When you buy something through one of the links on our site, we may earn an affiliate commission.
In a surprising move, Wendy’s has announced plans to close 140 underperforming locations by the end of 2024. This news comes as the family-geared chain, TGIFriday’s files for bankruptcy to “ensure the long-term viability” of the brand as the sit-down restaurant points the finger at COVID for their downward descent.
On October 31st, Wendy’s CEO, Kirk Tanner announced the coming closing of 140 locations. He stated the locations are “outdated and located in underperforming, well below the system average.” He continued:
“They’re just in locations that don’t build our brands. You look at a brand that’s 55 years old and some of those restaurants are quite out of date.”
Specific locations have yet to be announced but it seems the locations will be scattered across the US. The chain did a comprehensive evaluation of individual locations to make sure the “system” is healthy. The ones chosen for closure didn’t meet average sales expectations.
The chain is expected to add more locations in better performing areas to off-set the ones that are closing. Tanner discussed this briefly:
“Our focus is on building new restaurants because we know they deliver well over the average of these poor-performing restaurants. We, overall, want the best restaurants for the customers and that customer experience we want to deliver.”
While Wendy’s is closing underperforming locations, it is also actively expanding its footprint by opening new restaurants in strategic locations.
TGI Friday’s Files for Bankruptcy Protection
TGI Friday’s, the once-popular casual dining chain filed for Chapter 11 bankruptcy protection on November 2 after previously discussing the option but not yet confirming it. The COVID-19 pandemic was cited as a major factor for the Chapter 11.
TGI Fridays’ executive chairman, Rohit Manocha, said in a statement:
“The next steps announced today are difficult but necessary actions to protect the best interests of our stakeholders, including our domestic and international franchisees and our valued team members around the world.”
In the meantime, TGIFriday’s secured financing so they can continue operations while the bankruptcy process plays out. And according to John Bringardner, head of Debtwire, they: “stopped the clock on payments of this month’s rent to landlords and other vendors, giving them breathing room to restructure. The chain will likely have to close or sell unprofitable locations as part of the restructuring.”
Dozens of locations have closed just this past week with more expected to follow. At the chain’s height in 2008, they had over 600 locations active in the US. Last year, 269. They now have around 163 restaurants in the U.S. but it’s unknown if that includes the recent closures or not, so it could be even less than that.
The aim now is to restructure its operations and “explore strategic alternatives in order to ensure the long-term viability of the brand.”
