bannerFranchise News

Bar Louie Closes Down 38 Stores and Files for Bankruptcy, Owing $110 Million to Creditors

The pub chain is looking at a “stalking horse” acquisition from lenders.

By Allison Stone1851 Contributor
Updated 9:09AM 01/29/20

After closing nearly a third of its locations, it looks like Bar Louie is up for sale. With 134 bars in 26 states, the concept’s popularity has been waning in spite of its somewhat wide reach according to Restaurant Business Online. The pub chain filed for Chapter 11 bankruptcy protection, and lenders will be acting as “stalking horse” bidders on the acquisition, meaning that they will buy the company at very low prices provided no other bidders follow through.

Bar Louie is a holding of Sun Capital Partners, a private equity firm that is invested in other franchises including Johnny Rockets, Friendly’s and Boston Market. In 2019, Friendly’s closed 23 locations across the Northeast while Boston Market also closed 45 locations.

These waves of restaurant closures aren't anything new. Pizza Hut, Steak n Shake and others are among many concepts that are either shuttering massive numbers of locations or revamping existing restaurant models to accommodate for new trends in the industry including food halls, delivery and takeout

So why is takeout so trendy? For years, business publications like Forbes have been reporting on the consumer trends of the “time-starved and convenience-seeking” millennial. People just don’t have the free time to dine out like they used to, and concepts like Bar Louie are feeling the loss. Restaurant Business Online proposed that most of Bar Louie’s 100 corporate units were established near malls, another establishment that has suffered in the age of e-commerce. 

“The inconsistent brand experience coupled with increased competition and the general decline in customer traffic visiting traditional shopping locations and malls, resulted in less traffic” at stores located near the retail complexes,” said the filing as reported by Restaurant Business Online. Brand leadership hopes that the pending sale through filing Chapter 11 bankruptcy will give Bar Louie a chance to focus its energy on maintaining success in profitable locations. 

Read the full story here.