Rising inflation since the Covid-19 pandemic has severely impacted the restaurant industry, forcing certain chains to close underperforming locations and file for bankruptcy in some cases.
Inflation caused labor and food costs to increase by 35% from 2019 to 2025, according to the Bureau of Labor Statistics, forcing restaurants to pass many of the extra costs on to their customers.
Those rising costs led to higher menu prices, which rose by an average of 31% from February 2020 to April 2025, based on Bureau of Labor Statistics data, the National Restaurant Association reported. High menu prices discouraged many consumers from dining out during that time.
A popular restaurant chain, founded in the Pacific Northwest, has been struggling to remain in business as it deals with the impact of rising costs.
The owner of the Shari’s family-style, casual restaurant chain filed for Chapter 11 bankruptcy protection to reorganize its business, as the company has closed a significant number of locations over the last three years.
Shari’s owner files for bankruptcy
Lena Brands LLC, which operates nine 24-hour, family-dining Shari’s locations that are open in California, Idaho, and Washington, filed its petition, No. 26-10791, in the U.S. Bankruptcy Court for the District of Delaware on May 15, listing $1 million to $10 million in assets and $10 million to $50 million in liabilities, according to Bankruptcy Observer.
Shari’s, which was established in 1978, once operated 95 locations with 4,000 employees in six Northwestern states, according to its 2023 website.
The chain faces huge competition from a major casual, family-style restaurant chain, Denny’s, which has 1,249 locations nationwide, according to its website.
Denny’s has Shari’s three states blanketed with locations, with 346 restaurants in California, 39 in Washington, and 8 in Idaho.
Coco’s chain has 2 locations remaining
Lena Brands also owns the remaining two locations of the 78-year-old Coco’s restaurant chain in Mission Hills and Redlands, Calif. The chain, at its peak, had about 300 Coco’s locations in the Southwest, according to the San Luis Obispo Tribune.
The Dallas-based restaurant chain’s owner did not indicate in its petition why it filed for bankruptcy protection. Lena Brands is 100% owned by Samuel Nicolas Borgese, according to court papers.
Shari’s, which faced financial difficulties since the Covid-19 pandemic, on Oct. 20, 2024, closed all of its Oregon stores, which amounted to 42 locations at the beginning of 2024.
Shari’s closed all Oregon restaurants
The restaurant chain closed its Oregon units, as it reportedly faced mounting financial issues, such as eviction notices, unpaid bills, and back taxes.
Borgese, who was also CEO of the chain at that time, confirmed the closings in an email to the Oregon Lottery on Oct. 21, 2024, KGW 8-TV reported at the time.
The restaurant chain was sued by about 15 landlords of its closed locations in Oregon for alleged nonpayment of rent before it shut down the units, KGW 8-TV reported on Dec. 31, 2024.
At least five of the locations were marketed for sale or lease in March 2025, according to KPTV.
FAT Brands filed for bankruptcy protection
Financial distress also derailed one of the largest owners of casual and fast-food restaurant chains, FAT Brands Inc., which filed for Chapter 11 bankruptcy on Jan. 26, 2026, seeking to restructure $1.26 billion in debt.
FAT Brands owned 18 restaurant chains when it filed for bankruptcy, including casual dining chains Ponderosa Steakhouse & Bonanza Steakhouse, casual dining sports bar Twin Peaks, Yalla Mediterranean, Fazoli’s Italian, and Smokey Bones Bar & Fire Grill.
The bankruptcy filing led to the demise of Smokey Bones, as the chain closed 15 underperforming locations and converted 19 units to Twin Peaks restaurants. All Smokey Bones locations had closed by the end of April 2026, WSYX-TV reported.
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