Red Lobster: Endless Shrimp, a $1.5 Billion Leaseback and Chapter 11

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Red Lobster opened in Lakeland, Florida, in 1968, founded by Bill Darden and Charlie Woodsby to bring affordable seafood inland. By 1970 it had five Southern locations, and General Mills bought it and expanded it through the 1980s, including into Canada via former Ponderosa steakhouses. Garlic cheese biscuits created by Kurt Hankins in 1991 were renamed Cheddar Bay Biscuits in 1996, and after Beyoncé name-checked the chain in "Formation" and performed at Super Bowl 50 in 2016, sales jumped 33 percent. An endless snow crab promotion in 2003 backfired as wholesale crab prices rose and diners lingered cracking legs, costing parent Darden Restaurants a $3 million charge and president Edna Morris her job.

In 2014 Darden sold Red Lobster to Golden Gate Capital for $2.1 billion, financed largely by selling the real estate of 500 restaurants to American Realty Capital Properties for $1.5 billion and leasing it back, leaving about $200 million a year in rent by 2023. Seafood supplier Thai Union bought a 25 percent stake in 2016 for $575 million and the rest by 2020, installed Paul Kenny as interim CEO, and replaced two shrimp suppliers with itself at higher cost. In June 2023 the chain made $20 Endless Shrimp permanent, and in May 2024 it closed dozens of restaurants and filed for Chapter 11.

• Analysts estimated the chain lost $3 on each Endless Shrimp customer in some areas, and the promotion drove an $11 million quarterly loss.
• Prices for the deal rose from $20 to $22 and then $25 before the bankruptcy.
• Flavor Flav ordered the entire menu to support staff and became the chain's spokesperson for the return of Crabfest.
• Chapter 11 let Red Lobster break the leaseback contracts and wipe out roughly $1 billion in debt.
• It exited bankruptcy on September 16, 2024, under a group including Fortress Investment Group, with CEO Damola Adamolekun and about 545 locations.