Bankruptcy Law, Business Bankruptcy

Cheesecake Factory, Dave & Busters & Outback Steakhouse Facing Bankruptcy

The coronavirus (COVID-19) pandemic has hit countless businesses hard, but the restaurant industry has been hit particularly hard.  According to a recent report from S&P Global, some popular large chain restaurants have made the list of businesses struggling to stay afloat.

Three restaurants are going through serious financial difficulties, namely the Cheesecake Factory, Dave & Busters and Bloomin’ Brands, the parent company of Outback Steakhouse.

S&P Global Market Intelligence released its report on August 10, identifying several restaurants that they determined had high probabilities of defaulting in 2021. Those restaurants at the top of that list include Dave & Busters, Bloomin’ Brands, Denny’s, and The Cheesecake Factory.  At the very top of the list is Dave & Busters with a probability of defaulting at 16.1 percent. Bloomin’ Brands, the company that owns Carrabba’s Italian Grill, Bonefish Grill, and Outback Steakhouse has a rate of 13.2 percent with Denny’s and The Cheesecake Factory both reporting approximately 12 percent probabilities of defaulting in the upcoming year.

The S&P report reviews the median one-year market signal probability that a restaurant will default. The percentages quoted in the report represent the odds that a specific company will default within the next year by reviewing the market fluctuations in the company’s stock share price, as well as other risks. While the odds that any given publicly traded restaurant would default fell to 10 percent in July after hitting an all-time high of 35 percent in April, certain restaurants were not so lucky.

Many analysts attribute this to the fact that COVID-19 has continued to hit the country hard, leaving a large amount of uncertainty in the market. Government mandates still exist on the percentage of customers allowed in dining areas in many restaurants, and countless consumers are living off unemployment or a significant decrease in pay, leaving them less money to spend on non-essential activities like going out to eat.  Other businesses, including California Kitchen and the parent company of Chuck E. Cheese, have already filed for Chapter 11 bankruptcy, while other larger chains, including McDonalds and Starbucks have chosen to close many of their locations.

The report indicates that franchisees seem to have been hit the hardest during this epidemic. According to figures from Yelp, more than 15,000 restaurant locations have closed nationwide as of July 10th.

Alternatively, the S&P report shows that larger chains, including McDonald’s, Papa John’s, and Chipotle are the largest U.S. companies that are least likely to default over the next year.

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If you have questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.

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