Another craft beer, restaurant chain files Chapter 11 bankruptcy

According to The Street , Craft-beer-themed restaurants, such as BJ’s and Yard House, have found success by pairing craft beers with a variety of food options, catering to a growing demand for both quality brews and diverse dining experiences.

BJ’s, which started in 1978 as a Chicago deep-dish pizza joint in Southern California, has evolved into a prominent craft beer destination. The chain now operates around 216 locations nationwide. Yard House, founded in 1996 in Southern California, also offers a large selection of craft beers, with over 100 beers on tap, and has expanded to approximately 88 locations across the U.S. Both chains have established themselves as successful players in the U.S. craft beer restaurant scene.

BJ’s reported strong earnings on July 25, exceeding analysts’ expectations. While its stock initially surged by 10%, rising to $38.87 on July 23, it has since fallen back to $29.49 due to broader economic concerns. Yard House, owned by Darden Restaurants, has similarly faced market challenges but remains a key player in the craft beer restaurant market.

In contrast, smaller craft beer chains have struggled significantly since the Covid-19 pandemic, grappling with rising interest rates, higher operating costs, and inflation, all while dealing with reduced consumer traffic due to economic pressures.

Melt Bar & Grilled, a regional craft beer and grilled cheese restaurant chain based in Lakewood, Ohio, filed for Chapter 11 bankruptcy on June 14. The chain, founded in 2006 by Matt Fish, has faced financial strain due to rising food and labor costs, as well as lawsuits from landlords. Melt had expanded to 14 locations by 2017 but had to downsize after the pandemic’s financial impact. It currently operates six locations and has satellite establishments at Cleveland Guardians’ Progressive Field and Case Western University.

Other smaller craft beer chains have also filed for bankruptcy this year. Zydeco Brew Works in Ybor City, Florida, filed for Chapter 11 in January and closed its flagship Tampa location. Griffin Claw Brewing Co., based in Michigan, filed for Chapter 11 on July 26 due to an ownership dispute, while avoiding litigation.

World of Beer, a competitor to BJ’s and Yard House, also filed for Chapter 11 bankruptcy protection on August 2, 2023. The Tampa-based chain, known for its vast selection of craft beers and bar food, cited rising interest rates, increasing lease obligations, inflation, and slow post-pandemic recovery as factors contributing to its financial struggles. The company’s bankruptcy petition, filed by parent company WOB Holdings, lists between $10 million and $50 million in assets and liabilities, including over $25.6 million owed to Synovus Bank.

Founded in 2007, World of Beer once boasted 75 locations in 20 states, including an international franchise in Shanghai. However, the company has since closed more than half of its locations, with 34 remaining. In the year leading up to its bankruptcy filing, it shuttered 14 locations. Some of its former franchises have since been rebranded, such as the three locations in Virginia that became Crafthouse in 2017.

Despite these challenges, craft beer-themed restaurants continue to be a significant part of the dining landscape, though many smaller chains face tough financial hurdles.