Denny's, IHOP and more permanently shutter dozens of locations amid pandemic

COVID-19 forced restaurant chains to temporarily close some locations, but many will never reopen.
Denny's Pacific Highway
General overall view of Denny's diner at 17206 Pacific Hwy S., in SeaTac, Wash., Thursday, Aug. 30, 2018. The table service diner-style restaurant chain operates over 1,600 restaurants in the United States (including Puerto Rico and Guam), Canada, United Kingdom, Mexico, Dominican Republic, El Salvador, Cura?ao, Costa Rica, Guatemala, Honduras, Japan, New Zealand, Qatar, Phillippines and United Arab Emirates. (Kirby Lee via AP)Kirby Lee / AP

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/ Source: TODAY
By Aly Walansky

Hundreds of restaurants that were forced to temporarily close their doors in March at the start of coronavirus pandemic will never reopen again. While small businesses have been disproportionately affected, even major chains are not immune.

While some locations have managed to stay afloat through delivery and takeout services over the past several weeks, franchise operators and corporations have recently announced plans to shutter underperforming restaurants. Some casual eateries, like TGI Fridays, had announced major closures before March, but the pandemic has since accelerated many business owners' decisions to permanently close up shop.

Even as restaurants across the country start to reopen, many leaders in the culinary industry have expressed concern that it will be impossible to continue operating and be profitable under new social-distancing guidelines which mandate that most spaces operate far below their usual capacity.

Brio Italian Mediterranean and Bravo Italian Cucina

The parent company of these two Italian chains (which were already struggling before the pandemic), filed for bankruptcy in April and will close 71 of its 92 restaurants.

"The COVID-19 outbreak truly could not have come at a worse time for our business," FoodFirst Global Restaurants CEO Steve Layt said in a statement to Restaurant Business. "We have experienced nothing short of devastating sales declines."

Both chains have been offering takeout meals since the start of the pandemic. FoodFirst Global Restaurants has yet to announce a timeline for the restaurant closures.

Denny’s

As of late May, the home of the Grand Slam breakfast is closing 15 locations operated by one franchisee, Feast American Diners. At least one-corporate owned location shuttered earlier this year.

"Due to the severe financial environment caused by the COVID-19 pandemic, some of our franchisees have regrettably decided to close their locations. Denny's has been working with its franchise owners to assist in helping them through this crisis, but the final decision to close is in the hands of each franchise business owner and their particular circumstances," a spokesperson for Denny's told TODAY via email. "The current situation remains fluid and we are working closely with all of our franchisees to help them protect their businesses and their employees."

Since Denny’s franchise locations are independently owned and operated, the spokesperson was unable to provide additional details about future closures.

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IHOP

CFRA Holdings, an IHOP franchisee that runs 49 restaurants across Virginia, North Carolina, South Carolina and Tennessee, filed for bankruptcy on May 6 and closed all of its locations.

When reached by TODAY, a representative for the pancake chain would not elaborate on those closures, but did provide the following statement: "Throughout the crisis, IHOP has remained open for delivery, takeout and curbside pick-up and that guests should check online to learn more about their location’s offerings. As for dine-in services, restaurants are reopening as states and municipalities are lifting their restrictions on dine-in services."

Le Pain Quotidien

This fast-casual bakery cafe chain previously operated over 250 locations around the world. However, the company filed for Chapter 11 bankruptcy protection in May and announced it would be closing all 98 of its U.S. locations. Thanks to a partial buyout by Aurify Brands, at least 35 stores will likely be reopened at a future date.

Ruby Tuesday

At the start of 2020, this casual chain was operating 470 restaurants. In a recent interview with Restaurant Business, Aziz Hashim, founder and managing partner of Ruby Tuesday owner NRD Capital, said that number is now “between 270 and 300."

Amid increasing competition from fast-casual chains, Ruby Tuesday had been shuttering locations for years but, according to Hashim, the pandemic will likely spur the closure of many more restaurants.

"The final tally as to the permanent number of closures is to be determined for us,” Hashim said. “Some of it depends on how quickly sales come back.”

Steak ‘n Shake

In May, the Indianapolis-based restaurant chain, which is owned by San Antonio-based Biglari Holdings Inc., announced that it had closed 57 locations (51 of which were corporate-owned). The announcement was made public in an earnings report. There are now 553 Steak 'n Shake locations across the country.

"The COVID-19 pandemic had an adverse effect on our restaurant operations, thereby resulting in the evaluation of company operated restaurants for recoverability,'' the report stated.

Sweet Tomatoes and Souplantation

Garden Fresh Restaurants, the company behind buffet chains Souplantation and Sweet Tomatoes, announced that it would be permanently closing all 97 of its restaurant locations in early May.

“One of the 39 restaurant regulations was that salad bars and buffets are discontinued,” Garden Fresh CEO John Haywood told TODAY at the time. “That was really a turning point for us where we realized that the states are going to to follow the FDA regulations. We just can’t make it work.”

Since the start of the coronavirus pandemic, Haywood said his company was losing about $1 million each week.

TGI Fridays

The chain known for its large cocktails and ribs smothered in Jack Daniels sauce was already struggling before coronavirus. A spokesperson for the casual chain told TODAY that 10-20% of locations may permanently close in the near future.

"Due to COVID-19, there have been a lot of changes throughout the restaurant industry. With business being dramatically cut overnight and the lack of rent forgiveness when it comes to landlord and rent, some of our restaurants will not recover," the spokesperson said. "Getting the majority of our workforce back to their jobs safely is one of our most urgent priorities. We have already begun the process of rehiring our team members as sales continue to improve and certain markets partially reopen."