Wendy’s, Denny’s, and Red Lobster to Close Several Locations in 2024

A challenging year for the restaurant industry saw many chains close underperforming locations in 2024 as they work towards boosting sales in the future.

In 2024, consumers, wary of inflation, reduced their spending at restaurants and looked for value and discounts when dining out. Overall U.S. restaurant visits decreased for the first 10 months of the year, according to data from industry tracker Black Box Intelligence.

The decrease in restaurant spending resulted in poor sales and a spike in bankruptcies for the industry. Twenty-six restaurant companies filed for Chapter 11 bankruptcy protection in 2024, nearly triple the number of filings in 2020 during the peak of the pandemic.

With few exceptions, casual dining chains struggled to attract customers, further complicating the challenges faced by the segment since the Great Recession. Many diners have opted for the convenience and quality promised by fast-casual chains like Chipotle or Sweetgreen over the casual dining chains that were dominant in previous decades.

Below are the restaurant chains that announced closures in 2024:

In late October, Wendy’s announced the closure of 140 underperforming locations by the end of the year, in addition to around 80 closures in the first three quarters.

Company executives decided to shut down some outdated restaurants with annual unit volumes of approximately $1 million each to enhance the company’s overall presence.

Despite the closures, Wendy’s CEO Kirk Tanner informed investors during the company’s third-quarter earnings conference call that the company expects to end 2024 with the same number of restaurants, thanks to new restaurant openings.

In May, Applebee’s parent company, Dine Brands, announced plans to close between 25 and 35 of Applebee’s U.S. locations. By late September, Applebee’s global unit count had decreased by 36 locations compared to the previous year.

Applebee’s same-store sales have declined for the last six consecutive quarters, according to company filings.

Dine Brands, which also owns IHOP, has closed more stores than it has opened every year since 2016, except for 2022.

Denny’s closed approximately 50 locations in 2024 and plans to close an additional 100 restaurants by the end of 2025. Despite this year’s closures, the 24-hour diner chain still has about 1,300 open locations.

The restaurants marked for closure are among the chain’s lowest performers, with annual unit volumes ranging from $1.9 million to $2 million, as executives mentioned during the company’s investor day in October. Once these restaurants are closed, Denny’s anticipates improvements in both its same-store sales and annual unit volumes. In the latest quarter, the chain’s same-store sales were relatively stable.

After 2025, Denny’s plans to open between 45 and 50 net new locations annually.

In November, TGI Fridays joined the list of restaurant companies that filed for bankruptcy protection. Prior to filing for Chapter 11, the chain closed 86 restaurants, starting with 36 closures in January and an additional 50 in late October.

The latest round of closures brought the chain’s total open locations worldwide to approximately 160. However, more closures could be on the horizon, as a bankruptcy court in Texas will determine TGI Fridays’ fate, potentially resulting in further closures.

Red Lobster permanently closed over 120 restaurants in 2024.

The seafood chain shut down approximately 100 locations before filing for Chapter 11 bankruptcy protection in May. Before emerging from bankruptcy with a new owner and CEO, the company terminated the leases of another 23 restaurants.

Looking ahead, Red Lobster is hoping for a resurgence in 2024, with no further restaurant closures.

Fast-casual chain Noodles & Co. announced in August that it would close about 20 locations after reviewing its entire 475-restaurant footprint.

The review was part of the company’s efforts to enhance its operations and finances following a challenging period. Noodles & Co. has also been revamping its menu, eliminating underperforming items and introducing new dishes to attract more customers.

But the…