The casual restaurant sector faced economic challenges in 2025 that have continued into 2026, leading to closed locations and bankruptcy filings.

Most restaurant chains have given similar reasons for closing locations, and in some cases, filing for bankruptcy, including rising labor and product costs driven by inflation, supply chain instability, consumers’ changing attitudes toward eating out, and unsustainable debt obligations.

Menu prices rose 31% over 5 years

One of the major issues has been food and labor costs, which have increased by 35% in the last five years. Average menu prices also rose 31% from February 2020 to April 2025, according to the National Restaurant Association.

Those rising menu prices discourage patrons from dining, which depresses restaurant revenue, creating economic hardship.

Two popular casual restaurants filed for Chapter 11 protection last year, facing financial distress, and another chain will permanently close down this year without filing for bankruptcy.

Restaurants filed for bankruptcy

Restaurant chain, On The Border Mexican Grill & Cantina, had about 120 locations at the beginning of 2025 and closed or vacated 40 non-performing stores on Feb. 24 because of problems with rent and/or financial performance.

On The Border filed for Chapter 11 bankruptcy on March 4, 2025, with plans to sell its assets to its prepetition bridge loan lender.

Italian restaurant chain Bravo Brio Restaurants LLC, the parent company of popular upscale Italian restaurant chains Bravo Italian Kitchen and Brio Italian Grille, filed for Chapter 11 bankruptcy for the second time in five years on Aug. 18, 2025, to reorganize its businesses and restructure debt.

Darden Restaurants Inc. is closing down its Bahama Breeze restaurant chain.

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Bahama Breeze closes down all locations

And now, popular casual dining chain Bahama Breeze is shuttering all 28 of its locations, as the company’s owner, Darden Restaurants Inc., said it will permanently close 14 restaurants and convert the remaining 14 into another brand.T

The closure of Bahama Breeze marks the end of the island-themed dining concept that was once popular with diners, dating back to the early 2000s.

The company said it does not expect its actions to have a material impact on its financial results, according to a Feb. 3 company statement.

The 14 restaurants earmarked for permanent closure are expected to continue operating through April 5, 2026. The remaining 14 locations will be converted over the next 12-18 months and will operate until any temporary closure is needed for conversion.

Locations converting to other brands

• 499 E. Altamonte, Altamonte Springs, Fla.
• 805 Brandon Town Center Drive, Brandon, Fla.
• 14701 S. Tamiami Trail, Ft. Myers, Fla.
• 8160 Irlo Bronson Memorial Highway, Kissimmee, Fla.
• 25830 Sierra Center Blvd., Lutz, Fla.
• 5620 W. Oak Ridge Road, Orlando, Fla.
• 8849 International Drive, Orlando, Fla.
• 8735 Vineland Ave., Orlando, Fla.
• 1200 N. Alafaya Drive, Orlando, Fla.
• 3045 N. Rocky Point Drive East, Tampa, Fla.
• 755 Earnest W. Barrett Parkway NW, Kennesaw, Ga.
• 570 Cross Creek Mall, Fayetteville, N.C.
• 7811 Rivers Ave., Charleston, S.C.
• 4554 Virginia Beach Blvd., Virginia Beach, Va.
• Source: Darden Restaurants

Darden has not disclosed which brands will replace the Bahama Breeze locations. It believes the locations designated for conversion are great sites that will benefit several brands in its portfolio, the statement said.

The company said it will support the Bahama Breeze team members and place as many as possible in roles within the Darden portfolio.

Locations no longer strategic priority

Darden said that it had completed its review of strategic alternatives for Bahama Breeze, after determining that the chain’s 28 locations were no longer a strategic priority, according to the statement.

The company was considering a sale of the Bahama Breeze chain, according to its fourth quarter earnings call in June 2025, TheStreet’s Daniel Kline reported at the time.

More closings: (1-31)

• Bankrupt restaurant chains permanently close popular locations
• Major retail chain closes 35 stores nationwide, no bankruptcy
• Another major retail chain closes warehouse operations

“Consequently, we will be considering strategic alternatives for Bahama Breeze, including a potential sale of the brand, or converting restaurants to other Darden brands,” Darden CEO Ricardo Cardenas said in the earnings call.

The company, however, was unable to find a buyer and decided to close half the locations and rebrand the others.

Bahama Breeze closings:

• 500 Center Blvd., Newark, Del.
• 3590 Breckenridge Blvd., Duluth, Ga.
• 12395 SW 88th St., Miami, Fla.
• 10205 Rivercoast Drive, Jacksonville, Fla.
• 1251 West Osceola Parkway, Kissimmee, Fla.
• 11000 Pines Blvd., Pembroke Pines, Fla.
• 1540 Rinehart Road, Sanford, Fla.
• 19600 Haggerty Road, Livonia, Mich.
• 2000 Route 38, Cherry Hill, N.J.
• 3309 Wake Forest Drive, Raleigh, N.C.
• 320 Goddard Blvd., King of Prussia, Pa.
• 6100 Robinson Center Drive, Pittsburgh
• 2714 Potomac Mills Circle, Woodbridge, Va.
• 15700 Southcenter Parkway, Tukwila, Wash.
• Source: Darden Restaurants

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