Italian chain closes 50 restaurants after Chapter 11 bankruptcy

Ask people to picture their favorite food, and creamy pasta, hot pepperoni pizza, and indulgent gelato beat out sushi, tacos, and even McDonald’s.

Italian food consistently ranks as the world’s most popular cuisine, edging out Chinese and Japanese in global surveys. A 2019 YouGov poll of more than 25,000 people across 24 countries put Italian in first place among 34 national cuisines.

But popularity hasn’t been enough to shield Italian restaurants from rising labor and food costs. Over the past few years, some of the biggest names in the category have filed for Chapter 11 bankruptcy, from Bravo Brio to Pizza Hut, Bertucci’s, and Buca di Beppo.

Earlier this year, I reported that fast-casual chain Fazoli’s had joined that list. In January 2026, its parent company, California-based FAT Brands Inc., filed for voluntary Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of Texas.

Now, Fazoli’s is closing restaurants across the country, and the numbers are worse than most people realize. 

Fazoli’s closes 4 more restaurants across 3 states 

Fazoli’s recently closed its restaurant in Battle Creek, exiting the West Michigan market completely, reported WoodTV. 

The restaurant, located at 5445 Beckley Road near Riverside Drive, was the chain’s last location in West Michigan. A spokesperson for FAT Brands confirmed the closure to the outlet on July 28. 

Following this closure, Fazoli’s remained with only two more restaurants in the Great Lakes State, down from seven it had in November 2025, according to the company’s official restaurant locator. 

2 remaining Fazoli’s in Michigan

• 1500 North West Avenue, Jackson

• 5705 South Cedar Street, Lansing 

In July 2026, Fazoli’s also shuttered one of its locations in Lincoln, Nebraska, leaving only three restaurants in the Cornhusker State, reported 10 11 Now. 

The restaurant at 4603 Vine Street near N. 46th Street closed on July 20. A sign on the front door read: “We regret to announce that Fazoli’s in Lincoln is permanently closed. We want to thank our guests and our community for your business.” 

3 remaining Fazoli’s in Nebraska

• 2434 S. 132nd Street, Omaha

• 8002 Cass Street, Omaha

• 2012 Pratt Avenue, Bellevue 

Earlier this year, Fazoli’s also closed two more Central Kentucky locations. According to a Lexington Herald Leader report from May, the restaurant at 3775 Harrodsburg Road in the Palomar shopping center and the one at 1016 N. Main Street in Nicholasville have closed their doors for good. 

Following these closures, Fazoli’s retains 26 restaurants in the Bluegrass State in Ashland, Bowling Green, Danville, Elizabethtown, Florence, Frankfort, Georgetown, Hazard, Henderson, Lexington, London, Louisville, Madisonville, Morehead, Murray, Owensboro, Paducah, Paintsville, Pikeville, Richmond, Somerset, and Winchester. 

Fazoli’s closes 50 restaurants in 9 months, exits 1 state entirely 

Using a web archive, TheStreet tracked precisely how many Fazoli’s restaurants have closed over the last nine months. 

According to the company’s official location directory, there were 142 Fazoli’s restaurants across the United States on Aug. 17, 2026. A web archive screenshot from Nov. 5, 2025, shows 192 restaurants. 

The data suggest that over the last nine months, Fazoli’s has closed a total of 50 restaurants, exiting Alabama entirely. 

Indiana lost the most restaurants, at 11, with 18 remaining. States that now have only one Fazoli’s restaurant include California, Mississippi, North Carolina, Oklahoma, South Dakota, and Virginia. 

Fazoli’s locations by state

Store counts on Aug. 17, 2026, vs. Nov. 5, 2025

What sets Fazoli’s apart from other Italian restaurants? 

There are approximately 44,848 Italian restaurants across the United States, generating around $112.5 billion in revenue annually, according to data from IBIS World. 

Here’s what differentiates Fazoli’s from major players like Olive Garden and Domino’s Pizza: 

• Service model: Fazoli’s is a quick-service restaurant built around drive-thru speed, delivering pasta, baked dishes, and sides in minutes, reported TheTakeout. 

• Lower average ticket: A 2026 analysis of major Italian-inspired chain restaurants calculating the mean or average cost of six categories (appetizers, entrées, side dishes, desserts, drinks, and kids’ meals) concluded that Fazoli’s prices are the most affordable, according to TastingTable. 

• Breadstick superiority perception: Fast-casual food analyses often highlight that Fazoli’s breadsticks, baked continuously in small batches and heavily brushed with garlic butter, routinely beat Olive Garden in consumer taste tests, as reported by Chowhound. 

Aside from breadsticks, Fazoli’s menu offerings include freshly prepared pasta entrees, sub sandwiches, salads, pizza, and desserts. The restaurant was founded in 1988, in Lexington, Kentucky, aiming to offer high-quality Italian food quickly and conveniently. 

Its core motto was “Fast. Fresh. Italian.” 

“At Fazoli’s, we promise more than just a meal; we offer an experience where every guest is an integral part of our family. Here, breaking breadsticks is not just a tradition; it’s an invitation to savor every delicious moment. Join us at Fazoli’s, where every visit is a memorable chapter in our shared story of Italian delight,” reads Fazoli’s Our Story page. 

From one restaurant in Kentucky, Fazoli’s grew into a nationally recognized brand. At its peak, it had 208 locations across 28 states, becoming one of the largest quick-service Italian chains in the U.S. 

Why has Fazoli’s been closing so many restaurants? 

On Jan. 26, FAT Brands, which owns a portfolio of 18 restaurant concepts with more than 2,200 locations worldwide, including Fatburger, Johnny Rockets, and Round Table Pizza, among others, filed for Chapter 11 bankruptcy. 

“Our dynamic portfolio of brands has demonstrated tremendous resilience in a challenging restaurant operating environment over the last few years. We are well positioned for long-term profitability and growth. The Chapter 11 process will provide us with the opportunity to strengthen our capital structure to support our concepts and ensure they remain at the forefront of their sectors,” stated FAT Brands CEO Andy Wiederhorn.

Related: McDonald’s says it alienated its most loyal customers 

FAT Brands has been overwhelmed by debt tied to securitized borrowings. Its total debt was estimated at around $1.5 billion to $1.58 billion due to leveraged acquisitions and financing strategies.

The company planned to use the filings to deleverage its balance sheet, maximize value for its stakeholders, and support continued growth of its brands. 

The restaurant operator had already closed 32 locations before filing for bankruptcy protection, reported TheStreet’s Kirk O’Neil. 

Under its Chapter 11 bankruptcy process, FAT Brands has been closing select restaurants across the Fatburger, Smokey Bones, and Fazoli’s brands. 

Fazoli’s officially gets new owners 

In June 2026, FAT Brands, or at least most of what it once held, secured new owners. FBG Bid Co., an entity composed of some of the previous bondholders of the bankrupt company, bought several of its restaurant chains in a $595 million credit bid. 

The transaction included 13 restaurant brands spanning more than 1,700 locations worldwide: Round Table Pizza, Fatburger, Marble Slab Creamery, Johnny Rockets, Fazoli’s, Great American Cookies, Buffalo’s Cafe & Express, Hurricane Grill & Wings, Pretzelmaker, Native Grill & Wings, and Ponderosa and Bonanza Steakhouses, according to the official press release. 

Why are Italian restaurants struggling? 

While there are challenges unique to Italian restaurant chains, there are also widespread obstacles facing the entire restaurant industry in the United States. Namely, more than nine in 10 operators cite food, labor, insurance, energy, and swipe fees as the biggest challenges, according to National Restaurant Association. 

Moreover, 42% of restaurant operators confirmed their restaurant was not profitable in 2025. It is important to note that consumer demand remains strong, but their spending power is limited, affecting overall foot traffic and average spending. 

Italian restaurants also face additional challenges, including:

• Shift in consumer preferences: “Sales in Italian restaurants are declining as customers explore other global cuisines, creating a business surge for restaurants offering diverse culinary experiences,” according to an IBIS World July 2026 report. 

• High volatility of ingredient prices: Italian cuisine relies heavily on wheat (pasta), cheese, and specialized oils, categories that have seen some of the most fluctuating raw ingredient prices, “ultimately affecting profitability and manufacturing costs,” Fortune Business Insights noted. 

Rising input costs and supply disruptions have significantly affected pizza kitchens, “from tariffs on imported cheese to pandemic-era shocks in food production.” In fact, in 2025, purchases of food and beverages accounted for about 23.4% of revenue at the average pizzeria, according to an MMCG Invest report. 

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This story was originally published by TheStreet on Aug 17, 2026, where it first appeared in the Restaurants section. Add TheStreet as a Preferred Source by clicking here.