Historic fast-food restaurant closing in Chapter 11 bankruptcy

While numerous places across the United States try to call themselves the country's ultimate food city, Chicago undoubtedly claims many iconic dishes.

These include name-bearing classics like deep-dish pizza and the Chicago-style hot dog, as well as the Jibarito, Flaming Saganaki, and Italian beef sandwich, which, outside the state, are known only by the most dedicated foodies.

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And although multiple cities claim fried chicken as central to their food culture and identity, Chicago has its own iconic chain that is known by anyone who has spent any long stretch of time in the city.

That, in turn, prompted several impersonators.

Founded in 1950 by African-American entrepreneur and Alabama transplant Harold Pierce, the original Harold's Chicken Shack was inspired by the chicken dinner that Pierce's family had when the preacher visited their home on Sundays.

Distinguished by the classic tangy-sweet red sauce it pours over both the chicken and accompanying fries, Harold's expanded beyond a few counters predominantly in Chicago's South Side to over 45 locations in 10 states.

One Harold's Chicken “made the decision to close”

With individual Harold's restaurants operating independently as franchises, unaffiliated restaurants in the city have seized upon its name. The original Harold's Chicken Shack is commonly referred to as “Harold's Chicken” by residents, while a separate chain registered as only “Harold's Chicken” operates in the Chicago suburbs.

The Nevada-based De'nsite Inc. that has locations in Homewood, South Holland, and Olympia Fields filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Northern District of Illinois on July 27.

In court filings, the owners listed $50,000 in assets and between $500,000 to $1 million in liabilities while citing flagging visitor numbers as the reason behind their struggling finances.

As of August 2025, the Homewood and Olympia Fields locations are still operating in their respective suburbs, while the South Holland one is marked as temporarily closed on Google but still has the outdated hours on Yelp.

“As we celebrate 15 years as a proud Black family-owned and operated establishment, we've made the decision to close this location, build our growth and would love to serve you at our sister restaurants,” the voicemail for the restaurant now states to anyone who calls its number.

The Harold's Chicken Shack name was seized upon by several unaffiliated chains.

Image source: Harold's Chicken

As fried chicken demand stays high, smaller chains still struggle to stay afloat

The De'nsite bankruptcy filing does not affect the wider Harold's brand or parent company, although a separate location in Las Vegas also sought Chapter 11 protection in October 2024, and another was closed by the Illinois Department of Revenue in June.

While no additional closures have yet been announced, the debt owed to unsecured creditors would put the existence of the other two locations at risk, unless a viable turnaround plan is presented and approved by the bankruptcy court.

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This news comes in a period when the U.S. fast-food industry is leaning heavily into a chicken craze. Restaurant chicken sales rose by 9% in the last year and went from bringing in $70.2 billion in total industry sales in 2024 to $67.4 billion in 2023.

Chains like McDonald's (MCD) and Restaurant Brands International’s (QSR) Popeyes have jumped right onto this demand, with several new chicken items released in the last year.

Smaller chains, however, still struggled with increased competition and the rising costs of operations.

In April 2024, the parent company of New York-based chicken fingers chain Sticky's filed for Chapter 11 bankruptcy and eventually closed several locations, while Yum! Brands (YUM) giant KFC has also been reporting falling sales and customer traffic most quarters since 2023.