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A tough year for the restaurant industry has led many chains to close underperforming locations in 2024 as they seek to improve their sales in the coming years.
Inflation-weary consumers pulled back their restaurant spending in 2024 and instead sought value and discounts when they chose to dine outside their homes. Overall visitation to US restaurants fell for the first 10 months of the year, according to data from industry tracker Black Box Intelligence.
The decrease in restaurant spending has led to weak sales and an increase in bankruptcies for the industry. Twenty-six restaurant companies filed for Chapter 11 bankruptcy the protection in 2024, almost triples the number of files in 2020, during the height of the pandemic.
With a few exceptions, casual-dining chains in particular have struggled to attract customers, adding to the segment’s challenges that have mounted since the Great Recession. Since the rise of fast-casual chains, many diners have opted for the convenience and promised quality of players such as Chipotle o Sweetgreen over the casual-dining chains that dominated in previous decades.
Here are the restaurant chains that have announced they will close in 2024:
Wendy’s
The Wendy’s logo is seen on a sign outside the restaurant in Muncy.
Paul Weaver | Lightrocket | Getty Images
At the end of October, Wendy’s announced that it will close 140 underperforming locations by the end of the year, in addition to the roughly 80 closures it had in the first three quarters.
Executives made the decision to spin off some outdated restaurants that had annual unit volumes of about $1 million each to improve the company’s overall footprint.
Despite the closings, the company expects to end 2024 with an unchanged number of restaurants, thanks to its new restaurant openings, Wendy’s CEO Kirk Tanner told investors on the company’s third-quarter earnings conference call. the company
Applebee’s
A sign is placed in front of an Applebee’s restaurant on June 12, 2024 in Hayward, California.
Justin Sullivan | Getty Images
In May, Applebee’s parent, Dine Brandssaid it planned to close between 25 and 35 of the brand’s U.S. locations. At the end of September, the number of Applebee’s global units was down by 36 places compared to the same period last year.
Applebee’s same-store sales have declined for the past 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, with the exception of 2022.
Denny
In an aerial view, customers enter a Denny’s restaurant on February 13, 2023 in Emeryville, California.
Justin Sullivan | Getty Images
Denny closed about 50 locations in 2024 and plans to close another 100 restaurants by the end of 2025. Including this year’s closings, the 24-hour diner chain still has about 1,300 locations open.
The restaurants marked for closure are in the lowest third of the chain’s performers, with annual unit volumes of $1.9 million to $2 million, executives said at the company’s investor day in October . Once those restaurants close, Denny’s expects its same-store sales and annual unit volumes to improve. In its most recent quarter, the chain’s same-store sales were nearly flat.
After 2025, Denny’s plans to open between 45 and 50 net new locations annually.
TGI Friday
The TGI Fridays logo is seen on one of their branches.
John Lamparski | Lightrocket | Getty Images
In November, TGI Fridays joined a host of restaurant companies that filed for bankruptcy protection. But before filing for Chapter 11, it closed 86 restaurants, starting with 36 closings in January and another 50 by the end of October.
The latest round of closings brought the chain’s footprint to about 160 open locations worldwide. But the count could drop further. A bankruptcy court in Texas will determine the future of TGI Fridays, which could mean closure for the chain.
Red lobster
The exterior of a Red Lobster restaurant on May 20, 2024 in Austin, Texas. Red Lobster filed for Chapter 11 bankruptcy protection after a failed lease agreement and the promotion of “infinite shrimp” backfired on the company’s revenue.
Brandon Bell | Getty Images
Red Lobster has permanently closed more than 120 restaurants by 2024.
The seafood chain closed about 100 locations before filing for Chapter 11 bankruptcy protection in May. Before filing for bankruptcy with a new owner and CEO, the company refused to lease another 23 restaurants.
But with 2024 now in the rearview mirror, Red Lobster hopes a comeback — with no more restaurant closings — is in its future.
Noodles & Co.
Michael Siluk | UCG | Universal Image Group | Getty Images
Fast-casual chain Noodles & Co. announced in August that it would close about 20 locations after overhauling its entire footprint of 475 restaurants.
The review was part of the company’s efforts to improve its operations and finances after a rocky few years. Noodles & Co. he also revamped his menu, cutting items that weren’t selling and adding new entrees that might appeal to more customers.
But the turnaround will take time. In its most recent quarter, the company said same-store sales fell 3.3%.
flowering
Customers arrive at an Outback Steakhouse restaurant on November 2, 2021 in Skokie, Illinois.
Scott Olson | Getty Images
Bloomin’ Brandsthe parent company of Outback Steakhouse, Carrabba’s Italian Grill and Bonefish Grill, has closed 41 restaurants under 2024.
The closings affected older locations with leases dating back to the 1990s and early 2000s, executives said on the company’s earnings conference call in February. To make the decision, the company weighed the sales and traffic of the locations, as well as the cost of investments to improve the locations. Most of the closures were Outback locations.
Like many other casual dining companies, Bloomin’ has struggled to grow sales in recent quarters. Its US same-store sales fell 1.5% in the third quarter.
