Legendary Sandwich Shop Just Filed for Bankruptcy
The list of iconic restaurants that are struggling in 2024 continues to grow. Following nearly 80 years in business, a beloved sandwich shop has declared bankruptcy after racking up sizable debt.
This struggling eatery is Brocato's Sandwich Shop, a Tampa, Fla., institution known for its Cuban sandwiches, stuffed potatoes, and devil crabs (aka crab meat croquettes). Court documents show that it filed for Chapter 11 bankruptcy protection earlier this month after facing a "substantial" decline in revenue during the COVID-19 pandemic, QSR Magazine reported.
Since then, the company has struggled to keep up with payments to vendors and other parties. It owes $700,000 to the Florida Department of Revenue, $21,000 to Gordon Food Service, $4,000 to the IRS, and about $676,700 to various unsecured creditors. Meanwhile, it lists just $14,595.89 in assets.
In good news for its fans, however, the Chapter 11 bankruptcy will allow the legendary shop to continue operating as it reshuffles its debt. The court documents said Brocato's wanted to prevent the Florida Department of Revenue from canceling its sales tax permit and block creditors from freezing its bank accounts through the filing.
One promising sign is that Brocato's sales have begun to rebound since the pandemic. It earned $1.75 million in gross revenue in 2022 and $2.02 million in 2023, respectively. The shop has also brought in $741,000 so far in 2024. Brocato's attorney Jonathan Semach told the local news outlet 10 Tampa Bay last week that "revenues are still strong and we feel pretty strong and pretty comfortable that we will emerge successfully" from the bankruptcy.
Brocato's is only the latest struggling restaurant concept to resort to bankruptcy since the start of 2024. The beloved Portland, Ore.-based ramen chain Boxer shuttered all locations in late April after its parent company filed for Chapter 11 bankruptcy protection back in February. Like Brocato's, Boxer attributed the decision to financial struggles during the pandemic and inflation.
Other restaurant chains and food concepts that have gone bankrupt this year include the Florida-based Tex-Mex chain Tijuana Flats, the Midwestern ice cream and dairy brand Oberweis Dairy, the New York-based chicken chain Sticky's Finger Joint, and the parent company of upscale grocery chains Dom's Kitchen & Market and Foxtrot Market.
Perhaps the most notable restaurant bankruptcy of all in 2024, however, impacts Red Lobster. The seafood chain announced a Chapter 11 bankruptcy filing on May 19 to "address several financial and operational challenges," in the words of CEO Jonathan Tibus.
Red Lobster has struggled in recent years with high food and labor costs, significant operating losses, and dozens of restaurant closures. Its owner, the seafood company Thai Union Group, announced plans to divest from the chain in January due to its "prolonged negative financial contributions."
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