Beloved Chain Restaurants That Are Making a Comeback After Filing for Bankruptcy

Many restaurants have faced tough times due to changing consumer habits, rising costs, and the impact of global events. Some, including the iconic Red Lobster, have been forced to seek bankruptcy protection (also known as Chapter 11) but are now trying to claw their way back into the hearts of customers. 

Through restructuring, rebranding, and improving their menus, these chains are hoping to regain their once-loyal customer base while attracting new diners to their establishments. 

From seafood joints to ice cream parlors, here are 13 restaurant chains that are making a comeback after undergoing financial struggles. 

Red Lobster faced financial challenges due to rising seafood costs and declining customer traffic, especially during the COVID-19 pandemic. The chain filed for bankruptcy in May 2024, but is now focusing on menu innovation and expanding their “Endless Shrimp” promotion to attract customers. It's also hoping to improve online ordering and delivery options to cater to changing dining preferences. 

By emphasizing their affordable, high-quality seafood, Red Lobster hopes to win back customers seeking an indulgent but reasonably-priced meal.

Ruby Tuesday’s 2020 bankruptcy was driven by stiff competition, high overhead costs, and declining foot traffic, as many of their locations were based in shopping centers and strip malls. The chain also pointed to pandemic restrictions as a factor that impacted its sales, as many malls temporarily shuttered in-person dining. After closing underperforming sites, Ruby Tuesday shifted focus to healthier menu options and revamping it's salad bar, which was once a hallmark of the chain.

Though the chain is banking on its refreshed image, expanded menu, and revamped delivery to bring customers back, only time will tell if the efforts are successful. 

Known for its robust ice cream selection and family-friendly atmosphere, Friendly’s struggled with high operational costs and an inability to adapt to fast-casual dining trends. After declaring bankruptcy in 2011, the chain has since refocused on improving customer service and streamlining its menu. Friendly’s is also modernizing its restaurants and investing in digital platforms to enhance the customer experience. 

With these changes, the chain hopes to recapture its nostalgic and charming appeal while adapting to modern tastes and shifting preferences. 

Famous for its pizza by the slice, Sbarro filed for bankruptcy protection in 2011 due to over-expansion and reliance on mall food courts, which suffered from declining foot traffic. To make a comeback, Sbarro closed many underperforming locations and shifted focus to smaller, more profitable spaces in travel hubs and urban areas. The chain also introduced new menu items and focused on improving the quality of their food. 

Though Sbarro hopes to recapture the grab-and-go customer looking for a quick, affordable bite, real ones know their pizza is absolute trash. Sorry, not sorry. 

Fuddruckers, known for its customizable burgers and fun, family-friendly atmosphere, filed for bankruptcy in 2010 due to declining sales and increased competition from other burger chains. It also struggled with high operational costs and a limited ability to adapt to changing consumer preferences for faster, healthier options. To stage a comeback, Fuddruckers has focused on refreshing its brand by enhancing its menu with higher-quality ingredients and improving customer service.

The chain is also exploring new franchise opportunities and expanding its online presence to attract both long-time customers and new diners. 

Joe’s Crab Shack suffered from declining sales and high operational costs, which led its parent company to file for bankruptcy in 2017. Since then, the chain has focused on restructuring by closing less profitable locations and refining its seafood offerings to attract existing and new customers. The chain is also leveraging the appeal of its fun, beach-themed ambiance in hopes of attracting a younger demographic. 

It's also invested in improving its online ordering and delivery services to cater to the growing demand for convenient and accessible dining options. 

California Pizza Kitchen’s 2020 bankruptcy filing was driven by the pandemic's impact on casual dining and the chain's heavy reliance on in-restaurant dining. To come back stronger, it's since embraced online ordering, takeout, and delivery, as well as introduced a line of frozen pizzas sold in grocery stores. The chain also launched new plant-based and health-conscious menu items to attract vegetarian and vegan diners.

In addition, CPK has revamped its loyalty program to offer rewards and discounts in hopes of further incentivizing repeat visits and online purchases.

Once a major player in the world of sandwiches (Joey from "Friends" would approve), Quiznos filed for bankruptcy in 2014 due to over-expansion and increased competition from rivals like Subway. To revive its brand, Quiznos has since simplified its menu and rebranded to focus on higher-quality ingredients and unique offerings like toasted subs and signature sauces. 

The chain is also expanding internationally by targeting markets where it still holds a strong brand recognition. 

Known for its pizza buffet, Cici's filed for bankruptcy in 2021 as buffet-style dining lost popularity, especially during the pandemic. The chain has since shifted gears to enhance it's value proposition by offering affordable family deals and improving the quality of it's pizza. Cici’s has also started experimenting with off-premise options like online ordering and delivery to offer a more accessible dining experience. 

By emphasizing affordability and convenience, the chain hopes to attract budget-conscious families and regain its place in the competitive fast-food market.

Boston Market has long struggled with declining sales and changing consumer tastes, especially as demand for traditional rotisserie chicken waned. After filing for bankruptcy in early 2024 for a second time, the chain has refocused on menu variety by introducing healthier sides and plant-based options. The chain is also improving its digital ordering and delivery services in hopes of staying competitive. 

Though the brand hopes to attract health-conscious customers and those seeking comfort food with a modern twist, some are saying the chain is in its "final days." 

Krystal, known for its small square burgers and late-night dining, faced bankruptcy in 2020 due to operational inefficiencies and an inability to modernize its restaurants. The chain has since restructured by closing underperforming locations and revamping it's menu. The southern burger chain is also testing new concepts like drive-thru-only locations in efforts to cater to fast-food’s always evolving landscape. 

With a focus on speed and value, Krystal is trying to win back the late-night and on-the-go crowd. 

Garbanzo Mediterranean Fresh filed for bankruptcy protection in 2020, citing a significant drop in foot traffic and in-person dining during the pandemic. The chain has since focused on streamlining its menu to highlight its most popular, fresh, and healthy offerings, including customizable bowls and wraps. It also hopes to expand it's digital presence with improved online ordering and delivery options to cater to new customers.

With an emphasis on fresh, nutritious food and a commitment to faster service, Garbanzo is hoping to regain its footing in the casual Mediterranean food space. 

Souplantation, also known as Sweet Tomatoes in some regions, was a popular chain specializing in all-you-can-eat salad bars and healthy buffet options. But the chain was forced to file for bankruptcy protection in 2020 as the COVID-19 pandemic dealt a severe blow to buffet-style dining. Souplantation's business model, which was heavily reliant on self-serve buffets, became unsustainable due to health and safety concerns. 

The chain is now hoping to make a comeback by reopening revamped restaurant designs to appeal to modern diners craving fresh, wholesome foods.

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