Sprinkles Cupcakes, including the Disney Springs location in Orlando, closed suddenly on New Year’s Eve – December 31, 2025, with little to no notice to employees and customers.
Founder Candace Nelson posted on social media expressing sadness about the closure, while also reminding everyone that she sold the company to private equity years ago in 2012 and had no say in these decisions anymore.
The Sprinkles closure occurred amid a broader pattern of high-profile retail and restaurant disruptions linked to private-equity ownership models.
One of the most documented examples is Red Lobster, headquartered in Orlando. After being sold by Darden Restaurants to Golden Gate Capital in 2014, the chain entered into significant real estate sale-leaseback agreements that increased its long-term rent obligations. Combined with rising costs and operational challenges, Red Lobster filed for Chapter 11 bankruptcy in 2024, seeking restructuring and new ownership to stabilize the business. With its new leadership, and renewed emphasis on listening to their customers, it seems to be turning a corner.
Also recently and locally, Tijuana Flats underwent ownership transitions with private equity starting in 2015 and went on to file for Chapter 11 in 2024, closing multiple locations. BurgerFi also closed Orlando-area restaurants prior to its parent company’s bankruptcy filing, reflecting financial pressures in the fast-casual sector.
Note that Chapter 11 is a reorganization bankruptcy under U.S. federal law. Its primary goal is to let a business stay open while it restructures its debts. Most Chapter 11 companies keep their locations open, pay employees, and continue serving customers during the process.
Collectively, these cases highlight how financial structures such as leveraged buyouts, sale-leasebacks, and aggressive cost-management strategies can contribute to reduced flexibility during economic shifts.
