Restaurant Chains Have Closed Over 600 Locations. Here's Who Has Been Affected

In early April, and just weeks after COVID-19 hit U.S. shores, UBS analyst Dennis Geiger predicted that as many as one in five restaurants across the country could close permanently because of the pandemic (via Business Insider). In his note, Geiger pointed out that the scenario of one in five restaurants, or "20 percent is possible considering the health and overleverage of independent owners and select franchisees across casual dining in particular."

By the time Geiger made his prediction, the National Restaurant Association had already said that about 3 percent of restaurants around the U.S. (or about 30,000 dining establishments) had already shuttered because of the coronavirus. If you consider a potential figure of 20 percent, according to Business Insider, that would be equivalent to 200,000 closures in an industry that employs 15.6 million people across the country. 

Now that states have begun to open up, restaurants are finding that reopened dining rooms may not have been the wonder cure to their financial problems after all. Social distancing guidelines have made it impossible for restaurants to fill their tables and generate a profit in the process. "A Friday night, Saturday night, a busy Sunday, you are not going to be able to... produce the same number of bodies, the same amount of sales because of the need to provide some social distance between guests," management consultant John Gordon says (via Food Institute). 

The result: some restaurant chains have already filed for bankruptcy protection and closed all of their outlets, while others are trying to move slowly. However, as restaurant industry analyst Roger Lipton says, coronavirus will change the industry "like 9/11 changed our lives."

"There's going to be a new normal in terms of our lifestyle," Lipton says. "I'm inclined to think that we're not going to be back to so-called normal operations for the foreseeable future."

In the two months since Geiger made his prediction, we have seen about 600 chain restaurants either go out of business or announce the permanent closure of some of its branches. TGI Friday's, for instance, has said it could close up to 20 percent of its 386 restaurants. It's currently experimenting with outdoor seating to see if they might lure their diners back. Other closures include Steak 'n Shake, which will shut 51 restaurants around the country; Denny's, which will close 16 restaurants; Ruby Tuesday's has shut 147 restaurants since late January; and IHOP is to close at least 49 restaurants in Virginia, the Carolinas, and Tennessee (via Business Insider). These restaurants, which many of us grew up around, represent just a fraction of the number of closures we might see before things return to normal.

Garden Fresh, parent company of Southern California buffet restaurant chain Sweet Tomatoes/Souplantation, filed for bankruptcy and became the first buffet restaurant to close as a result of the pandemic thus far. But with the CDC's interim guidelines suggesting that restaurants "avoid offering any self-serve food or drink options, such as buffets, salad bars, and drink stations," Garden Fresh had recognized that finding alternative options for a comeback would have been difficult. Only time will tell if any other buffet restaurants will also follow suit and call it a day.