Red Lobster closes Times Square unit after 23 years amid construction woes

The cooks, servers and bartenders at 5 Times Square are losing Red Lobster’s only New York City location on June 14, but the company is trying to keep them in the fold with transfers to another Red Lobster of their choice and extra pay during the move. In a market where a lunch rush can determine a tip line and a slow night can cut hours, that offer is the difference between a managed exit and an immediate scramble for work.

Red Lobster said prolonged construction at the building, on Seventh Avenue between 41st and 42nd streets, hurt visibility, access and foot traffic. CBS New York reported that scaffolding has wrapped the exterior and partially hidden the sign, with banners hanging on the structure reading “open during construction.” The company also pointed to plans to convert 5 Times Square into a residential tower, part of a broader office-to-apartment push led by Empire State Development and the city.

The closure ends a 23-year run for the restaurant, which opened in 2003 and became a rare Red Lobster outpost in Manhattan. Red Lobster said, “Times Square has been an important chapter in Red Lobster’s history,” and called the decision difficult. That matters in Times Square, where tourist traffic can fill a dining room fast and disappear just as quickly, leaving the pressure to show up in shifts, tip pools and kitchen pacing.

The Times Square shutdown also lands against a larger company reset. Red Lobster filed for Chapter 11 bankruptcy protection on May 20, 2024, citing a difficult macroeconomic environment, an underperforming footprint, failed strategic initiatives and increased competition. It closed 93 underperforming locations that month and sought court approval to reject 108 leases. By June 2025, the chain said it expected to operate about 544 locations across the U.S. and Canada after bankruptcy, backed by more than $60 million in new funding from the ownership group led by Fortress.

A 2024 report said the owners of 5 Times Square sought $2.2 million in annual rent for the roughly 16,482-square-foot, three-level space, underscoring how much the building’s economics had already tightened around the restaurant. For workers, the real test in closures like this is whether transfer offers and extra pay arrive early enough to keep a lost dining room from turning into a lost paycheck.