What Restaurants & Chains Closed (2025 Report)

Key Takeaways on Restaurants and Chains That Closed:

• Many restaurant chains closed or downsized in 2025.
• Closures resulted from bankruptcy or strategic decisions.
• Major closures included Melt Bar and Grilled, CosMc's and a popular Mexican chain.
• Red Lobster, TGI Friday’s and Boston Market shut down numerous locations.
• Subway closed over 600 stores in 2024, with more expected in 2025.
• Inflation and remote work led to fewer in-person visits, especially in urban areas.

In 2025, several restaurant chains closed locations or shut down entirely — some after bankruptcy, others by choice. This report tracks which brands closed, how many locations were affected and why. 

Note: For a broader look at industry bankruptcies from 2020 through 2025, see our full report.

Notable Restaurants & Chains Closure

Throughout 2025, several well-known restaurant chains either shut down entirely or closed a large number of locations. 

While some closures followed formal bankruptcy filings, others were part of broader cost-cutting strategies or responses to declining sales. 

This summary highlights major fast food and casual dining brands that scaled back operations or exited the market altogether.

Why Restaurants Closed in 2025

Restaurant closures in 2025 weren’t always tied to bankruptcy. Many brands, including long-established chains, opted to shut down locations due to operational hurdles and performance issues. 

Common drivers included:

Margin Pressure From Rising Costs

Costs climbed across the board — from ingredients to rent. 

According to Restaurant Dive, 87% of operators faced increased food prices in 2024, and 88% reported higher labor costs. These pressures continued into 2025, squeezing already thin margins. 

Rent hikes and utility bills further pushed some units into the red, especially in high-rent areas.

Persistent Staffing Gaps

Labor shortages remained a top concern. Over a quarter of restaurant operators listed staffing as a major issue, according to Push Operations. 

Many had to shorten hours, close on slower days or limit service areas due to understaffing — impacting revenue and customer satisfaction.

Changing Dining Patterns

Takeout, pickup and delivery became the default for many diners. The National Restaurant Association reported that 75% of restaurant traffic came from off-premise orders in 2024, a trend that continued in 2025. 

Restaurants that relied on in-person dining but failed to pivot to fast, reliable off-premise service struggled to maintain revenue.

Falling Foot Traffic in Key Locations

Inflation and hybrid work cut into in-store visits. High living costs led consumers to cook at home more often. 

Without foot traffic, many locations couldn’t meet sales targets.

How Surviving Restaurants & Chains Are Trying To Avoid Closure

In the wake of widespread closures in 2024, many restaurant chains are shifting their strategies in 2025 to reduce costs, improve efficiency and align with evolving consumer preferences — trends also reflected in restaurant success and failure statistics.

See also: 75+ Restaurant Industry Statistics for 2025

Streamlining Menus To Control Costs

To improve kitchen efficiency and reduce waste, many full-service restaurants are cutting down on menu size. 

Operators trimmed their offerings to focus on high-margin dishes and reduce complexity, especially as labor and ingredient costs continue to rise.

Investing in Restaurant Technology

Technology upgrades are central to cost-saving efforts. Restaurant operators plan to increase tech investments in 2025, focusing on tools like AI-powered inventory systems, dynamic pricing and automated staff scheduling. 

These tools help operators do more with fewer resources.

Operational Adjustments Based on Demand

Chains are using data to adjust staffing, store hours and supply orders based on real-time demand. 

Predictive analytics allow restaurants to minimize overstaffing and optimize resource allocation — a key tactic for brands downsizing their physical footprint but maintaining delivery or takeout operations.

Adapting to Shifting Dining Habits

Operators are also responding to broader changes in customer behavior to remain relevant and avoid closure.

• Experience-driven dining: With takeout satisfying basic food needs, more diners — especially millennials and Gen Z — now seek in-person experiences like Chef’s tables, live cooking stations or thematic concepts.
• Sustainability and local sourcing: A 2025 National Restaurant Association survey showed that 71% of diners are more likely to support eco-conscious restaurants. Chains that prioritize sustainable packaging, local ingredients, and ethical practices are more likely to retain consumer loyalty.
• Health-conscious offerings: Restaurants are expanding menus to include low-calorie, high-protein or allergen-friendly items. This shift follows consumer trends that favor clean eating and transparency over highly processed meals.

See also: Restaurant Food Waste Statistics in 2025

What’s Next for Struggling Restaurants and Chains?

Although the biggest wave of closures hit in early 2024, many restaurant chains remain at risk. High costs, shifting consumer habits and thinning margins continue to pressure underperforming locations.

To stay afloat, operators are leaning into automation and robotics, while also strengthening their off-premise sales through digital ordering and delivery platforms. These efforts help reduce reliance on in-store traffic and streamline operations.

Meanwhile, lean business models like ghost kitchens and virtual brands are gaining traction. By reducing overhead and offering more flexibility, these models allow restaurants to stay active without maintaining traditional storefronts.

In this environment, avoiding closure isn’t just about survival tactics — it’s about long-term adaptability. 

Chains that evolve with changing demand, control expenses and invest in the right tools may stay open. Those that don’t will likely continue to disappear from the dining landscape.