Wendy's Closing 140 Locations Before the End Of the Year—Here's Why
By the end of 2024, some may find it a little harder to score a Wendy's burger. The company just announced plans to close a large swath of its restaurants before the year comes to an end—and the closures could very well impact your local Wendy's.
During an Oct. 31 earnings call following the release of its latest quarterly results, Wendy's announced that about 140 stores will close by the year's end. The reason for these closures? Wendy's President and CEO Kirk Tanner said they're looking to improve the overall health of the chain by eliminating "outdated" restaurants that are located in "underperforming trade areas."
The restaurants on the chopping block bring in an average of $1.1 million in annual sales and have "operating margins well below the system average," Tanner said. He also noted that "it's not one particular area" that will be affected by the closures.
This practice—shuttering underperforming restaurants to strengthen a chain overall—is fairly common in the industry. For example, rival fast-food chains such as Subway and Burger King have both closed hundreds of restaurants in recent years for similar reasons.
Tanner noted, however, that the company plans to replace the shuttered stores with "new restaurants at better locations with significantly improved sales and profitability." And although Wendy's is closing a significant number of locations this year, it's also opening new ones at a rapid pace. In fact, Tanner expects new restaurant openings to offset all of the closures, "leaving our net unit growth approximately flat compared to the prior year." The chain had 6,011 American restaurants in operation as of the end of last quarter.
Looking ahead, Wendy's plans to ramp up its expansion efforts and projects that its restaurant count will grow by 3% to 4% in 2025.
"By the end of 2024, we will have opened more than 500 new restaurants over the last two years and have the confidence we will deliver an elevated growth in 2025 and the years to come," Tanner said.
The chain has also been remodeling scores of restaurants—with 89% of its global locations now successfully updated—and sees a longer-term opportunity to seriously boost its presence in the United States.
"When I look at our potential…we still have runway in the U.S. to have another additional couple of thousand restaurants," Tanner said.
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