In life after COVID-19, experts warn that the local restaurant scene may be no more than a KFC, McDonald’s, Burger King and one or two overpriced craft cocktail bars serving tapas which somehow managed to survive the financial distress from the pandemic.
There have been eight bankruptcies of outright restaurant chains or operators of franchises since early April. With each month that has passed, the filings have become prominent as restaurants struggle with weak traffic after being allowed to reopen by states, piles of debt and sky-high rent. The latest two high-profile names include children’s fun house Chuck E. Cheese’s (Chapter 7) and Wendy’s and Pizza Hut franchisee NPC International (Chapter 11) on July 1st.
Food First was one of the first to file for Chapter 11, back on April 10, followed by Bamboo on May 10th, Le Pain Quotidien on May 27th. Toojay’s (April 29) and Souplantation (May 14) filed for Chapter 7.
“We have to have a bailout [of the restaurant industry],” said celebrity chef and owner of restaurant Blue Dragon Ming Tsai on Yahoo Finance’s The First Trade. “I don’t know if the government understands the severity of this problem. We may be left with just chain restaurants and fast-food restaurants if the government doesn’t react.” With government assistance nowhere in sight, Tsai may not be too far off the mark.
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