Red Lobster TGI Fridays closing are well-known chains and have experienced closures in recent years. So what has caused the closures of such iconic chains?
The announcement of Red Lobster and TGI Fridays going out of business earlier has surprised many Americans. These formerly successful casual dining chains are decades-old brands that provided nautical feasts to hot appetizing appetizers and happy hour beverages.
What is happening that makes such well-established chains stumble in a market that still loves to dine out? In this blog post, we will examine in detail the reasons behind Red Lobster and TGI Fridays’ shutdowns based on the financial, cultural, and overall industry pressures.
Why Is Red Lobster Going Out Of Business?
The news of Red Lobster closing down has been trending because Red Lobster recently announced that they were planning to shift to Chapter 11 bankruptcy starting in May 2024. It was not a straight shutdown, but a plan for business restructuring.
The fact that Red Lobster is shutting stores is attributed to the following major reasons:
- Expensive food and labor
- The underperformance of some of the outlets
- Foot traffic is falling off
- Unprofitable promos (such as the deal of Endless shrimp)
Red Lobster has said it will emphasize the locations that have done well and eliminate the low-performing ones. CNN reported that restructuring was done, and over 90 restaurants were closed in early 2024.
Who Sold Red Lobster?
Thai Union Group, one of the biggest seafood suppliers in the world, became the Red Lobster company’s biggest shareholder in 2020 after purchasing a sizeable portion of the business.
It has been considered in the first place as a strategic alliance, where the operations of Red Lobster aligned with another seafood giant worldwide.
Nevertheless, due to financial limitations that the restaurant chain faced, with increased expenses related to operations and sales, the relationship between Thai Union and Red Lobster started to sour.
New owners and a plan are now the main hopes of the seafood chain formerly known as the most iconic one that must win back its presence with consumers and profitability.
The Question Behind the Reason Why TGI Fridays Are Closing
Another famous American casual food chain, TGI Fridays, has not been left behind, as it has announced several closures to the news. The Red Lobster and TGI Fridays closure buzz is not as heavily promoted as the Red Lobster one, but the chains have received publicity through the movement.
Closure of TGI Fridays is because of:
- Large costs of operation
- Low traffic of customers in the areas
- Restructuring of debts
- Change in consumption patterns of dining consumers
Restaurant Dive noted that in 2024, TGI Fridays revealed that it would reduce store areas that were not performing well and prioritise the best performing stores.
TGI Fridays Shuttered Restaurants
TGI Fridays verified that they will close a range of restaurants in New York, Texas, and California. All of them were in shopping malls or centers with reduced load on their feet. To find information about particular closures, it is possible to visit the official TGI Fridays website or local news.
These are not the shutdowns but efforts made in a long-term restructuring plan. The business will focus on restoring the brand by refreshing menus and a 21st-century dining experience.
The Restaurants That Will Close Forever in 2025
The Red Lobster and TGI Fridays closing trend has the broader issue of the industry within the restaurant industry. The giants of casual dining are becoming challenged:
- Price inflation pressures
- Lack of manpower
- Move to fast-casual and food delivery
Some of the other popular chains have also revealed their intention to close down their places permanently, such as:
- Applebee’s (shutting down more than 30 restaurants)
- Ruby Tuesday (continued inspection in rural localities)
- Boston Market (filed for bankruptcy and closed many outlets)
- Hooters Restaurant and Red Lobster Closure
Although Red Lobster has been the focus of the restaurant-related news lately, it is not the only established chain that is seeing its audience decline. Hooters had also earlier announced closing over 40 of its restaurants in America in 2024, which is an indication of further problems in the casual dining industry.
Just like Red Lobster, TGI Fridays, and Hooters have been facing a consistent drop in foot traffic, especially where tastes have changed towards more crunchy activities, time-saving, or fancier restaurants.
53 Restaurant Chains That Will Be Closing in 2025
More than 50 restaurant chains have announced the closure of their restaurants as a result of the economic reality in 2025. The most glaring:
- Steak n Shake
- MOD pizza
- Sweet Tomatoes
- IHOP (Some sites)
The Eat This, Not That explains that the closures are a survival strategy, but not a complete failure.
The Biggest Restaurant Chain to be Closed
It does not mean Red Lobster may be alone in closing stores, as it may be one of the largest restaurant chains doing so. Some of the large names are downsizing to balance the budget and capture the changes in consumer needs.
Among the large chains to pull back are:
- Subway: Selling of sites to franchisees
- Burger King: The decision to shut hundreds of restaurants that failed to perform well
- Outback Steakhouse: Reducing the number of locations in poor-performing areas
All these are adjustments that are long-term strategy to stay competitive.
What Is Behind the Closing of Red Lobster and TGI Fridays?
The casual dining industry had been bustling in 2025, but now, it is going through an identity crisis. The famous chains, such as the Red Lobster and TGI Fridays, which were dominant in the American restaurant market, are closing down shops in the country.
Such shutdowns are not due to one challenge that is taking place, but a combination of woes that have gradually caught up with the classic sit-down eating concept. The causes of the trend of the closure of Red Lobster and TGI Fridays are based on the underlying changes in consumption of food, how people spend, and their interaction with dining brands.
There is a Change in Consumer Behavior
The drastic change in consumer preferences is one of the greatest factors that influence the closures. The current need of the diners is to find quicker, more convenient meals that cater to their busy schedules.
Fast-casual restaurants like Chipotle, Panera Bread, and even Sweetgreen have sprung up to provide consumers with quicker, less expensive, and more individualized meals than full-service restaurants in a shorter amount of time.
Eating in has also become more appealing due to an increase in delivery and takeaway options. The change has also caused trouble for Red Lobster and TGI Friday, two of its chains. Their products are designed for table service, ensuring a slow-paced social experience.
Their menus, their prices, and the service they offer were built for another time. Speed and convenience for customers on the go were not at the top of my mind back then. Age.
Expensive Operation Costs
The situation has been even more precarious due to economic hardships. Throughout the industry, restaurants have been suffering with extreme increases in food prices, labor prices, and even renting prices.
The Red Lobster and TGI Fridays, with their wide ranges in their menu and bigger dine-in restaurants, are more susceptible to cost inflation. Having a large footprint comes at a higher price of utility bills, more square footage to lease, and more personnel to hire.
The labor costs have also suffered with the minimum wage rate rising in numerous states, apart from an increase in the turnover of the employees.
Coupled with the increase in food prices, due to difficulties in the global supply chain and inflation, the costs of being located in certain locations become untenable. Even a little decrease in profit margin rates of national chains with hundreds of stores can cause them great losses.
The Post-COVID Adjustments
We are no longer in the middle of the COVID-19 pandemic; however, its economic and social consequences are also continuing to shake the whole restaurant sector.
Most of the casual dining chains were not able to recover after the shutdowns and capacity limitations completely. Some were able to shift to the delivery and takeout business, but others, especially the ones that are more centered on ambiance and in-person service, had a hard time adjusting as fast.
It is going to last, and no one has to eat out anymore as a frequently occurring routine, since home cooking and socializing in a virtual space is introducing a new wave of customer culture.
Consequently, Red Lobster and TGI Fridays have experienced a steady loss of customers, while other food industry schools achieve a faster recovery.
Technological Evolution
The other propelling factor is the dynamic change in the field of technology in the food situation. Restaurants have to now provide contactless dine-ins to customers where they can easily make orders using their mobiles and pay without having any physical contact with cashiers.
Digital innovative chains have a low risk of being left behind. Some of the newer brands or the brands with increased growth were made based on technology-driven models, but the slow-moving brands, such as Red Lobster and TGI Fridays, found it difficult to achieve the same.
The restrictions on mobile ordering, lack of modern systems, and speed in adoption of app-based ordering have also led to a decline in popularity among these chains as younger consumers endorsed by technology seek quick and convenient ordering with increased personalization.
Red Lobster and TGI Fridays are not the only restaurants that have been closing; it is a part of a broader tendency that is making the restaurant industry new.
Frequently Asked Questions:
Q1. Why Red Lobster Is Shutting Restaurants?
Due to increased food and labor prices, decreased foot traffic, and financial tribulations that resulted in a 2024 bankruptcy declaration, Red Lobster is shutting down poorly performing restaurants.
The shutdowns are included in a strategic plan to reduce losses, economize operations, and concentrate on more profitable restaurants.
With the changing consumer behavior, which is moving towards fast-casual and delivery models, Red Lobster is reorganizing itself to remain competitive and survive in the long-term future, in the new reality of dining.
Q2. Is TGI Fridays Going Out of Business?
No, it is not. Nevertheless, the chain is shutting down some underperforming branches as a more comprehensive plan to improve its bidding levels, trim down expenses, and generate general profitability.
The shutdowns are expected to reorganize the operations and concentrate on the markets where the brand is doing well. TGI Fridays is also struggling to keep up with the new generation of customers, due to the fluctuating economic conditions, just like every other casual dining restaurant chain. The brand is still present in the country.
Q3. Who is the Owner of Red Lobster?
Thai Union Group was the majority owner of Red Lobster, but since this case is in bankruptcy, they are scouting new owners.
Q4. Could I use Red Lobster or TGI’s Friday’s Gift Card?
Sure, and you should use short-term ones. Bankruptcy may influence long-term policies revolving around the redemption of gift cards.
Q5. Will there be a Closure of all Red Lobsters and TGI Fridays?
No. The locations that are being shut down are strictly in certain underperforming locations. There are a lot of branches that will stay open and are going to work.
Final Thoughts:
The trend of Red Lobster and TGI Fridays shuttering is not the end of the famous chains. Instead, it is a wake-up call to the casual dining industry. With the reorganization of Red Lobster and TGI Fridays closing its ranks, it wants to come out subsidized and more robust.
As these chains aim to stay competitive, customers should expect new things in menus, technology, and customer service. It’s heartbreaking to see long-time stores close, but the aim is that these efforts will help keep popular brands alive for future generations.
