The news: Better-for-you restaurant chain True Food Kitchen filed for Chapter 11 bankruptcy protection as it looks to reduce debt and strengthen its balance sheet. In connection with the filing, the company shuttered 12 of its 46 locations and is seeking additional capital to support its remaining business.

Why it matters: While True Food Kitchen is a relatively small chain with a differentiated “wellness-driven dining” proposition, its struggles highlight the broader challenges facing the restaurant industry.

Some 60% of US consumers say they’re dining at restaurants less often to save money, per a Popmenu consumer survey, and growing economic pressures are making them more selective about where they spend. Restaurant prices rose 3.4% YoY and 0.3% MoM in August, as operators contend with costs that have soared since the pandemic.

Total expenses for the average restaurant rose 36% between 2019 and 2026, per a National Restaurant Association analysis. Average hourly earnings for restaurant employees increased 41%, while wholesale food prices climbed 35%. By comparison, overall consumer prices rose around 31% during the period, per the Bureau of Labor Statistics. Restaurants are also paying more for utilities, occupancy, supplies, credit card fees, and services such as reservations and delivery platforms.

Those rising costs are taking a toll on the bottom line: 42% of operators said their restaurants were not profitable in 2025, per the National Restaurant Association.

That leaves restaurants caught between customers resistant to higher prices and costs that give operators little room to lower them. The squeeze is showing up in traffic: While 43% of restaurant operators said customer traffic rose YoY in August, the industry overall reported a net decline—the 18th time in the past 19 months that more operators reported declining traffic than gains, per the National Restaurant Association’s monthly tracking poll.

But performance varies dramatically by restaurant. Q2 same-store sales at Cava climbed 9% (with traffic up 5.3%), Texas Roadhouse rose 6.2%, and Chili’s grew 5.6%. By contrast, Papa Johns’ North American same-store sales declined 8.3%, Wingstop fell 7.5%, and Wendy’s US same-store sales dropped 7.0%.

Implications for restaurants and marketers: As consumers become more selective, restaurants need to give them a compelling reason to dine out and choose them over the competition.

The restaurants still growing show how that can work. Cava is using its loyalty program to deliver value beyond price. Its Flavor Passport, for example, encourages members to explore the menu and earn rewards, while perks like free pita chips and invitations to exclusive events add tangible and experiential benefits. Chili’s has positioned its offerings as “better than fast food” at a comparable price, while Texas Roadhouse has leaned on discounted early dine-in entrées. In each case, value is about making the experience feel worth the money, not simply the pricing.

That puts restaurants without an equally compelling proposition in a difficult spot. While a chain like True Food Kitchen sought to differentiate itself through wellness, it still operates in a crowded casual/full-service market with elevated costs. That positioning can interest diners, but ultimately a restaurant needs enough traffic, loyalty, and spending to make the economics work. Shrinking its footprint and clearing its books could give the chain a path forward by concentrating resources on locations where its proposition resonates most.