Corporate bankruptcy filings increased significantly during the first months of the pandemic, according to a 2020 study from Harvard Business School. Between January 1 and August 31, filings with assets valued at $50 million or more shot up nearly 200% on a one-year basis.
While those figures might not sound surprising, it’s worth noting that filings did not increase at the same rate among small businesses. In fact, bankruptcies for small businesses actually decreased in the first months of the pandemic.
The Harvard study confirmed the “very different role” that bankruptcy plays for large corporations as compared to individual consumers and small firms. While corporations are adept at using bankruptcy as a source of debt protection, smaller businesses are more likely to refrain from filing, and to view bankruptcy as “a last resort.”
With that difference in approach and attitude in mind, here’s a look at six restaurant chains making the biggest post-bankruptcy comebacks in recent years.
After 14 long years, Steak and Ale is ready for a comeback. The beloved chain closed the doors of its final location in 2008 as part of a Chapter 7 bankruptcy filing, and fans lost all hope they would ever again be able to enjoy its dimly lit atmosphere and reasonably priced cuts of prime meat. But the chain’s luck seems to be turning.
Legendary Restaurant Brands, the company that acquired Steak and Ale in 2015, has recently announced a major comeback with a deal that will open 15 new steakhouses under that brand in the United States. The restaurant revival is set to begin later this year, with the first opening in Burnsville, Minn., and other locations to follow in Oklahoma, North Dakota, South Dakota, Nebraska, Missouri, and Kansas.
“The evolution of the affordable steakhouse category is ready for the reintroduction,” said Paul Mangiamele, the chairman and CEO of the company.
This Texas-based pizza chain had already begun to decline before the pandemic with systemwide sales dropping from $443.3 million to $393.9 million—a decline of about 10%—from 2017 through 2019. The pandemic led to a net loss of $2.7 million dollars in 2020 and the chain filed for bankruptcy in Jan. 2021 and was acquired by D&G Investors, a group associated with Applebee’s operator SSCP Management.
At the end of Oct. 2022, the chain announced a boost in customer interest in the brand and credited its increasing sales to the new game rooms implemented at numerous locations. The revamped, modernized game rooms have gone from contributing about 1% of the revenue to 10% to 20%. Company president Jeff Hetsel, called the effort a “game changer.”
California Pizza Kitchen was hit hard by the pandemic: dine-in sales at the chain dropped a precipitous 77% in the last week of March 2020, and by the end of the year the chain had lost more than a tenth of its store count. When CPK declared bankruptcy in July 2020, it was $403 million in debt.
Not long after the filing though, a debt-for-equity deal was secured, decreasing the overall debt load by $220 million. With its finances in better shape—and with a major menu upgrade—business at the chain has rebounded in the past two years.
In 2021, annual sales climbed back to $490 million. And in 2022, CPK signed two new international development agreements that include expansions in Costa Rica, Chile, Canada, and India.
Buffet chains were particularly hard-hit by the pandemic, and Golden Corral was no exception. Sales plummeted over 60% in 2020, and in the year following, the beloved chain closed a quarter of all locations.
It also saw two of its largest franchisees go bankrupt: Orlando-based Operator 1069 Restaurant Group filed for Chapter 11 debt protection in late 2020, followed soon after by Platinum Corral, which declared bankruptcy in April of 2021. Between them, the operators accounted for over 12% of the Golden Corral footprint.
Two years later, however, Golden Corral’s store count appears to have finally bottomed out—at about 360 units—and the chain is showing signs of recovery. Operating on a significantly reduced footprint, revenue climbed back to above $1 billion in 2021 and in 2022 comparable sales are currently up 30%.
This year, Golden Corral celebrates 50 years in business, with plans to invest in off-premise formats, such as drive-thrus.
The steakhouse chain’s parent company, CraftWorks Holdings, declared bankruptcy in March of 2020, furloughing almost all of its 18 thousand employees.
Not long after, however, Nashville-based restaurant group SPB Hospitality acquired the CraftWorks portfolio for $93 million.
Logan’s Roadhouse has so far thrived under the new leadership: SPB has winnowed Logan’s footprint down to a lean 146 restaurants and has succeeded in restoring sales. Following a decline of nearly 50% in 2020, annual sales bounced back in 2021 to $417 million. The steakhouse continues to re-open locations that suffered at the peak of bankruptcy.
Friendly’s has declared bankruptcy twice in the past twelve years—once in 2011, and then again in 2020. Sales at the family dining chain plummeted 40% during the pandemic, and store closures totaled nearly a fifth of the overall footprint.
But in the past few years, Friendly’s has started making a comeback. Following an acquisition by Amici Partners Group, sales picked back up in 2021 and the restaurant closures finally slowed. That being said, the store count has bottomed out to 125 while the chain had over 800 locations nearly 3o years ago.
Since moving out of bankruptcy, the chain has further developed its mobile app—where customers can join the Sweet Rewards Club—and expanded its digital marketing, in addition to the new fast-casual prototype called Friendly’s Cafe, which has counter service and QR-code ordering-payment to increase off-premise sales.
A version of this story was originally published on November 12, 2022. It has been updated to include new information.