Chain restaurants faced a downturn in 2025 that led to location closings and bankruptcy filings throughout the sector.
Long John Silver’s has reduced its footprint amid declining restaurant industry sales, with one franchisee now filing for bankruptcy liquidation.
Sales recorded by chain restaurants reached their lowest growth rate since the Great Recession of 2008, not counting the Covid-19 pandemic, according to the 2026 Technomic Top 500 Chain Restaurant Report.
U.S. sales generated by the 500 largest restaurant chains in 2025 increased by 3%, which was lower than the 3.5% growth in 2024. Sales growth was also lower than the 3.8% menu-price inflation in 2025, according to the report.
Median sales growth was 2.5% for the Top 500 chain restaurants, which was actually a 1.3% decline in sales when adjusted for 3.8% in menu- price inflation, according to Technomic, which is affiliated with Restaurant Business and Nation’s Restaurant News.
A Minneapolis Long John Silver’s restaurant franchisee closes the state’s last location and files for Chapter 7 bankruptcy.
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Franchisee files Chapter 7 bankruptcy
Long John Silver’s restaurant franchisee Uplifted Foods LLC filed for Chapter 7 bankruptcy liquidation about a month after closing its restaurant at the Mall of America in Minneapolis on April 30, according to the Minneapolis/St. Paul Business Journal.
The Eagan, Minn.-based franchisee filed its petition in the U.S. Bankruptcy Court for the District of Minnesota in St. Paul on May 29, listing up to $100,000 in assets and $100,000 to $1 million in liabilities, according to Bankruptcy Observer.
Uplifted Foods listed over $157,000 in debts owed to creditors, including about $111,000 owed to the owners of the Mall of America, according to the Business Journal.
The franchisee did not give a reason for filing for Chapter 7 in its petition. The company did not reveal the number of employees affected by the closing.
Last location in Minnesota closes
The mall location was Long John Silver’s last restaurant in Minnesota, as the chain has exited the state after closing the Minneapolis store.
The Louisville, Ky.-based fast-food seafood restaurant chain opened its first location in Lexington, Ky., in 1969, and expanded to over 1,000 locations by 1979, according to the Long John Silver’s history on its website.
Chain has closed over 700 restaurants
Long John Silver’s grew to 1,081 locations in 2007 before it began its decline to 485 in 2024, according to QSR Magazine. The company currently has 375 locations in 25 states, according to its website.
A group of franchisees purchased the chain from Yum Brands in 2011.
Among the problems restaurants like Long John Silver’s have faced are rising labor and food costs, which increased by 35% from 2019 to 2025, according to the Bureau of Labor Statistics. Restaurants have needed to pass many of the extra costs on to their customers.
On top of labor and food costs, menu prices have risen by an average of 31% from February 2020 to April 2025, based on Bureau of Labor Statistics data, the National Restaurant Association reported. High menu prices discouraged many consumers from dining out during that time.
Pizza Hut and Papa John’s shut locations
Other restaurant chains facing economic distress and future closings include Yum Brands’ Pizza Hut chain, which said it would shutter 250 underperforming locations as part of its Hut Forward plan in the first half of 2026.
Papa John’s unveiled in its fourth-quarter earnings call that it will close 300 underperforming restaurants, including 200 by the end of 2026. The company did not reveal a deadline for closing the remaining 100.
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