5 Restaurant Chains That Almost Made It Big Before Crashing and Burning
Even McDonald's, the biggest fast-food chain in the U.S, has an unassuming origin story. It started as a single San Bernardino location, opened by two brothers who were taken for a ride by a slick out-of-towner peddling franchises cross-country–some of America's other budding restaurants were even less lucky.
On the cusp of a breakthrough, these chains ended up falling off the map rather than hitting it big. Once loved for their quirks or great food, they became outdated or garnered a bad reputations before even breaking out.
These brands saw the beginnings of growth but never quite made it to national ubiquity. And some are still working on their comeback tours.
Here's a look at what happened to these B-listers of the restaurant world.
Hale and Hearty
For many years you could see New Yorkers piling into Hale and Hearty restaurants during lunch hours. The restaurant was a staple that catered to busy office workers with a rotating lineup of fresh soups, wraps, salads, and more. At its peak in 2015, the eatery had grown to 34 stores and was hailed as the "next Panera Bread."
But it wasn't quite meant to be. In early July, Hale and Hearty quietly closed the doors at all of its locations after 20 years in business. While the company posted signs that noted closures were temporary, there is still no indication if and when these restaurants will reopen.
Bad business mixed with the hardship of the pandemic seemed to be the root cause. The chain had a history of opening in desirable, high-rent locations, but struggling to pay pricey Manhattan leases.
Bar Louie had a lot of promise in the 1990s when it first opened its doors in Chicago. A hip gastropub with heaping portions of food and an edgy atmosphere—it was a recipe for success.
Over the next decade, the restaurant expanded its footprint across the country, reaching 44 locations in 2010. Its fame caught on and the concept was sold to investors who began franchising the chain—topping it off at 140 Bar Louie restaurants.
The growth proved unsustainable, however. And at the dawn of 2020, Bar Louie closed 38 locations as it declared bankruptcy, blaming "inconsistent brand experience."
Currently, there are 69 Bar Louie locations left, although the chain has been able to report a profitable year in 2021.
Joe's Crab Shack
By 2014, you couldn't vacation in a beachside town without seeing tourists sporting tie-dye Joe's Crab Shack T-shirts from the restaurant's merch store. With a dining experience that had servers dancing on the tables, the chain capitalized on family fun and hit its peak at 140 locations in 2014.
In the late aughts, the brand vowed to stop using trans fats in its foods. And although the promise was made, Joe's Crab Shack secretly still used it, until it was called out by the Center for Science in the Public Interest (CSPI) in 2014, which warned customers against eating there.
If that wasn't bad enough, the Joe's came under fire for labor law violations, not tipping its employees (who were literally made to dance for customers), and a photograph of a lynching being used as part of the kitschy décor at one Minnesota location.
For many, especially in Texas, a meal at one of Luby's Cafeterias was a Sunday family tradition. Its famous LuAnne platter is a combo meal that includes a main dish, two sides, and a roll, and is a relic of pop culture in restaurant chains.
Currently, about 32 Luby's locations are still operating although the cafeteria restaurant was on thin ice back in 2020. Months of financial turmoil caused the parent company of Luby's Cafeteria to announce it was going out of business and would permanently close all its locations by June of 2022. However, a buyer successfully scooped it up and it managed to keep operations afloat for now.
Prior to that, the cafeteria was the talk of the town. In the 1990s, Luby's had 231 cafeterias, with Forbes Magazine naming it among the top 200 Best Small Companies for eight years running. Around the same time, Kiplinger's Personal Finance Magazine included Luby's on its list of "39 Stocks for Your Portfolio."
Marie Callender's restaurant had all the promise that a nationally-known brand of frozen pies could hope for. However, its restaurant portion of the business, which first opened its doors in 1964, never quite took off as well as its namesake grocery product.
At its peak in 2006, the chain had 138 eateries. Only a decade later, the chain closed its original location and the following year it was reduced to 57 restaurants. Today, there are fewer than 30 Marie Callender's remaining.
The chain split from its sister company Perkins Restaurant & Bakery, which filed for bankruptcy in 2011.
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