Gen Z Shuns PE-Backed Restaurants as $94.5 Billion Floods U.S. Dining
Updated
Updated · The Guardian · Sep 21
Gen Z Shuns PE-Backed Restaurants as $94.5 Billion Floods U.S. Dining
1 articles · Updated · The Guardian · Sep 21
Summary
Los Tacos No 1’s new funding from TSG Consumer triggered immediate backlash online, with younger diners calling the investment “the beginning of the end” and predicting smaller portions, worse food and higher prices.
TikTok and other social platforms are turning “private equity” into shorthand for sterile, overpriced chains, as users swap lists of spots to avoid and hunt for supposedly independent alternatives.
Critics say the fear is rooted in how private equity boosts profits—often through staff cuts, cheaper inputs and debt-heavy buyouts—which can erode food quality and neighborhood character.
Restaurant owners still face rents, labor and ingredient costs high enough that many see outside capital as unavoidable, while the industry argues private equity helps small businesses grow and hire.
Private equity invested $94.5 billion in bars and restaurants from 2014 to 2024, but nearly half of restaurant and bar bankruptcies in 2024 involved PE-backed operators, underscoring why the backlash is spreading beyond New York.