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These 13 Restaurants Could Still Go Bankrupt and Close in 2026

Some of their recovery strategies sound more like sabotage.

By Amanda Machado , Edited by Calista Headrick

Updated Sept. 20, 2026

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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.

If you want to stretch your restaurant budget, this 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 this year.

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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 1,000 U.S. restaurants, but its footprint has shrunk considerably in recent years. Long John Silver's had 479 U.S. locations at the end of 2025, and company executives said roughly 110 to 120 restaurants had closed over the preceding three years. And though in 2025, they rebranded their logo by adding a chicken, hoping to lure more customers and get ahead financially, it's usually not 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, TGI Fridays had fewer than 100 U.S. locations by 2025. As of August 2026, the chain had just 76 U.S. locations, down from 269 at the beginning of 2024.

The chain has not announced plans to leave the U.S. market. Instead, TGI Fridays is pursuing an aggressive global expansion strategy, targeting more than 1,000 locations worldwide and $2 billion in annual revenue by 2030.

The remaining 76 American locations have shifted focus to house-made sauces, hand-cut steaks, and other quality changes that they hope will satisfy customers.

Outback Steakhouse

At one point, the Aussie-inspired steakhouse once boasted 754 dining locations, but now in 2026, it's only 659.

In October 2025, parent company Bloomin' Brands announced plans affecting more than 40 Outback Steakhouse locations, including 21 restaurants that closed and another 22 whose leases would not be renewed. The chain had also closed locations in 2024. As of June 2026, Outback has 659 U.S. restaurants

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, with 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.

Under its "JACK on Track" turnaround plan, the company is targeting the closure of underperforming restaurants. Its latest guidance calls for about 50 to 60 closures during fiscal 2026, alongside about 25 openings, leaving approximately 2,100 restaurants at the end of the fiscal year.

Wendy's

Wendy's is closing hundreds of U.S. restaurants in 2026 as part of a turnaround effort. That's not necessarily a good sign for the fast food chain and comes on top of 140 location closures prior to this in an attempt to boost performance and profitability, along with declining U.S. sales and net income.

Interim CEO Ken Cook said it's because these underperforming locations were not elevating the brand. Between shrinking household budgets, lower quality, and higher prices, people just aren't eating fast food as much.

The company closed 289 U.S. locations during the first half of 2026 after announcing plans to shutter roughly 5% to 6% of its U.S. restaurants. Wendy's had 5,724 U.S. locations as of June 28, 2026, and its new CEO, Robert D. "Bob" Wright, has indicated that additional targeted closures are likely.

Noodles & Company

The fast-casual dining restaurant Noodles & Company has been struggling financially and threatened with delisting from Nasdaq twice. But unexpectedly, things might be turning around.

Noodles & Company is shrinking its restaurant footprint in 2026, but the chain's sales have been improving. The company closed 27 restaurants during the first half of 2026 and expects to close roughly 35 to 40 locations for the full year. At the same time, second-quarter comparable sales jumped 10.3%, and the company raised its full-year 2026 financial outlook. Their future is uncertain, but surprisingly hopeful at this point.

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Starbucks

In September of last year, the coffee giant Starbucks announced 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.

Starbucks has closed hundreds of underperforming stores as part of its "Back to Starbucks" turnaround plan, but the chain is also opening new locations. In the third quarter of fiscal 2026, U.S. comparable-store sales rose 7.9%, marking the fourth consecutive quarter of comparable-sales growth. Starbucks plans to open up to 175 new U.S. stores in 2026 while continuing to close or relocate underperforming locations.

Denny's

Denny's has been shrinking its restaurant footprint as it works to improve its business. The diner chain announced plans in 2025 to close 70 to 90 restaurants, following 88 closures in 2024 as it focused on eliminating lower-volume locations. Same-restaurant sales at its domestic locations fell 2.9% in the third quarter of 2025 compared with the year before.

In January 2026, Denny's Corporation was acquired by TriArtisan Capital Advisors, Treville Capital Group, and Yadav Enterprises, taking the company private and ending its Nasdaq listing. The chain has not announced plans to leave the U.S. market, but its restaurant footprint continues to shrink as it closes lower-volume locations and adjusts its strategy under private ownership.

Hardee's

Hardee's has faced a rough stretch, with major franchisee bankruptcies and a shrinking restaurant base. ARC Burger closed 77 Hardee's locations in December 2025 before filing for Chapter 7 bankruptcy in April 2026. Hardee's has since reopened some of those restaurants as company-owned locations and plans to bring back more than 40.

The chain is still dealing with franchisee troubles. Superior Star, which operates Hardee's restaurants in the Midwest, filed for Chapter 11 in July 2026 after closing or losing the franchise agreements for 32 locations in 2025. Hardee's had 1,485 U.S. restaurants at the end of fiscal 2026, down from 1,754 at the start of fiscal 2023.

Still, there is no indication Hardee's is preparing to shut down. The brand continues to launch new menu offerings, reopen restaurants, and invest in marketing and partnerships. Because parent company CKE Restaurants is privately held, current chainwide sales figures aren't publicly available. For now, Hardee's appears focused on rebuilding its footprint and strengthening the brand while working through its franchisee problems.

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Boston Market

Boston Market still exists, but the once-massive rotisserie chicken chain has been reduced to only six restaurants. After operating nearly 400 locations before the pandemic, and more than 1,000 at its peak, the chain has only a handful of locations remaining as of August 2026. The company continues to face lawsuits and financial challenges.

Smokey Bones

FAT Brands filed for Chapter 11 bankruptcy in January 2026, and all remaining Smokey Bones locations have since closed.

On the Border

The Tex-Mex chain On the Border filed for Chapter 11 bankruptcy in March 2025 after closing 40 restaurants and citing a "severe liquidity crisis" tied to rising food, labor, and occupancy costs. At the time, it had 60 company-owned locations and 20 franchised restaurants.

Pappas Restaurants acquired On the Border out of bankruptcy in May 2025, but the turnaround didn't last. In June 2026, the company closed all of its remaining company-owned U.S. restaurants, leaving just a handful of franchised locations. Current reports put the U.S. footprint at about five restaurants, with additional locations operating internationally.

The closures leave On the Border a fraction of the chain it once was, and its future remains uncertain as its new owner evaluates what comes next for the brand.

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Bar Louie

Bar Louie has 39 locations remaining in 2026 after emerging from bankruptcy under new ownership.

Having survived two bankruptcies in less than five years, the gastrobar chain is now a fraction of its former size. After filing for Chapter 11 again in March 2025, Bar Louie was acquired out of bankruptcy by Sun Holdings, which took over its 39 remaining locations in October 2025.

The bankruptcy filing showed just $1 million to $10 million in assets against $50 million to $100 million in liabilities. Bar Louie remains in business under Sun Holdings, which currently lists 39 locations, but the chain has closed nearly 100 restaurants since 2020.

Bottom line

Restaurant bankruptcies have been sending shockwaves through the news in recent years, but 2025 saw a dramatic uptick that continued on through 2026. Consumers are struggling to keep food on the table and are using every trick, tip, shopping hack, and the best 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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