The internet and social media have become powerful enough to make or break a business, sometimes with nothing more than a single post. In an age when information spreads rapidly online, even an unverified claim can spark outrage, damage a company’s reputation, and affect its bottom line.
Texas Roadhouse (TXRH) is now facing the consequences of an internet hoax that spread damaging allegations about the restaurant chain, highlighting just how costly misinformation can be for a business.
Texas Roadhouse faces racism allegations
In August, a Facebook post published under the username Nancy Smith claimed that members of a Facebook group of approximately 400,000 people called “White and Proud” were discussing intentionally tampering with food served to Black customers at Texas Roadhouse and Logan’s Roadhouse restaurants.
The post did not identify any specific restaurant locations, and the user could not be confirmed as an employee of either restaurant chain.
Although the original Facebook post was later deleted, screenshots circulated online and quickly spread across other social media platforms, including TikTok.
Texas Roadhouse responds to the allegations
Texas Roadhouse addressed the allegations on Aug. 23 in a post on TikTok.
“We are aware of the video that is being shared with an accusation that has been made toward our restaurants,” the company said in the post.
“We believe it to be completely unfounded and we take every accusation toward our brand seriously. We are investigating this alleged abhorrent behavior and remain committed to treating every guest with respect, dignity, and the Legendary Service they deserve.”
On Aug. 27, Texas Roadhouse published a statement on its website saying that an internal review and investigation by a third-party online forensics firm found no evidence supporting the allegations.
The company also said investigators found no proof of the alleged online group or any connection to current or former Texas Roadhouse employees.
“The post alleging the targeting of diners and food tampering has been proven as an online hoax. Our third-party online forensics firm, as well as multiple credible online publications have confirmed this is a baseless rumor. We love our communities and we remain committed to providing Legendary Food, Legendary Service to each and every guest we serve,” said Texas Roadhouse.
The company added that the accusations were inconsistent with its values and commitment to treating every guest with dignity and respect.
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Texas Roadhouse sales growth plunges after the online hoax
Although Texas Roadhouse said its investigation found no evidence supporting the allegations, the online hoax still appears to have affected the company’s business.
During the third quarter of fiscal 2026, Texas Roadhouse reported that comparable restaurant sales climbed 4.3% year over year. The growth included a 0.7% increase in traffic and a 3.6% rise in average check across its brands.
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While comparable sales remained positive, growth slowed considerably in September, falling to just 1% year over year, according to company executives.
Texas Roadhouse CEO Gerald Morgan addressed the impact during the company’s latest earnings call.
“Our third quarter results, specifically in September, were negatively impacted by what was determined to be a social media hoax that occurred at the end of August,” said Morgan.
Texas Roadhouse VP of Investor Relations Michael Bailen provided additional details, saying comparable sales growth reached 5.9% in July and 6.8% in August before slowing to 1% in September.
Morgan expressed confidence that the restaurant chain would recover from the setback.
“We are a very trusted brand out there. And I do believe that people understand that,” he said. “I believe that we will continue to get back to exactly where we were going into it.”
Morgan reiterated that the racist allegations were false and said the company would lean into other avenues if needed as it works to regain its previous sales momentum.
The incident highlights how quickly misinformation on social media can escalate into a business problem, potentially affecting even established brands with millions of customers.
Related: Rainforest Cafe prepares to close another iconic location
