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In a shocking move that has sent shockwaves through the casual dining industry, Denny’s announced Tuesday that it will be closing 150 of its iconic restaurants by the end of 2025. The closures are part of a broader plan aimed at improving the company’s overall financial performance and set it back on track.
Denny’s has already closed about 75 of the 150 restaurants and another 50 is slated to follow by the end of this year.
Denny’s Executive Vice President and Chief Global Development Officer Stephen Dunn said to investors in Tuesday’s meeting: “Some of these restaurants can be very old. So when you think of a 70-year-old plus brand, you have a lot of restaurants that have been out there for a very long time.”
While Denny’s has not disclosed the specific locations slated for closure (there are reports that locations are closing in New York and Pennsylvania) the company has indicated that the affected restaurants are primarily those that have been underperforming for some time.
Dunn continued: “It’s never easy to close restaurants. It’s a challenge, you work with external factors, landlords. And of course, you’re dealing with people’s lives, but we’ve realized that closing underperforming restaurants is strategically advantageous to a number of our franchisees as it strengthens the bottom line cash flow for the long term.”
Denny’s news comes as TGIFriday’s plans to file for Chapter 11 bankruptcy citing much of the same issues as Denny’s. Filing for bankruptcy has become an alarming trend in the restaurant industry over the past year or so as chains struggle to stay afloat amidst inflation, the effects of the pandemic, lower sales, and delivery apps.
Big brands like; Red Lobster, Blaze Pizza, Boston Market (may be entirely gone now), Kevin Hart’s Hart House, Pizza Hut, Mod Pizza, BurgerFi, and Hooter’s are some of the major chains that have closed locations, filed for bankruptcy or gone out of business in the past 12 months.
Red Lobster was just acquired by a new owner and able to crawl out of bankruptcy, for now. Can they turn the ship around for the long term is the question.
As of mid-September, Denny’s had 1,586 restaurants operating in the US so it’s not like they’ve gone belly up overnight. This could be the first step towards the end is the concern, on course with the inevitable if something doesn’t change for the better. And that goes for every restaurant and business right now.
On news of the coming closures, Denny’s shares dropped almost 18%.
Denny’s has been a staple of American dining for over 70 years with 24 hour service. During the pandemic the hours were reduced and many locations have yet to reinstate it.
