamental problem and instead think updated decor and logos will miraculously save them. Spoiler alert: It won't.

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