Gourmet Burger Brand Faces the Fryer: Files for Chapter 7 Protection

Gourmet burger brands are facing unprecedented challenges as the restaurant industry grapples with mounting financial pressures. Many of these companies are filing for bankruptcy or closing locations at an alarming rate. If you’re a fan of these brands or simply watching the industry’s shifts, it’s clear that economic headwinds have hit hard.

The year 2024 and early 2025 have seen several prominent players struggling to stay afloat, with some even resorting to Chapter 11 bankruptcy protection to try and reorganize their debts. TGI Fridays, a long-standing American chain, filed for Chapter 11 in November 2024. Since then, it’s closed around 100 locations in 2024 and another 30+ in early 2025, shrinking from 270 stores to just over 130. These closures reflect not only financial distress but also a strategic retreat from less profitable markets.

Similarly, Hwy 55 Burger Shakes & Fries’ parent company filed for Chapter 11 at the end of 2024, citing high costs and labor shortages as primary factors. The struggles stem from rising debt levels, inflation, and fierce competition from fast-casual and other dining options. Post-pandemic labor shortages have limited operational capacity, making it harder to keep costs down and serve customers efficiently. Meanwhile, inflation has driven up food and labor costs, squeezing margins further.

In addition to bankruptcy filings, several brands are downsizing their footprints significantly. TGI Fridays, for example, closed more than a hundred locations in 2024 and early 2025, with their presence dwindling from 270 stores to just over half that number.

Wahlburgers, which didn’t file for bankruptcy, ended its partnership with Hy-Vee, closing all 79 in-store locations by February 2025 after poor performance. Across the Atlantic, Almost Famous, a U.K.-based gourmet burger chain, announced the closure of all its locations early in 2025, though it’s since reopened some under new ownership. Red Robin, another national chain, announced plans to close up to 15 underperforming restaurants this year, with the potential for more closures down the line. In 2024, fast-casual burger brands like Shake Shack and Five Guys also reported slower sales growth, indicating a broader industry slowdown.

These closures often target areas with high operational costs or lower sales, reflecting the broader struggle to adapt to changing consumer habits.

Consumer behavior is shifting as well. Rising meal costs and economic uncertainty have made diners more selective, favoring economical, convenient options over traditional sit-down experiences. The decline in sales and store closures across these brands highlight how financial strain, rising costs, and evolving customer preferences are reshaping the landscape of the gourmet burger industry.

As these brands grapple with their financial realities, some may face the ultimate step—filing for Chapter 7 liquidation—marking the end of their journey in an increasingly competitive market.