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CHAMPAIGN — From chains such as Burger King to small businesses like Pandamonium Doughnuts, Champaign-Urbana has lost a number of restaurants in the past year.
Unnati Narang, assistant professor of business administration at the University of Illinois Gies College of Business, said that a number of factors contribute to chain closures — both locally and across the country — including inflation, consumer preferences, health and safety standards, and “how aligned the restaurant is to the local markets and competition.”
Small mom-and-pop shops can also be affected by these factors, though Narang noted that a major difference between local restaurants and national brands is that chains benefit from the use of analytics and consumer data. Small businesses, on the other hand, rarely have access to these resources.
“Here in C-U, though, we’ve seen closures on both sides: Chains and even several national brands in the Illini Union have shut their doors, while the closures that feel most painful are the local, family-run spots we grow attached to,” she said. “When I was in College Station during my Ph.D., I noticed a similar churn; it was the mom-and-pop places whose loss the community felt most deeply.”
When asked if the lingering effects of the pandemic might be playing a role in restaurant closures, Narang said that consumer spending data shows that dine-in business returned to pre-pandemic levels “as early as mid-2021,” citing a research paper by Shin Oblander and Daniel Minh McCarthy. She added that restaurant delivery, which saw a short-term peak during the pandemic, continued to see an increase until mid-to-late 2021 before returning to what it was before.
However, not every business has rebounded. When Café Kopi closed its Walnut Street location in late 2024, owner Douglas McCarver said that the business “has never gotten back to where it was” before the pandemic. He also said that it felt like “the right time” to close, as the shop’s lease was up.
Local restaurants have cited a variety of reasons for their closures. Pandamonium Doughnuts owners James and Marci Kyung wanted to spend more time with their children. Industrial Donut in Savoy struggled with “rising costs, decreasing sales and the growing pressure from chain competition,” according to a social-media post from the business.
Epic Burger CEO David Grossman said that the company’s Champaign business at 1305 S. Neil St. closed earlier this month because “the location didn’t work for us.”
“Sales stunk, rent was too high, traffic was too low,” he said in a previous interview. “The math didn’t work.”
On the other hand, not every business shares its reasons for closing with the public or the press, leaving the community to speculate on the root causes — such as why Slim Chickens abruptly closed its Champaign location on Sept. 2 or why Burger King’s Philo Road location in Urbana shut its doors in November 2024.
Narang said that location is “one of the most important factors” in a restaurant’s success; her research shows that the farthest customers are willing to drive for a restaurant is 30 miles, but the average is approximately 17 miles.
“Broadly, success depends on creating enough differentiation so that customers are less price-sensitive, e.g., willing to pay a little more or travel farther to dine with you — a tough challenge in such a crowded market,” she said. “At the same time, online reviews and word-of-mouth play a critical role in turning visibility into actual foot traffic.”
When asked what unique challenges and opportunities exist in a college town, Narang replied that Champaign-Urbana has a “rich, diverse community” of faculty, students and other UI affiliates, so its population is “constantly in flux.” This means that restaurants have to keep up with current tastes and be ready to adapt.
Additionally, the area’s younger population “can be tapped through digital initiatives,” meaning that restaurants should offer not only dine-in service but also delivery, online ordering and pickup, she said.
“Even the hours restaurants operate or how they manage periods of low demand, such as summer and winter breaks, or days of peak demand, such as game day or mothers/fathers’ weekends, needs to be managed well, keeping the C-U audience in mind,” Narang added. “Restaurants have to operate in a very local manner, with the key local dynamics in mind even if they are chains.”
The rhythms of the university calendar can sometimes be a challenge for local eateries. For instance, Conrad’s Grill in Campustown chose not to reopen after its usual winter-break closure during the 2024-25 school year.
Mike Rane, part of the LLC that owned the franchise, said that the restaurant wasn’t making enough to support rent and labor costs.
“Between that and people getting comfortable with food being delivered to them through DoorDash and the like, the break-even number was pushed too high for basically eight months of busy and four months of super slow,” he added.
“From my perspective, a lot of the closures come down to rising costs, staffing shortages, and tighter health regulations that make it tough for smaller operators to survive,” Narang said. “At the same time, that churn also creates space for new restaurant openings and even new concepts like food halls, coffee shops, and globally-inspired kitchens that reflect our diverse residents. I know I am excited about the new Ethiopian place that’ll open soon.”
Blue Ethiopian Cuisine & Cafe hopes to open at 117 N. Walnut St. in late October — not far from 107 N. Walnut St., where The Caffeine Rx is taking over the space that used to house Café Kopi.
Other upcoming additions to Champaign-Urbana’s restaurant landscape include Dutch Bros Coffee, a new 7 Brew on South Neil Street and Royal Donut in Pandamonium’s former space. Additionally, a KFC that previously closed on West University Avenue in Urbana is expected to reopen.
That’s in addition to the other openings that have been scattered throughout 2025 already, including Lazy Daisy Diner and Cafe, the food court in H-Mart, Beef ‘O’ Brady’s, McDonald’s in Savoy, Blind Pig Brewpub and the various offerings at The Yard on Broadway, a new food hall in Urbana.
Narang said that while it’s hard to be exact, she gets the sense that the number of restaurants opening in Champaign-Urbana exceeds the number of closures.
However, she said that the losses often “weigh heavier” on people than the new openings.
“In psychology, there is a well-accepted notion of loss aversion, i.e., losses loom larger than gains — I still remember when Pandamonium Donuts closed,” Narang said. “For many families, that was a weekend tradition. Many of us in C-U find a favorite spot and stick with it. We build routines and memories around those restaurants. So when one shuts down, it feels personal, not just economic.”
