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Financially strapped dining chains often turn to business lenders for loans to buy time to turn around their operations.
Certain restaurant owners are able to cure their economic problems and continue operating, but others who fail to reverse their financial distress will need to close restaurant locations, lay off employees and file for bankruptcy protection.
Recent restaurant closings and bankruptcies have been attributed to severe financial problems, that in certain cases, led to defaults on business loans and other types of financing, such as merchant cash advances.
Among the businesses that filed for bankruptcy after defaulting on merchant cash advances were a Subway franchisee MTF Enterprises LLC, which filed for bankruptcy on Jan. 21, 2026, and The Fireman Group of Cafe Concepts Inc., a restaurant chain that includes iconic Café Fiorello locations in New York and Washington, D.C., which filed for Chapter 11 bankruptcy on Aug. 9, 2026.
