tl;dr: Private equity. Quoting myself:

Private Equity colludes with the private banks (which control the Federal Reserve and have largely captured the Treasury) to acquire companies using almost no initial capital. They then strip those companies of as much value as they can and then sell the depleted companies to lower-rung PEs, which squeeze out what little value is left, and so on until the companies default from the highly-leveraged debt PE saddles them with. These are asset stripping schemes.

Part of the scheme in this case was to make Red Lobster sell off its stores and rent them back at high rates. LA Times:

If one is looking for the original sin in Red Lobster’s decline, however, a good candidate would be the deal that brought it under Golden Gate Capital’s ownership. The private equity firm bought the chain from Darden for $2.1 billion, financing the sale in part by selling the real estate underlying 500 restaurants to the real estate firm American Realty Capital for $1.5 billion.

This was a sale-leaseback transaction, in which Red Lobster was instantly converted from the owner of its property to a tenant on the same property. The leases were typically long-term — as long as 25 years — with annual rent increases of 2% baked in. They were also triple-net leases, meaning that the restaurants were responsible for paying operating costs, property taxes and insurance.

Red Lobster thus lost a great deal of flexibility for closing underperforming restaurants and cutting costs. The bankruptcy filing says that a material portion of the leases charge above-market rates. Of the company’s lease obligations of $190.5 million last year, more than $64 million was for “underperforming stores.”

This exacerbated the company’s financial problems. “Given the Company’s operational headwinds and financial position,” the filing says, “payment of lease obligations associated with non-performing leases has cause significant strains on the Company’s liquidity.” In other words, the sale-leaseback arrangement was draining the company of cash.