Italian food is undeniably one of the world’s most beloved cuisines. A 2019 YouGov poll of over 25,000 people across 24 countries ranked Italian food as the most popular among 34 national cuisines, edging out Chinese and Japanese. However, this popularity hasn’t shielded Italian restaurants from the rising labor and food costs that have been plaguing the industry. Over the past few years, some of the biggest names in the category have filed for Chapter 11 bankruptcy, including Bravo Brio, Pizza Hut, Bertucci’s, and Buca di Beppo.

Fazoli’s Bankruptcy and Restaurant Closures

In January 2026, Fazoli’s parent company, FAT Brands Inc., filed for voluntary Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of Texas. Since then, Fazoli’s has been closing restaurants across the country, with a total of 50 closures in the last nine months. The chain has exited the state of Alabama entirely and lost the most restaurants in Indiana, with 11 closures and 18 remaining.

Why Italian Restaurants are Struggling

The entire restaurant industry in the United States is facing widespread challenges, including rising food, labor, insurance, energy, and swipe fees. More than nine in 10 operators cite these as the biggest challenges they face. The struggles of Italian restaurants like Fazoli’s are a microcosm of the broader issues affecting the industry.

Fazoli’s Differentiation and Menu Offerings

So, what sets Fazoli’s apart from other Italian restaurants? The chain’s quick-service model, built around drive-thru speed, delivers pasta, baked dishes, and sides in minutes. Fazoli’s prices are also the most affordable among major Italian-inspired chain restaurants, with a lower average ticket. The chain’s breadsticks, baked continuously in small batches and heavily brushed with garlic butter, are a customer favorite and often beat Olive Garden in consumer taste tests.

New Owners and Future Outlook

Earlier this year, FAT Brands secured new owners, with FBG Bid Co. buying several of its restaurant chains in a $595 million credit bid. The transaction included 13 restaurant brands spanning over 1,700 locations worldwide. While Fazoli’s has faced significant challenges, the chain’s new ownership and the industry’s ongoing efforts to address the challenges it faces may signal a brighter future for the Italian restaurant chain.