American Restaurant Chain Bankruptcies Part 1

By: Timothy McFarlin | Published: February 2nd, 2012 | Category: Bankruptcy

In the past decade, many of America’s most loved restaurant chains have closed. There is a saying that states that in the restaurant business you always have customers, because people need to eat. However, with the poor economical climate a lot of restaurant chains in America, are filing for bankruptcy, and closing many of their locations. In this 2 part blog post, we’ll look at the top 10 restaurant chains in the United States that have experienced the greatest decline in sales from 2001 to 2010. Sadly, the sales of each restaurant chain we discuss have fallen 60% or more over the past decade.

Ground Round Grill & Bar

The Ground Round is a casual-dining restaurant chain, with locations in the Midwest and the Northeast. Their menu includes steaks, burgers, Tex-Mex and more. The restaurant’s parent company filed for bankruptcy in February of 2004. Almost immediately, 59 company-owned restaurants closed, but 72 franchise locations remained open. Only 25 Ground Rounds remained in business as of 2010.


  • Change in sales (2001-2010): -81.7%
  • Sales 2001: $225.25 million
  • Sales 2010: $41.25 million
  • Change in units (2001-2010): -80.9%

Bennigan’s Grill & Tavern

The Irish-themed casual-dining restaurant Bennigan’s filed for Chapter 7 bankruptcy protection in July 2008. The company closed its 160 corporate-owned locations, and laid off approximately 10,000 employees. Out of the 138 franchised Bennigan’s locations that avoided bankruptcy, only 35 remained as of 2010.

  • Change in sales (2001-2010): -87.9%
  • Sales 2001: $565 million
  • Sales 2010: $68.5 million
  • Change in units (2001-2010): -87.5%

Damon’s Grill & Sports Bar

Based in Columbus, Ohio, Damon’s is an American-style restaurant. Their menu includes; grilled steaks, prime rib, chicken, seafood, and salad. The chain positioned itself as a Sport’s bar, and when sport’s fans decided to stay home and to watch the game, business began to decline. The chain, which once had 137 restaurants in 2001, had only 86 in 2007. The company worked hard changing their business model, reformatting their restaurants, redecorating interiors, as well as improving their menu, and their logo, but still as of 2010, only 38 Damon’s locations were in operation.

  • Change in sales (2001-2010): -69.8%
  • Sales 2001: $284.84 million
  • Sales 2010: $86 million
  • Change in units (2001-2010): -72.3%

Don Pablo’s

The national Tex-Mex-style food chain Don Pablo’s, was negatively affected by their parent company Avado Brands Inc.’s bankruptcy filing in September 2007. The company sold many buildings that were subsequently auctioned off to other restaurants, such as Buffalo Wild Wings. From 2001 to 2010, the number of Don Pablo’s fell from 131 to 39.

  • Change in sales (2001-2010): -69.8%
  • Sales 2001: $268.25 million
  • Sales 2010: $81 million
  • Change in units (2001-2010): -70.2%

Gloria Jean’s Coffees

Founded in Chicago in 1979, Gloria Jean’s Coffees’ success spread to Australia, where it is a huge success today. The brand was owned by Diedrich Coffee in the U.S., where it’s success grew rapidly. By 2001, Gloria Jean’s Coffees had 330 locations. However, the fast expansion caused the company to have financial troubles. Diedrich sold the international segment of Gloria Jean’s Coffees in 2005, and in 2006, it sold many of their cafes to Starbucks. Diedrich sold the remaining Gloria Jean’s Coffees to Praise International North America in 2009, and as of 2010, only 87 cafes remain.

  • Change in sales (2001-2010): -69.1%
  • Sales 2001: $135 million
  • Sales 2010: $41.75 million
  • Change in units (2001-2010): -73.6%


Los Angeles Business Bankruptcy

If you are a business owner, and you are struggling with debt, contact us today. Our experienced business lawyers can help get your business get back on track. At McFarlin Law we offer free business bankruptcy consultations to prospective clients, so call us today (888) 728 0044 or email us here.


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