Once-Popular Chain Restaurants That Have Filed For Bankruptcy In 2025

Several chain restaurants experienced bankruptcy scares in 2024, including Red Lobster, Sticky's Finger Joint, and Rubio's Coastal Grill. This year is also shaping up to be a bad one for restaurants, as many consumers find themselves dining out less than before due to an increasingly troubling financial climate. There's also the matter of rising food costs, which impact businesses as well as consumers. These and other factors have likely contributed to the spate of bankruptcies taking place in 2025, which sadly includes some beloved dining establishments.

So far this year, Hooters, On the Border, and Bar Louie have all filed for bankruptcy, and all three establishments cited a volatile economic environment as a key reason. However, these restaurants have also struggled in the past, which indicates that their financial woes have been a long time coming.

For instance, this is Bar Louie's second bankruptcy filing, with the first taking place in 2020, while the number of On the Border locations throughout the U.S. has been steadily dwindling over the last few years. Many restaurants have bounced back from bankruptcy before, but these establishments undoubtedly have a long road ahead.

We previously brought you some signs that Hooters might not be around much longer, including frequent ownership exchanges and numerous store closures. These days, the outlook appears even grimmer for the controversial chain based on its recent bankruptcy filing. Hooters' Chapter 11 reorganization plan entails selling off 100 locations, though they will go to existing franchisees. The once-popular restaurant has experienced numerous obstacles over the years, including discrimination lawsuits.

Hooters founder and CEO of Hooters Inc. (one of the franchisee groups that purchased the for-sale locations) Neil Kiefer attributed the brand's decline to its handling by inexperienced entities. As reported by CNN Business, Kiefer stated, "For many years now, the Hooters brand has been owned by private equity firms and other groups with no history or experience with the Hooters brand." However, there's likely more to Hooters' demise than just mismanagement.

Of all the restaurants struggling in 2025, Hooters might have the most going against it. At best, the concept can be considered dated and hokey, and at worst, Hooters upholds harmful, sexist attitudes and beliefs. The chain's downturn can also be attributed to evolving consumer tastes, as casual restaurants serving standard fare like burgers and wings are generally on the decline.

On the Border first opened its doors to Dallas, Texas diners in 1982 and eventually expanded to locations all over the country. Recently, the Tex-Mex chain has fallen on some tough times and ultimately decided that filing for Chapter 11 bankruptcy was the best way to handle its debt, which has grown to $25 million.

Additionally, the chain shuttered 77 locations in March 2025 due to concerns that these flagging restaurants would only worsen financial losses. It's also requesting that the bankruptcy court forgive the existing leases linked to these restaurants to ease the company's financial burden.

At a time when Tex-Mex fare is quite popular at restaurants like Chipotle, Taco Bell, and Del Taco, On the Border's struggles seem perplexing. The chain was re-branded in 2021, which entailed implementing a new mobile app and updated website, as well as enhancing its reward system. These efforts proved largely futile, however, and sales continued to decline at On the Border even as similar restaurants experienced growth. Based on these factors, it may take a miracle for On the Border to get back on its feet again.

Bar Louie prides itself on providing its customers with a gastropub experience, meaning it offers the full sit-down restaurant experience along with a good selection of alcoholic beverages. The chain even considers itself the progenitor of the U.S. gastropub, a dining category that also includes establishments like Yard House and BJ's Restaurant & Brewhouse.

Despite the timelessness of that particular dining concept, this is Bar Louie's second go-round with bankruptcy, as the chain filed for Chapter 11 in March 2025 (following the first instance in 2020) and closed locations throughout nine states. However, the restaurant claims that these closures are strategic, as they'll help improve the financial outlook for the locations that are performing well.

Like many dining establishments these days, Bar Louie highlights changing consumer habits and increasing costs as reasons for its filing. However, the restaurant emphasizes that the remaining locations will continue to operate as expected during the bankruptcy proceeding. For our money, Bar Louie's massive menu could be one reason for its waning popularity, which is why we included it in our ranking of restaurant chains that have too many menu options.