Dive Brief:
- O’Charley’s has reportedly closed, or is in the process of closing, all of its locations, according to multiple media reports.
- The closures coincide with an ongoing strategic portfolio review at the chain’s owner, Cannae Holdings. In February, Cannae’s CEO Ryan Caswell said that the company would concentrate its portfolio on sports and entertainment-related assets rather than its restaurant group and non-core assets.
- The chain’s website is no longer functioning, and the brand cannot be found on social media, except for a LinkedIn page with little information. On calling two locations in Kentucky, which local media reported were open as of Tuesday, Restaurant Dive encountered the following phone message: “Hello. Thank you for calling O'Charley's. Our restaurant has closed for business. For questions please contact [email protected]. Thank you for your patronage."
Dive Insight:
During the second quarter, O’Charley’s experienced traffic challenges and reported a 13.1% decline in same-store sales, according to an earnings report from Cannae, which also owns a majority stake in Ninety Nine Restaurant & Pub. Cannae took an ownership stake in the two restaurants in 2018.
Cannae said it was hoping to turn O’Charley’s same-store sales declines around through menu engineering, guest service improvements and closing underperforming locations.
As of the end of the second quarter, the chain had closed four restaurants in 2026, and Cannae said it invested $170 million in its restaurant group. That division posted a net loss of $40 million during the quarter and an operating loss of over $81 million for the 12 months ending June 30, 2026. Ongoing losses prompted a review of the company’s restaurant division, starting as far back as February.
“As part of this transformation, we will continue to monetize nonstrategic assets in a disciplined manner to redeploy capital towards higher returning opportunities,” Caswell said on a February earnings call. “As a result, Cannae is exploring strategic alternatives with regards to its restaurant group.”
During a May earnings call, Caswell said the board’s focus was around monetizing its restaurant assets and to “redeploy that capital into higher returning investments.” As of August, however, its strategic review of its restaurant group was “taking longer than anticipated,” but the company was “looking at strategies that will result in both sale and proceeds to Cannae and eliminate negative cash flow.”
O’Charley’s, which had 250 units at its height, has been closing restaurants for some time. As of the end of the second quarter, the chain had 49 company-owned locations and three franchised locations across 13 states in the Midwest and South. Many of its locations had been in operations for decades, according to FSR Magazine.
In 2023, O’Charley’s closed over 50 units after these chains had “long-term and immediate problems,” according to Restaurant Business. Much of that was tied to shifting demographics. As nearby malls or large retailers closed, customers stopped coming, but costs continued to rise at the chain.
Many casual dining chains have closed locations in recent months, including Red Lobster, which continues to rightsize the company after emerging from bankruptcy. On the Border filed for Chapter 7 earlier this year, roughly a year after it filed for Chapter 11 bankruptcy and was bought by Pappas Restaurants. That chain was down to five restaurants by the time of its Chapter 7 filing.
O’Charley’s franchisee Covelli Enterprises, which owns three O’Charley’s restaurants, received an extension to keep at least one of its locations open through the end of the month, according to WKBN27 news. Covelli also operates Panera Bread, Dairy Queen and Caribou Coffee locations.
Restaurant Dive reached out to Covelli Enterprises and Cannae Holdings for comment, but did not hear back by press time.
Aneurin Canham-Clyne contributed to this report.
