After shuttering more than 100 locations across the country and filing for Chapter 11 bankruptcy protection in May, Red Lobster has hired a new CEO to help revitalize the popular seafood restaurant chain.

The embattled franchise, which has been around for 56 years, has had five CEOs since 2021. However, Damola Adamolekun, 35, has voiced his passion for the brand.

Don't miss

• Here is the true value of having a fully paid-off home in America — especially when you're heading into retirement

• 'I could've been set for life': This former Goldman Sachs analyst says his family of 4 can't live comfortably on $230K a year after buying 'forever home.' Is the American dream out of reach?

• Commercial real estate has beaten the stock market for 25 years — but only the super rich could buy in. Here's how even ordinary investors can become the landlord of Walmart, Whole Foods or Kroger

“This is, without exaggeration, one of the most important companies in American history,” the new CEO told CNN in a recent interview.

His first major step towards rescuing Red Lobster is to eliminate one of its most iconic menu items: $20 endless shrimp, which was first launched in 2004. The company lost an estimated $20 million in 2023 when “endless shrimp” became a permanent year-round menu option.

“That’s a very expensive product to give away endlessly,” he said, explaining how shrimp orders caused “chaos” in the kitchen. “Maybe it’s because I was a server when I was young, but I understand what it’s like working in the restaurant business.”

Besides the shrimp, Adamolekun also wants to downsize the menu “in an intelligent way” while upgrading the chain’s infrastructure and technology to allow for growth in the future.

While it’s too early to tell whether these steps will resolve Red Lobster’s money woes, the new CEO’s strategic moves offer some lessons for those facing similar financial pressure.

Focus on costs

It’s no surprise that Adamolekun’s first step towards salvaging the company is to cut its biggest expenses by downsizing the menu. Rising costs in recent years have pushed many businesses and families to the edge of a financial cliff.

In the first nine months of 2024 alone, individual bankruptcies filed under Chapter 13 and Chapter 7 were up 9% and 19%, respectively, over the same period last year, according to Epiq. It could take several years for consumers and families to financially recover from such a filing.

To bolster recovery, Experian encourages defaulters to take the time to re-examine the patterns of spending and borrowing that led to the bankruptcy and to avoid similar patterns in the future.

Personal finance celebrity Dave Ramsey, who famously filed for bankruptcy in 1988, believes careful budgeting was one of the key reasons for his own recovery.

"We just took inventory. We said, 'OK, what about us personally and what about our behaviors and our habits and our decisions and our values was wrong that brought us to this moment?'” he explained on his investing podcast, The Ramsey Show.

Now, he encourages his fans to focus on their budget “first and foremost” after bankruptcy.

While cost-cutting and stringent budgeting may help stabilize your finances, in order to truly get out of debt you’ll need to focus on growth as well.

Read More: Feeling broke on a $665K salary: This surgeon and his wife didn't realize their financial adviser may have been charging a high fee until Ramit Sethi set things straight

Invest for growth

Despite Red Lobster’s financial struggles, Adamolekun said he’s already looking to make key investments to expand the franchise.

“We intend to be done [with] closing restaurants and we intend to grow from here,” he told CNN. “There’s going to be investments in the product that will take time, infrastructure investment takes time, technology investment takes time… but the impact should be felt right away.”

Individuals and families can also make investments to expand income. For example, apprenticeship programs led to an average boost in long-term earnings of 59% after one year, according to a study by the Urban Institute and Abt Associates.

Going to trade school or acquiring a new skill by investing in a certification course could help you boost income — which makes saving, budgeting, and paying off debt a lot easier.

“You just got to start dialing this stuff in and go, ‘What can I do to get my income up in the short-term? What can I do to boost income in the long-term? And let’s manage the money that we have super, super tight,’” Ramsey said.

“What you gotta do is ask yourself, ‘What can I do to get above-average income for above-average financial results?'”

What to read next

• Arizona man says his gap insurance won't pay an $18,000 claim for his totaled BMW because of a 60-cent mistake

• Texas man used to spend $9,000 a month partying, now refuses to work more than 15 hours a week to pay off debt

• Car insurance premiums in America are through the roof — and only getting worse. But 5 minutes could have you paying as little as $29/month

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.