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- Casual dining chain Sizzler filed for Chapter 11 bankruptcy on Monday.
- “Our current financial state is a direct consequence of the pandemic’s economic impact due to long-term indoor dining closures and landlords’ refusal to provide necessary rent abatements,” Sizzler President Chris Perkins said.
- Other restaurant chains to file for bankruptcy during the pandemic include Maison Kayser, Souplantation, and California Pizza Kitchen.
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Sizzler is the latest restaurant chain to file for bankruptcy amid the coronavirus pandemic — filing for Chapter 11 in the U.S. Bankruptcy Court for the Northern District of California on Monday.
The company said in a filing that its goal is to keep restaurants open throughout the bankruptcy process, which will involve renegotiating leases for 14 company-owned locations.
“Many restaurant brands across the country have suffered because of COVID-19 and Sizzler USA is no exception,” Sizzler President Chris Perkins said in a statement. “Our current financial state is a direct consequence of the pandemic’s economic impact due to long-term indoor dining closures and landlords’ refusal to provide necessary rent abatements.”
Sizzler said it aims to complete the Chapter 11 process within roughly 120 days. Franchisees — who own and operate the vast majority of locations — will not be impacted by the filing.
Business Insider’s Irene Jiang reported that chain restaurants have permanently closed more than 1,500 locations since the pandemic began. While some chains are simply shuttering underperforming locations, others are restructuring more seriously. The companies behind chains like Maison Kayser, Souplantation, and California Pizza Kitchen have all filed for bankruptcy in recent months.
A recent survey from the National Restaurant Association found that nearly 100,000 restaurants have closed across the US since the pandemic began. Experts say that restaurants' struggles are unlikely to cease in the coming months, as the loss of extra unemployment benefits and the arrival of cold weather will keep customers from outdoor dining.
"It's very clear now that it's not a 2020 problem," Oliver Wright, the global head of Accenture's consumer goods and services practice, told Business Insider.
According to Wright, it is unlikely that disposable income levels will return to 2019 figures until early to mid-2022.
"The next 15 months, at a minimum, and probably next 18 months are going to be extremely challenging," for restaurants, Wright said.
