BIG UPDATE: Another craft beer, restaurant chain files Chapter 11 bankruptcy
Craft-beer-themed restaurants like BJ’s and Yard House have thrived by pairing their extensive beer selections with diverse food offerings. BJ’s started in 1978 as a Chicago deep-dish pizza joint in Southern California and later pivoted to craft beer. Similarly, Yard House launched in 1996 in Southern California, boasting over 100 beers on tap.
Currently, BJ’s operates about 216 locations nationwide, while Yard House has around 88 locations across the U.S.
Earnings Reports and Economic Pressures
On July 25, BJ’s reported earnings that exceeded analysts’ expectations. Although shares rose as much as 10% to $38.87 on July 23, they later fell to $29.49 amid broader stock market pressures due to economic slowdown fears. Yard House is owned by Darden Restaurants.
Struggles for Smaller Craft Beer Chains
In contrast, many smaller craft beer restaurant chains have struggled since the Covid-19 pandemic, grappling with rising interest rates, inflation, and declining customer traffic due to economic challenges.
One such regional chain, Melt Bar & Grilled, filed for Chapter 11 bankruptcy protection on June 14 in the U.S. Bankruptcy Court for the Northern District of Ohio. Founded in 2006 by Matt Fish, Melt specializes in gourmet grilled cheese sandwiches and craft beers, including a vegan menu. The chain, which once had 14 locations, faced financial difficulties exacerbated by increased food and labor costs and lawsuits from landlords.
Melt currently operates six locations in Ohio and has satellite spots at Progressive Field and Case Western University in Cleveland.
Other Bankruptcy Filings in the Craft Beer Sector
This year, other craft beer establishments have also filed for Chapter 11. Zydeco Brew Works in Ybor City, Florida, filed for bankruptcy in January, leading to the closure of its main brewery and restaurant. Griffin Claw Brewing Co., based in Michigan, filed for Chapter 11 on July 26 amid an ownership dispute.
World of Beer Files for Chapter 11
Now, World of Beer, a competitor to BJ’s and Yard House, has filed for Chapter 11 bankruptcy on August 2 to reorganize, cancel leases, and eliminate debt. The company’s parent, WOB Holdings, along with 11 affiliates, submitted their petition in the U.S. Bankruptcy Court for the Middle District of Florida, citing rising interest rates, lease obligations, and increased operating costs as contributing factors.
The debtor reported assets and liabilities ranging from $10 million to $50 million, including over $25.6 million owed to Synovus Bank. Founded in 2007, World of Beer expanded to as many as 75 locations in 20 states by March 2016, even opening a franchise in Shanghai, China. However, the company has since closed more than half its locations and currently operates 34.
In some instances, instead of shutting down, World of Beer locations have been rebranded. In May 2017, three franchise locations in Virginia were rebranded as Crafthouse by their owner Evan Matz.
Also Read: $766 for families of 3 receiving SNAP benefits through September 23
