58-year-old casual restaurant chain shut down 163 locations

Casual dining chains have been analyzing their restaurant portfolios and eliminating underperforming locations and those that have above-market rents that no longer make economic sense.

Rent increases, shrinking sales, and rising costs led Applebee's owner Dine Brands to close at least 15 locations in 2026 with plans to shutter 20 to 35 of its 1,500 locations. Ruby Tuesday, which operated as many as 945 locations in 2007, has closed over 770 locations.

Another casual restaurant competitor, Red Robin Gourmet Burgers Inc., said it plans to close 20 restaurants in 2026 as leases expire. The company is not certain of the total number of restaurants it will close.

"At this time there is no confirmed number for potential closures, as the company is continuing to work on performance and could continue to see that number decrease," a Red Robin spokesperson told TheStreet in an email.

And now, popular seafood dining chain Red Lobster is closing more locations nearly two years after emerging from bankruptcy, as it will shutter its restaurants in Montgomery and Huntsville, Ala., on Sept. 6, The Financial reported.

Red Lobster currently operates 524 locations in 43 states and 4 provinces, consisting of 497 U.S. and 27 units in Canada, according to the company's website on Aug. 29. The company held 687 leases when it filed for Chapter 11 bankruptcy on May 13, 2024, according to a declaration by the debtor's CEO at the time, Jonathan Tibus .

Red Lobster rejected leases and eventually closed about 163 locations among its 687 leases. The restaurant chain had 551 locations operating with about 34,000 employees on the day it filed for bankruptcy, according to the declaration.

The seafood chain will have 522 total locations with 495 in the U.S. after it closes the two Alabama restaurants.

The Orlando, Fla.-based dining chain, which was founded in 1968 by Bill Darden in Lakeland, Fla., had 545 locations in the U.S. and Canada when it exited bankruptcy on Sept. 16, 2024, with new owners, RL Holdings LLC .

The ownership group is an entity created by funds managed by Fortress Investment Group LLC and co-investors TCW Private Credit and Blue Torch, according to a statement on the bankruptcy exit.

"As part of our new ownership structure, we have backers who have a history of making successful investments in restaurants," Red Lobster's new CEO at the time Damola Adamolekun said in the 2024 statement.