The casual dining sector faced economic challenges in 2025 that impacted restaurants’ liquidity, including rising labor and food costs driven by inflation, a pullback in consumer discretionary spending, which reduced foot traffic, and lease rates that may no longer make economic sense.

The financial implications from these challenges led several casual dining chains to restructure their debts out of court or, in other cases, file for bankruptcy to reorganize.

Some of the most significant bankruptcy filings this year have been Food Concepts International, owner of the Abuelo’s Mexican restaurant chain, which filed Chapter 11 bankruptcy on Sept. 2.

Bravo Brio Restaurant Group filed for bankruptcy

Also, Bravo Brio Restaurant Group, which operates the Bravo Italian Kitchen and Brio Italian Grille casual dining chains, filed its Chapter 11 petition on Aug. 18 with plans to close underperforming locations.

In March 2025, restaurant chains Bar Louie and On The Border Mexican Grill & Cantina also filed for Chapter 11 bankruptcy after closing several locations.

Popular Cajun casual restaurant chain Razzoo’s Cajun Cafe files for Chapter 11 bankruptcy.

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Razzoo’s Cajun Cafe files for bankruptcy protection

And now, popular Cajun casual restaurant chain owner Razzoo’s Inc. filed for Chapter 11 bankruptcy protection, as severe liquidity problems have prevented the company from meeting its lease and debt obligations.

The Addison, Texas-based owner of Razzoo’s Cajun Cafe, which operates 20 casual restaurant locations in Texas and North Carolina, filed its petition on Oct. 1 in the U.S. Bankruptcy Court for the Southern District of Texas in Houston, listing $10 million to $50 million in assets and liabilities.

Related: Another favorite whiskey brand files Chapter 11 bankruptcy

The debtor’s largest unsecured creditors include landlords The Pointe II CC LLC, owed over $4.2 million in rent, Corpus Christie Retail Venture, owed over $3.8 million in rent, Sabine 2016-1 LLC, owed over $3.6 million in rent, Crown HTV Agent, owed over $1.2 million in rent, and vendor Sysco Food Services of Dallas, owed over $1.3 million in trade debt.

Razzoo’s significant  creditors:

• The Pointe II CC LLC, owed over $4.2 million.
• Corpus Christie Retail Venture, owed over $3.8 million.
• Sabine 2016-1 LLC, owed over $3.6 million.
• Sysco Food Services of Dallas, owed over $1.3 million.
• Crown HTV Agent, owed over $1.2 million. 

Razzoo’s Cajun Cafe was established in 1991 and grew to six locations by 1996, 14 by 2001, and peaked at 24 locations in Texas, North Carolina, and Oklahoma, before closing four locations in recent years because of financial distress, according to court papers.

The debtor filed its petition, facing a decline in sales due to shifts in consumer spending habits following the Covid-19 pandemic and customer preference for more delivery, convenience, and affordability.

Macroeconomic factors affect foot traffic

Macroeconomic factors, including inflation and higher interest rates, led many consumers to “trade down” to fast-casual or quick-service dining to stretch their budgets, court papers said.

The debtor also faced heavy media advertising and discounts from casual dining competitors that drove business away from Razzoo’s and impacted its liquidity.

Liquidity shortages delay lease and debt payments

Razzoo’s long-term lease obligations placed a heavy burden on liquidity, with a large portion of monthly cash flow dedicated to rent. A liquidity shortage prevented the company from meeting its lease obligations, trade payables, and its prepetition debt obligations owed to First Horizon Bank.

More Bankruptcy:

• Beer brand and brewery files Chapter 11 bankruptcy
• Italian chain closed most restaurants in Chapter 11 bankruptcy
• Popular healthcare retail chain files for Chapter 11 bankruptcy

The debtor filed for Chapter 11 protection to seek financing or sale transactions to reorganize its financial affairs, save 1,000s of jobs, and continue operating as a going concern, according to court documents.

Razzoo’s bankruptcy goals:

• Reorganize financial affairs.
• Protect 1,000s of jobs.
• Continue operating as going concern. 

“With a strong geographic foothold in the state of Texas, the Debtors believe that the Razzoo’s brand remains well-positioned for additional expansion throughout the Southeast,” the debtor’s attorney, Matthew S. Okin wrote in court papers.

Related: 55-year-old women’s fashion company files Chapter 11 bankruptcy