Popular Mediterranean restaurant files for Chapter 11 bankruptcy

Often used as a catch-all term for the many types of foods that can be found in the 21 countries that border the Mediterranean Sea, Mediterranean cuisine is a major market in the United States that some estimates pin as being valued at over $22.4 billion in 2025 and projected to grow to nearly $40 billion by 2034.

Its popularity runs the spectrum from major fast-casual chains like Cava and The Great Greek Mediterranean Grill to fine dining options in almost all major cities.

But not every restaurant is equally successful as factors such as operating costs and demand in a given market weigh on which will survive in an industry notorious for its high closure and opening rates.

Zytoun Gourmet Mediterranean files for bankruptcy protection in San Diego

Over in San Diego, the recently-opened Zytoun Gourmet Mediterranean ended up filing for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of California on June 19.

The restaurant serving classic Lebanese foods like falafel, kebabs, shawarma and hummus in a more upscale setting was opened in San Diego's Seaport Village in 2022 by the founder of the long-operating Aladdin Mediterranean Restaurant. The first location of Aladdin opened in Clairmont in 1994 and later expanded to a second location in the same waterfront neighborhood constructed between the Bay and the convention center over the last two decades.

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Zytoun opened in Seaport Village in 2022 as part of wider city efforts to expand the district into a dining and entertainment hub. Listed as the sole owner in the bankruptcy petition, Hamdi Abukhalaf opened Aladdin in 1994 while his family remains behind the operations of both Aladdin and Zytoun now.

In 2025, Aladdin was closed down for two weeks after a salmonella outbreak prompted an investigation by the health department.

The bankruptcy documents filed in court show Zytoun's recorded assets as between $100,001 and $500,000 while liabilities are listed as more than $1 million owed to fewer than 50 creditors. Steven E. Cowen of S.E. Cowen Law is the attorney representing Abukhalaf in the bankruptcy case.

Zytoun has not publicly commented on the bankruptcy on any active social media accounts through which the restaurant promotes its food.

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Which other restaurants filed for bankruptcy protection in 2026

In the filing, Zytoun indicated intent to restructure its finances and continue operating without interruption. Google reviews show a high rating of 4.5 out of total five stars with many returning visitors calling it a local favorite for Mediterranean food with great views of the waterfront.

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Other Mediterranean restaurants to file for bankruptcy protection in California since the start of 2026 include King's Mediterranean Food in downtown Sacramento in March 2026 and the Fat Brands Inc. parent company behind the Beverly Hills-based fast-casual chain Yalla Mediterranean in January 2026.

As part of the bankruptcy-induced restructuring, Fat Brands closed five underperforming Yalla Mediterranean stores in California to eliminate over $492,000 in monthly lease payments. Fat Brands is also the parent company behind national chains such as Fatburger, Round Table Pizza and Twin Peaks gastropub.

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