The chain restaurant industry has faced significant economic challenges over the past five years, resulting in numerous closures and bankruptcy filings. Fast-food chains like Long John Silver’s have been forced to downsize their operations, a trend that dates back to the Great Recession of 2008. More recently, the impact of inflation, driven by the Covid-19 pandemic since 2020, has led to higher labor and food costs. As a result, menu prices have surged, dissuading customers from dining out.
The rise in costs has had a profound effect on the industry, with labor and food expenses increasing by 35% from 2019 to 2025, according to the Bureau of Labor Statistics. Menu prices also saw a steep 31% uptick from February 2020 to April 2025, as reported by the National Restaurant Association. Consequently, restaurant sales growth has slowed significantly, reaching its lowest level since the Great Recession, excluding the impact of the Covid pandemic.
Long John Silver’s, a 57-year-old fast-food chain, has been particularly hard hit, closing a staggering 706 locations nationwide since the onset of the Great Recession. The seafood restaurant chain, which peaked at 1,081 locations in 2007, began its decline in 2008, shutting down 59 locations in response to the financial crisis.
The repercussions of the economic downturn have also been felt in the form of bankruptcies. Some notable casualties during the initial phase of the crisis included Starbucks, which closed over 600 locations, and S&A Restaurant Corp., the owners of Benniganâs and Steak & Ale chains, which filed for Chapter 7 bankruptcy in 2008. Long John Silver’s continued to face closures in the following years, with 33 locations shuttered in 2009, 25 in 2010, and a significant closure of 75 locations in 2014.
In the aftermath of these challenges, Long John Silver’s has closed a total of 330 locations over the past decade, ending 2024 with 485 restaurants. A further 110 units were closed in the last year and a half, leaving the chain with 375 remaining stores.
The struggles faced by Long John Silver’s are not unique, as other restaurant chains are also grappling with economic difficulties. Yum Brandsâ Pizza Hut chain has announced plans to close 250 underperforming locations as part of its Hut Forward initiative. Papa Johnâs has also revealed intentions to shut down 300 underperforming restaurants, with 200 closures expected by the end of 2026.
The challenges faced by Long John Silver’s and other restaurant chains underscore the ongoing impact of economic upheaval on the industry. As the landscape continues to evolve, these businesses must adapt to survive in an increasingly competitive market.
