As in other industries, rankings in the restaurant industry change over time as chains grow, contract, compete for limited consumer demand and, at times, fail. While Subway, for example, was once the largest restaurant chain in the world, it was officially overtaken by McDonald’s last year and will most likely be overtaken by Starbucks in the near future.
Needless to say, the world of chain restaurants has looked very different over the past 50 years, and many beloved chains have closed along the way. The biggest restaurant chains of decades past are not the same as the biggest restaurant chains of today. In an industry with a 30% failure rate, many restaurant chains that once dominated the American restaurant scene are a distant memory. In fact, America’s reigning restaurant chain of the 60s and 70s just closed its last location last year.
Here are six of the nation’s biggest restaurant chains that are no longer. No one is too big to fail!
You’re probably familiar with Chi-Chi’s salsa, but what you might not know is that the name was inspired by a chain of tex-mex restaurants from the 70s. Chi-Chi’s was born in 1975 in downtown Minneapolis, just south of the Canadian border. The chain, famous for its fried delicacies, including chimichangas, has grown rapidly. Two decades after its inception, it had 210 locations across the United States.
But increased competition and unfortunate events, like a major food poisoning scandal, led to the end of the chain’s reign. Other Tex-Mex chains have started vying for a slice of the pie, including On the Border and Taco Bell. Chi-Chi’s didn’t have the same success in the rest of the country as it did in the Midwest, and began closing restaurants in the late 1980s. Its footprint had shrunk to less than 200 locations by 2002.
ChiChi’s filed for bankruptcy in early 2003, then was responsible for an outbreak of hepatitis A that sickened hundreds of people and killed four, which was the proverbial nail in the coffin. Chi-Chi’s is survived by the Hormal-owned brand and a few overseas locations.
Subscribe to our newsletter !
Before Outback or LongHorn, there was Mr. Steak. Unsurprisingly, this restaurant chain that started in Colorado in the ’60s has specialized in affordable steak dinners. Unlike Chi-Chi’s Midwest location, this was the perfect place and time for a steakhouse. The chain marketed itself as “America’s Steak Expert” and people loved it. The chain’s commitment, according to founder James A. Mather, was to “serve the best low-calorie, high-protein meal at the lowest possible price”. Surviving photos from advertisements regularly show T-bone steak dinners for $3.99, which included salad, bread and potatoes, being reduced to $2.99!
At the peak of the chain in 1978, there were over 270 restaurants in the United States. While competition from newer steak chains, like Sizzler, helped its downfall, Mr. Steak fans say its downfall was the chain that moved away from steak. When he added things like chicken, fish and other options to his menu, the steak message was diluted. This echoes the words of the founder, who said in a 2007 interview that “every time we stray from that initial commitment, we always come back to it and realize that’s our strength and our concept.” But, honestly, you’d still kill for steak and king crab for $8.45!
Mr. Steak filed for Chapter 11 bankruptcy in 1987, and by 1992 there were only 57 Mr. Steak locations left. Around this time, a company called Omnivest International purchased the remaining locations and attempted to revitalize them. This effort ultimately failed, and in 2009 Mr. Steak’s last location closed.
Praised for its fried clams, frankforts and signature ice cream available in 28 flavors, Howard Johnson’s was once the largest restaurant chain in the United States, with a footprint of more than 1,000 locations. HoJo’s popularity peaked in the 1960s and 1970s, but waned soon after as the chain struggled to keep pace with competitors like McDonald’s and KFC.
CEO Howard B. “Bud” Johnson sold the company to Imperial Group (a British tobacco company) in 1979 for $630 million, and five years later Imperial passed the brand on to Marriott for about half the price . Marriott has gone on a restaurant closing spree, reducing the number of company-owned HoJos and shrinking the chain’s footprint to a fraction of its original size.
With the recent closure of Howard Johnson’s last restaurant, located in Lake George, New York, the former giant is officially gone for good.
Red Barn, founded in 1961 in Springfield, Ohio, was popular for its Big Barney and Barnbuster burgers (the first of which predates the Big Mac),
The brand was acquired in 1963 by Richard O. Kearns and grew into a huge franchise with a national footprint of 300-400 restaurants in 19 states. It even had branches in Canada and Australia.
Red Barn’s progress, however, slowed when it was acquired by United Servomation in the late 1960s and, within a decade, absorbed by City Investing Company, the parent company of Motel 6. primarily through the chain’s real estate, the investment firm phased out Red Barn’s operations, ending marketing of the brand and letting franchisee leases expire. In 1988, the once beloved red barn was no more.
Founded in 1954, Henry’s Hamburgers got its start as a subsidiary of Bresler’s Ice Cream, a Chicago ice cream chain. While Henry’s was originally conceived as a vehicle for Bresler’s popular malts and milkshakes, by the mid-1960s it had taken on a life of its own, expanding to more than 200 restaurants coast to coast. (even outnumbered McDonald’s at one point).
But with the growth of other burger brands like Wendy’s and Culver’s, the fast food industry has become increasingly competitive. Failing to keep pace with its peers, Henry’s went into decline in the 1970s. Today, only one Henry’s Hamburgers remains, a location in Benton Harbor, Michigan.
Burger Chef was founded in 1957 in Indianapolis. Leveraging a number of industry innovations, including a patented flame grill and fast food’s first kid’s meal, its popularity and footprint grew rapidly.
The chain experienced significant growth in the 1960s and 1970s, growing from 600 restaurants in 1968 to over 1,000 in 1972 (placing it roughly on par with McDonald’s, which in the same year had a footprint of around 1600).
By the late ’70s, however, the brand was beginning to lose its footing, and again the culprit was growing competition. While Burger Chef managed to stand out with its meals for kids, which debuted in 1973, it failed to retain its monopoly on the lucrative menu category.
In 1978 McDonald’s launched the Happy Meal and Burger Chef lost a subsequent copyright lawsuit. The chain rallied in 1978 with a Star Wars licensing deal but still couldn’t keep up with Mickey D’s and all of its innovative ideas.
Hardee’s acquired Burger Chef in 1981 for $44 million and wasted no time in renaming most of the chain’s restaurants.
A previous version of this article was originally published in July 2022. It has been updated with new information.
