Red Lobster in South Carolina on list of restaurants the company plans to close (2024)

FAQs

Why is Red Lobster closing locations? ›

Mismanagement, competition, inflation and other factors brought down Red Lobster, which has been a pioneer in the restaurant industry. Thai Union, a global seafood supplier, became Red Lobster's leading shareholder in 2020 and filed for bankruptcy four years later in May.

Red Lobster could close more than 100 additional restaurants if it's unable to renegotiate their leases, according to bankruptcy documents filed this week. In the filings, Red Lobster lists 228 rejected leases that the company has determined will keep losing money if they continue operating as-is.

"Filing for bankruptcy does not mean we are going out of business," reads part of the statement. "In fact, it means just the opposite. It is a legal process that allows us to make changes to our business and our cost structure so that Red Lobster can continue as a stronger company going forward."

This move follows the closure of over 100 Red Lobster locations earlier this summer, bringing the total number of restaurants operating down to approximately 500—a stark contrast to the 650 locations that were open last year.

Almost 20 years later, Darden Restaurants sold Red Lobster to Golden Gate Capital in 2014. Thai Union, which previously had a one-fourth stake in the company, bought out Golden Gate's stake in the company in 2020.

Red Lobster later became part of Darden Restaurants, the owner of Olive Garden and other chains. In 2014, Darden sold off Red Lobster to Golden Gate Capital, a private equity firm, for $2.1 billion. Since 2020, seafood distributor Thai Union Group, based in Thailand, has been the largest Red Lobster shareholder.

Red Lobster declared Chapter 11 bankruptcy and they are planning to restructure as a company. Red Lobster is not closing all of its restaurants but they have closed several dozen, and they have about 600 total. They are seeking bankruptcy protection basically to deal with nearly $300 billion in debt to their creditors.

Red Lobster has the franchise fee of up to $9,500, with a total initial investment of $9,500.

TUG confirmed a $12.5 million operating loss for Red Lobster in the third quarter of 2023, with the “Ultimate Endless Shrimp” deal identified as a key culprit. TUG itself suffered an awful Q4 in 2024 as a whole, losing some $477 million from all its companies.

Red Lobster plans to close locations in Fort Walton Beach, Pensacola and Port Richey.

Is Red Lobster close to getting a new owner in Fortress Credit Corp? ›

Red Lobster is in the process of selling itself to Fortress Credit Corp., a lender experienced in restaurant management that also owns Krystal, Logan's Roadhouse and J. Alexander's. The firm recently gave the seafood chain a $100 million loan to allow it stay afloat.

Some American businesses have stopped selling lobster because of concerns that fishing methods could harm endangered whales. Several food companies announced they had removed lobster offerings to the public.

Lakeland, FL

Red Lobster / Place founded

But that money didn't go back into Red Lobster; it went instead to the private-equity firm to finance its purchase of the chain, Red Lobster's press release said. That firm was San Francisco-based Golden Gate Capital, with $10 billion in assets.

Some retailers are taking lobster off the menu after an assessment from an influential conservation group that the harvest of the seafood poses too much of a risk to rare whales and should be avoided.