Once-Legendary Restaurant Chain Shutters Dozens of Locations Facing "Uncertainty"
For several decades, Denny's has been a breakfast institution. Starting in the 1950s in California, the diner chain spread worldwide, peaking at over 1,600 locations in 2023. However, the past few years have not treated the pancake and eggs outpost well. In 2023, they announced they were shuttering 57 restaurants due to soaring costs. Then, in October 2024, they unveiled plans to shutter around 150 locations, representing about a tenth of its total unit count. This week, the brand announced even more closures. Here is what you need to know about the latest announcement.
They Are Closing 30 More Restaurants Than Previously Announced
On Wednesday Denny's revealed it will close about 30 more restaurants than previously announced. As part of an earnings release they announced 88 locations closed last year and Between 70 and 90 locations will close in 2025, for a total of around 180 closures.
What Stores Are Closing?
Denny's hasn't announced the locations of the closures. However, they did reveal that many of them have expiring leases, are in areas that have become unprofitable, or have been open for over 30 years, making them very expensive to remodel.
They Are Confident It Will Rebuild Their Financial Strength
"In any mature brand, when restaurants have been open that long, it is natural that trade areas can shift over time," Denny's Chief Financial Officer Robert Verostek explained in the release. "Accelerating the closure of lower-volume restaurants will improve franchisee cash flow and allow them to reinvest into traffic-driving initiatives like our tested and proven remodel program."
The Renovated Restaurants Are Doing Better
According to the company, remodeling locations was effective in profit growth. Denny's renovated 23 of their 1,3000 locations and claims that the revamped restaurants experienced a 6.4% bump in traffic last year.
They Are Focusing on Changing Menus and Virtual Restaurant Brands
In October, they also revealed that they would continue evolving the menus and focusing on its three virtual restaurant brands (Burger Den, the Meltdown, and Banda Burritos), which the company says have brought in $77 million in sales to date.
There Were Lots of Restaurant Closures in 2024
Denny's is just one of many chains closing up restaurants in 2024. Some chains opted to eliminate underperforming stores to improve the health of their overall businesses, while others were forced to do so to stay afloat amid bankruptcy.
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