4 Burger Chains On a Downward Spiral In 2024
This year has been a fantastic one for a number of burger chains. Shake Shack, for example, saw impressive boosts in sales and launched a new loyalty program. Others opened new locations at a rapid pace, unveiled exciting new menu innovations, or won awards for fan-favorite burger creations.
But even though some burger chains have flourished in 2024, others have faced some serious blows to their popularity. We're talking sales declines, restaurant closures, and even bankruptcy in some instances. Fortunately for fans, most of these struggling burger chains have launched special initiatives aimed at reviving their businesses. However, customers may have to say goodbye to one of these brands for good soon.
Read on for the four burger chains on a downward spiral right now.
BurgerFi
BurgerFi has been having quite a difficult year. Back in May, the gourmet burger chain revealed that it had shuttered eight underperforming restaurants and seen a 13% drop in same-store sales in the first quarter of 2024.
A few months later, the company's stock was delisted from Nasdaq because it had failed to file financial results on time, and BurgerFi warned that bankruptcy was a possibility. It officially declared Chapter 11 bankruptcy in September, with BurgerFi officials attributing the move to rising costs and a "drastic decline" in consumer spending after the pandemic. However, some operators have alleged that poor decisions from leadership were to blame.
BurgerFi secured funding to keep its restaurants operational and make it through the Chapter 11 process. Its lender (TREW Capital Management Private Credit 2 LLC) then purchased the company out of bankruptcy in October for $44 million.
BurgerFi officials said in a statement at the time that the sale would benefit the chain and position it for growth, per Restaurant Business Magazine. So as we move into 2025, BurgerFi fans should stay tuned for updates on how the burger slinger fares under its new owner.
TGI Fridays
BurgerFi isn't the only struggling burger chain to resort to bankruptcy in 2024. TGI Fridays—the iconic casual dining chain known for its burgers, potato skins, wings, and cocktails—submitted its own Chapter 11 filing in early November after weeks of bankruptcy rumors.
The chain has struggled with sales growth and closures for years, shuttering roughly 50 restaurants since the start of 2024 alone. This fall, the company also lost control of most of its assets after failing to file documents to bondholders on time. The United Kingdom-based TGI Fridays operator Hostmore backed out of plans to buy the chain days later and filed for the nation's equivalent of bankruptcy.
TGI Friday's Chapter 11 filing in the States only impacts its 39 company-owned locations, which have remained operational during the bankruptcy. The company plans to use the Chapter 11 process to restructure its finances in a bid to revive the chain.
"The next steps announced today are difficult but necessary actions to protect the best interests of our stakeholders, including our domestic and international franchisees and our valued team members around the world," TGI Fridays Inc. Executive Chairman Rohit Manocha said in the bankruptcy announcement, blaming their financial challenges on COVID-19 and "our capital structure.
He added: "This restructuring will allow our go-forward restaurants to proceed with an optimized corporate infrastructure that enables them to reach their full potential."
Applebee's
Applebee's is yet another popular sit-down burger joint that has contended with some serious obstacles in 2024. It has reported six consecutive quarters of same-store sales declines, including a nearly 6% drop in the most recent period. Applebee's has also been shuttering more restaurants than it has opened for years, mostly due to the high cost of building new locations. It expects to end 2024 with 25 to 35 net fewer restaurants than it had at the start.
In a November earnings call, company leaders blamed their recent challenges on a drop in consumer spending and competition from other chains that have launched enticing value promotions. Moving forward, they're focusing on offering more full meal deals at Applebee's to appeal to budget-conscious consumers and improve the chain's performance.
"The guest definition and expectation of value shifted over the last couple of quarters there," John Peyton, CEO of Applebee's parent company Dine Brands, said during the call. "They started to focus on the total cost of the meal.
Bagger Dave's
The future of the Michigan-based burger chain Bagger Dave's is murky at best, and nonexistent at worst. In early 2024, BT Brands (which owns 40% of the chain) announced that it was pursuing "strategic alternatives" for the burger concept.
The company said it wanted to start the process of converting its remaining Bagger Dave's locations into another concept entirely later in 2024. So if it achieves this goal, the Bagger Dave's brand will effectively come to an end.
Founded in 2008, Bagger Dave's was once an up-and-coming brand with 25 restaurants across three states. However, it has struggled since its peak with drops in sales, declines in customer traffic, and restaurant closures, per Restaurant Business Magazine.
The conversions apparently still have yet to take place, as Bagger Dave's six remaining locations were still marked as "open" on Google at publication time. However, BT Brands said it's aiming to find a conversion opportunity that provides "potential career growth for all current employees of Bagger Dave's" and big financial returns for shareholders.
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