NEW YORK — In Woodbridge, Virginia, LongHorn Steakhouse will take over an old TGI Fridays. In Watertown, New, York, a former Red Lobster is being converted to a Northern Credit Union bank . And Chick-fil-A is taking over a shuttered Red Lobster in Naples, Florida.
Vacant restaurant chains are creating prime real estate for a wide range of companies looking for spots to grow, especially fast-food chains that want to install drive-thru lanes on spots where diners once sat down for dinner. Chains like Red Lobster and TGI Fridays filed for bankruptcy this year and closed more than 175 restaurants combined. Red Lobster was driven into bankruptcy by mismanagement under a previous owner, global shrimp supplier Thai Union, while TGI Fridays fell under private equity owner TriArtisan Capital Advisors.
Denny’s is also closing 150 restaurants. All three typically cater to low- and middle-income customers, and the chains have also been struggling because their customers are squeezed. Diners are opting to eat at home or at cheaper fast-food and fast-casual chains such as Chick-fil-A and Chipotle, which can be more profitable to run than sit-down table service.
A Red Lobster in Fairfax, Virginia, in June. Red Lobster real estate is proving to be appealing to other chains. “Family dining has had it the worst post-pandemic,” Denny’s CEO Kelli Valade said on an earnings call last month.
Customer traffic to full-service restaurants like Denny’s has dropped 0.5% so far this year, wh.