I texted my sister last month when I saw our childhood On The Border had shut its doors, half expecting her to share my instinct to blame the obvious villain of every economic conversation right now: tariffs. She didn't take the bait. "Isn't that the one private equity bought a while back?" she asked. I didn't have an answer, but I went and found one, and it turns out my sister's instinct was closer to the truth than mine.

Let's start with the headline that keeps circulating, because it's technically accurate and still genuinely misleading. A striking number of familiar restaurant names have filed for bankruptcy or shut down entirely since early 2025: On The Border, TGI Fridays, Smokey Bones, Abuelo's, Bar Louie, Bravo Brio, Iron Hill Brewery, K&W Cafeterias, MOD Pizza, and more. Adding in the hundreds of underperforming locations Starbucks, Wendy's, Denny's, and Jack in the Box are quietly trimming, and it's easy to assemble a narrative that the current economic climate, tariffs on imported food and supplies chief among the usual suspects, is single-handedly gutting the restaurant industry. I believed that narrative myself, at least until I dug into the individual case files behind each closure.

Here's the counterintuitive part, and I think it deserves far more attention than it's getting: Restaurant Business Online, an industry trade publication that tracks this data closely, reports that the overall number of U.S. restaurant closures was near record lows in 2025. Read that again, because it directly contradicts the doom narrative dominating social media feeds. This isn't a story about the restaurant industry collapsing broadly. It's a story about a specific, identifiable category of restaurant, heavily leveraged, private-equity-owned chains carrying debt from before this administration ever took office, finally buckling under weight that had been building for years.

Look closely at the actual bankruptcy filings, and a pattern emerges that has almost nothing to do with trade policy. TGI Fridays filed for Chapter 11 back in November 2024, before Trump's inauguration, its troubles rooted in a debt-heavy ownership structure and declining casual dining traffic that predates any tariff conversation entirely. On The Border's bankruptcy filing explicitly cited a "severe liquidity crisis" driven by high lease costs, labor costs, and food prices, a combination that reflects years of post-pandemic operating pressure, not a single policy shift. Bar Louie filed for bankruptcy for the second time in five years, meaning its underlying business model was already failing well before this administration's trade agenda existed. Bravo Brio's Chapter 11 filing was also its second in five years. These are chains with chronic, structural problems, not casualties of a specific tariff line item.

I want to be fair to the other side of this argument, because tariffs genuinely aren't irrelevant here, and I don't want to overcorrect into dismissing them entirely. Rising food and supply costs, some tied to tariffs on imported ingredients, packaging, and equipment, are real pressure squeezing restaurant margins across the industry, and several of these bankruptcy filings do mention food costs among their contributing factors. Labor costs and high interest rates, both of which have genuine ties to broader economic policy, have also made it harder for thinly capitalized restaurant groups to refinance debt or absorb rising costs the way they might have in a lower-rate environment. It would be dishonest to claim economic policy plays zero role in this wave of closures. But playing a role in a broader squeeze is very different from being the primary cause, and the data simply doesn't support treating tariffs as the headline explanation.

What the data supports is a story about private equity's role in the restaurant industry that gets far less attention than it deserves. On The Border was owned by Argonne Capital Group. The Hardee's franchisee that simply walked away from 77 locations after falling behind on royalty payments was owned by the same private equity firm behind Quiznos and Church's Chicken and had acquired those Hardee's locations just two years earlier from a franchisee that had also gone bankrupt. That's not a company struggling under tariff pressure. That's a recurring pattern of financial engineering, acquiring distressed assets, loading them with debt, and walking away when the math stops working, regardless of which administration happens to be in office when the bill comes due.

So why does the tariff narrative feel so much more compelling than the private equity one? I think it's because tariffs offer a single, easily understood villain in a moment when everything already feels expensive and confusing, while "over-leveraged private equity ownership structures" is a genuinely harder story to tell over a text message to your sister. But I think Americans deserve the harder, more accurate story, because it points toward very different solutions. If tariffs were truly driving this wave of closures, the fix would be straightforward: adjusted trade policy. If the real driver is private equity firms extracting value from restaurant chains while loading them with unsustainable debt, that's a structural problem requiring entirely different scrutiny, the kind aimed at how these acquisitions are financed and regulated in the first place.

So, what does this mean for the person who just watched their own favorite local chain location go dark? It means the closure probably has less to do with the price of imported ingredients than with decisions made in a private equity boardroom years before any tariff was ever announced. It means blaming trade policy for every empty storefront lets the actual architects of these bankruptcies, the debt-driven ownership structures behind chains like TGI Fridays and On The Border, escape the scrutiny they've genuinely earned. And it raises a question worth sitting with the next time a beloved chain disappears from your neighborhood: are we asking who actually owns these restaurants and how they got so deep in debt, or are we settling for the simpler, more satisfying villain that fits neatly into a single news cycle? My sister asked the right question outside that shuttered On The Border. I just wish more of the coverage I'd read before that moment had asked it first.

Restaurant Chains Are Closing by the Hundreds, But Tariffs Aren't Really the Main Reason

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