The local American restaurant industry is facing a range of problems that are spelling trouble for many businesses. Many chains that were once at the top of their game are noticing alarming shifts, cutting down revenue, and increasing costs. Factors like inflation, shifting consumer behavior, and tariffs have all pushed many chains into economic uncertainty.
Many brands are now struggling to stay relevant amid evolving tastes and the rise of many competitors in a shrinking market. These chains are struggling in 2025, and if things don’t change, some could go under entirely. Here are some chains fighting for survival that consumers should watch closely, as they may not be able to survive the next decade.
Subway
Subway was once the world’s largest restaurant chain, but in the last ten years, the business has closed more than 4,000 locations across the world.
Their menu has stayed the same and showcases how a failure to innovate can cause customer decline over time, especially in such a fiercely competitive market. Subway’s continued long-term success could hinge on radical reinvention, or could become a nostalgic memory in a few years.
Red Lobster
Red Lobster has experienced millions of dollars in losses and with the price of seafood rising, once-bustling dining rooms are now barely populated. Red Lobster has long stood as an affordable establishment where people can dine on seafood.
Unfortunately, supply chain complications caused by inflation have threatened its viability in the market. Any comeback attempts continue to face challenges, with closures signaling a shrinking future.
Applebee’s
Applebee’s used to be everyone’s go to for casual dining, but now it’s losing ground as consumer habits change. There’s been a drastic drop in customers coming back and in the last two years alone, more than 60 locations have been closed. The restaurant chain is finding it difficult to balance both affordability and a quality dining experience.
With competition from home meal kits and fast-casual eateries, Applebee’s consumer base has shrunk in recent years, causing concern from many. Applebee’s may need to redefine its value proposition to bring customers back in and keep them coming back for more, or else it risks fading into the dining landscape within the next decade.
TGI Fridays
TGI Fridays were a vibrant social hub just a few years ago, but in 2024 have filed for Chapter 11 bankrupcy after a decline in sales and overexpansion increases costs and lowered revenue. More than half of the chain’s stores have been closed in the last decade, with modern consumers favoring new experiences over traditional and established chains.
TGI Fridays’ outdated ambiance and menu have failed to captivate new customers and keep pace with competitors. If the chain is to survive, a successful international expansion and menu renovation is needed. TGI Friday may continue to fall behind if it cannot innovate and become a cautionary tale of a brand unable to evolve with its consumers.
Hooters
Hooters used to be a heavyweight in the 1990s due to its brand image and controversial themes. However, in the 2020s, the restaurant feels more like a nostalgic brand that doesn’t resonate with younger audiences anymore. Over the last ten years, the business has closed well over a hundred locations and recently filed for bankruptcy.
The brand needs to modernize without diminishing the unique experience that older customers still enjoy, or else it risks losing all consumers. The chain’s survival is uncertain, and many analysts predict that it could disappear or scale down significantly in the next few years unless successful changes are made.
Boston Market
Boston Market once offered a unique experience where diners could enjoy rotisserie chicken and homestyle meals, but are now struggling as competition rises from grocery store hot bars and meal delivery services. In recent years, the brand’s image has also taken a blow due to lawsuits alleging wage theft and unsafe working conditions.
The majority of Boston Market locations have closed since 2022, signaling economic troubles for the business. Boston Market may need to innovate through either technology or a wider variety of menu options in order to stay relevant, or else its survival will look less likely each year.
Buffalo Wild Wings
Buffalo Wild Wings used to be a popular sports bar, but in recent years, it has been losing customers due to competitive, healthier, and more affordable dining options. Foot traffic has decreased significantly as consumers become more health-conscious and budget-oriented.
Rising costs and economic pressures have led to the closure of multiple locations, as the brand struggles to find a niche in the modern consumer market, who prefer fast deliveries. The franchise may need to pivot to a healthier menu or broaden its digital reach.
Otherwise, it will face further market erosion. The chain may have to act quickly, as in the next three to five years, it could face further declines.
Taco Bell
Taco Bell has been a fast food giant for decades and has ingrained itself in American culture. Yet, the chain is facing pressures such as addressing health and sustainability concerns. The menu is traditional, and is high in sodium and processed ingredients – a trend that is fading from public appeal.
Health-conscious consumers will look for alternative restaurants, and even though Taco Bell has introduced new menu items, these measures may be too slow and insufficient. The survival of the chain hinges on innovating menu items to be nutritious and sustainable, all without sacrificing the signature flavors that made it a titan in the restaurant industry.
IHOP
IHOP has been a breakfast-focused restaurant, with its iconic pancakes creating most of its appeal. The chain is now at odds as consumer preferences change to a healthier mindset.
IHOP has a carb-heavy brand image, and despite diversifying its menu, it may not be enough. A pivot must be made towards more convenient or healthier options, else the franchise could lose relevance in today’s market of quick delivery and healthy eating.
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