A tough year for the restaurant industry has led many chains to close underperforming locations in 2024 as they try to improve their sales in the coming years.
Inflation-weary consumers pulled back their restaurant spending in 2024 and instead asking value and discounts when they decided to dine outside their homes. Total restaurant visits in the U.S. fell in the first 10 months of this year, according to industry tracker Black Box Intelligence.
The decline in restaurant spending has led to poor sales and an increase in bankruptcies in the industry. Twenty-six restaurants filed for Chapter 11 bankruptcy protection in 2024, almost triple the number of applications in 2020, during the peak of the pandemic.
With a few exceptions, casual dining chains have particularly struggled to attract customers, adding to the challenges of a segment that has increased since the Great Recession. Since the advent of fast-casual restaurant chains, many diners have opted for the convenience and promised quality of players like Chipotle or Sweetgreen over the chains of casual restaurants that dominated in previous decades.
These are the restaurant chains that have announced they will close in 2024:
at Wendy’s
The Wendy’s logo can be seen on a sign outside the restaurant in Muncy.
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At the end of October at Wendy’s announced that it would close 140 underperforming locations by the end of the year, on top of the roughly 80 closures it had in the first three quarters.
Executives made the decision to cut some legacy restaurants that had annual unit volume of about $1 million to improve the company’s overall footprint.
Despite the closings, the company expects to end 2024 with an unchanged number of restaurants, thanks to new restaurant openings, Wendy’s CEO Kirk Tanner told investors on the company’s third-quarter earnings conference call.
Applebee’s
A sign is placed outside an Applebee’s restaurant on June 12, 2024 in Hayward, California.
Justin Sullivan | Getty Images
In May, Applebee’s parent, Dina Markesaid it plans to close between 25 and 35 of the brand’s U.S. locations. By the end of September, Applebee’s global unit count was down 36 locations compared to a year ago.
Applebee’s same-store sales have fallen for the past six consecutive quarters, according to the company.
Dine Brands, which also owns IHOP, has closed more stores than it has opened every year since 2016, with the exception of 2022.
at Denny’s
In an aerial view, customers enter a Denny’s restaurant on February 13, 2023 in Emeryville, California.
Justin Sullivan | Getty Images
at Denny’s it closed about 50 locations in 2024 and plans to close an additional 100 restaurants by the end of 2025. Including this year’s closings, the 24-hour diner chain still has roughly 1,300 locations open.
The restaurants marked for closure are in the bottom third of the chain’s performers, with annual unit volume of $1.9 million to $2 million, executives said at an investor day in October. After those restaurants close, Denny’s expects both its same-store sales and annual unit volume to improve. In the most recent quarter, the chain’s same-store sales were about the same.
After 2025, Denny’s plans to open between 45 and 50 net new locations per year.
TGI on Fridays
The TGI Fridays logo can be seen on one of their branches.
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In November, TGI Fridays joined a number of restaurant companies that filed for bankruptcy protection. But before he filed for Chapter 11, he closed 86 restaurants, starting with 36 closings in January and another 50 in late October.
The latest round of closings reduced the chain’s footprint to approximately 160 open locations worldwide. But the number could decrease even more. A Texas bankruptcy court will determine the future of TGI Fridays, which could mean the chain’s closure.
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 leaseback deal and an “endless shrimp” promotion took a toll on the company’s bottom line.
Brandon Bell | Getty Images
Red Lobster has permanently closed more than 120 restaurants in 2024.
The seafood chain closed roughly 100 locations before filing for Chapter 11 bankruptcy protection in May. Before emerging from 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 — without closing restaurants — is in the future.
Noodles & Co.
Michael Šiluk | UCG | Universal Images Group | Getty Images
Fast casual chain Noodles & Co. announced in August that it would close approximately 20 locations after reviewing its entire footprint of 475 restaurants.
The review was part of the company’s efforts to improve its operations and finances after several difficult years. Noodles & Co. he also overhauled his menu, cutting back on items that weren’t selling and adding new entrees that might appeal to more customers.
But the turnaround will take time. In the most recent quarter, the company said same-store sales fell 3.3%.
flourishing
Customers arrive at the Outback Steakhouse restaurant on November 2, 2021 in Skokie, Illinois.
Scott Olson | Getty Images
Bloomin’ BrandsOutback Steakhouse’s parent company, Carrabba’s Italian Grill and Bonefish Grill, closed 41 underperforming restaurants in 2024.
The closings affected older locations with leases dating back to the 1990s and early 2000s, executives said at the company’s February earnings conference call. To make the decision, the company weighed the sales and traffic of the locations, as well as the costs of investing in improving the locations. Most of the closures were desert 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.
