Red Lobster will be forced to shut down more than 100 additional restaurants if it fails to renegotiate cheaper rent for the buildings after it filed for bankruptcy, according to court documents.
After the restaurant chain closed down 93 of its approximately 700 locations and filed for Chapter 11 bankruptcy this month, it now risks closing 135 locations due to expensive leases, Restaurant Business reported.
Breitbart reported:
“The company reportedly filed for bankruptcy while having $300 million in debt, blaming its poor financial situation on inflation, failed promotions such as the $20 all-you-can-eat shrimp deal, and the cost of rent.
Red Lobster’s 22-year-old lease at the iconic Times Square location in New York is reportedly being doubled to $2.2 million a year, the New York Post reported.
While the company is attempting to hold on to the long-standing location, they only have a few weeks to agree to the new lease before it’s set to begin on June 30.“
Danville, Illinois, Mayor Rickey Williams Jr. expressed dismay following the closures earlier this month.
“I was just notified by one of our local Red Lobster managers that after 31 years of serving our community, without notice, their parent company laid off the entire crew and closed the restaurant effective immediately,” Williams wrote.
“This is despite the fact that they were rated number 15 out of over 600 stores for customer service & satisfaction last year. They also shuttered nearly 120 other stores without notice,” Williams added.
The parent company’s decision to close the restaurants comes as it prepares to auction off more than 50 sites across the U.S.
Restaurant liquidation company TageX Brands announced that it will oversee the sale of equipment from the closed restaurant, describing it as the “largest restaurant equipment auction ever.”
TageX wrote on its website:
“As of today, select Red Lobster locations are CLOSED. On our Restaurant Equipment marketplace, we are auctioning off 50+ locations nationwide.”
“These auctions are WINNER TAKES ALL – meaning, each winner will receive the ENTIRE contents of the Red Lobster location they bid on. Auctions are live and will end periodically on Thursday, May 16, 2024.”
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