The owner of Felony Franks says increasing crime and loitering in the area have decreased his sales.
The restaurant received a lot of attention because of its criminally themed menu and its staff. Owner Jim Andrews says he's hired dozens of ex-offenders since opening the stand in 2009.
Manager Brian Smiley is a convicted felon. He says the restaurant gave him another chance in life.
Andrews says closing the shop will present a major problem for many of the workers who will lose their jobs because they all have criminal records.
The restaurant was once under scrutiny by a Chicago alderman who said the restaurant's name, logo and slogans were in bad taste and a bad influence for young people. The restaurant fought a legal battle with the city to erect a sign outside.
One of the restaurant's slogans includes, "Home of the misdemeanor wiener."
(The Associated Press contributed to this report.)