Craft beer-themed restaurant chains have gained popularity by combining a robust selection of beers with diverse food menus. National chains like BJ’s Restaurant & Brewhouse and Yard House have thrived in this niche, but smaller regional players have faced significant challenges, particularly in the aftermath of the COVID-19 pandemic.
National Success Stories
BJ’s Restaurant & Brewhouse began as a Chicago deep-dish pizza joint in Southern California in 1978 before pivoting to focus on craft beer. The chain now operates 216 locations nationwide. On July 25, BJ’s reported earnings that surpassed analysts’ expectations, though its stock price has been volatile. Shares peaked at $38.87 on July 23 before falling to $29.49 due to broader economic concerns.
Yard House, established in Southern California in 1996, boasts over 100 beers on tap and operates 88 locations across the U.S. The chain is owned by Darden Restaurants, which also oversees brands like Olive Garden and LongHorn Steakhouse.
Challenges for Regional Players
While national chains have largely weathered the storm, smaller craft beer-themed establishments have struggled. Rising costs, inflation, and reduced customer traffic have forced several regional chains into bankruptcy or closures.
Melt Bar & Grilled
The Ohio-based chain, known for its gourmet grilled cheese sandwiches and craft beers, filed for Chapter 11 bankruptcy on June 14. Founded in 2006 by Matt Fish, Melt once operated 14 locations but now lists just six, including satellite spots at Progressive Field and Case Western Reserve University. Increased food and labor costs, along with lawsuits from landlords, contributed to the chain’s financial struggles.
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Zydeco Brew Works
Located in Ybor City, Florida, this brewery and restaurant filed for Chapter 11 bankruptcy in January, closing its main brewery and restaurant on Tampa’s 7th Avenue.
Griffin Claw Brewing Co.
Operating breweries, restaurants, and taprooms in Birmingham and Rochester Hills, Michigan, Griffin Claw filed for Chapter 11 bankruptcy on July 26. The filing was intended to resolve disputes among the company’s ownership partners.
World of Beer Files for Bankruptcy
World of Beer, a direct competitor to Yard House and BJ’s, filed for Chapter 11 bankruptcy on August 2. Tampa-based WOB Holdings and 11 affiliates cited rising interest rates, lease obligations, inflation, and slow post-pandemic recovery as factors in the filing.
At its peak in 2016, World of Beer operated 75 locations across 20 states and even expanded internationally with a franchise in Shanghai, China. However, the company has since closed more than half of its locations, leaving just 34 listed on its website. In the 12 months before its bankruptcy filing, 14 locations were shuttered.
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In some cases, World of Beer locations have been rebranded instead of permanently closing. In 2017, three Virginia franchises in Arlington, Fairfax, and Reston were rebranded as Crafthouse by their owner, Evan Matz.
Outlook for Craft Beer Restaurants
While national chains like BJ’s and Yard House continue to thrive, smaller and regional craft beer establishments face mounting challenges in adapting to economic pressures. Rising operating costs, changing consumer habits, and post-pandemic uncertainties are likely to shape the future of this niche market.
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