Wendy’s, Denny’s, Red Lobster Close Locations in 2024

A Rough Year for the Restaurant Industry

A rough year for the restaurant industry led many chains to close underperforming locations in 2024, as they try to improve their sales in the years to come.

Inflation-weary consumers pulled back their restaurant spending in 2024 and instead sought value and discounts when they did choose to dine outside their homes. Overall U.S. restaurant visits fell for the first 10 months of the year, according to data from industry tracker Black Box Intelligence.

The decline in restaurant spending led to weak sales and a surge 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 height of the pandemic.

With few exceptions, casual-dining chains in particular 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 like Chipotle or Sweetgreen over the casual-dining chains that dominated in the prior decades.

Here are the restaurant chains that announced closures in 2024:

### Wendy’s

In late October, Wendy’s announced it would shutter 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 Executives made the decision to prune some outdated restaurants that had annual unit volumes of about $1 million each to improve the company’s overall footprint.

### Applebee’s

In May, Applebee’s parent, Dine Brands, said it planned to shutter between 25 and 35 of the brand’s U.S. locations. By late September, Applebee’s global unit count had fallen by 36 locations compared with the year-ago period. Applebee’s same-store sales have declined for the last six straight quarters, according to company filings.

### Denny’s

Denny’s closed about 50 locations in 2024 and plans to shutter an additional 100 restaurants by the end of 2025. Including this year’s closures, the 24-hour diner chain still has roughly 1,300 open locations. The restaurants marked for closure are in the lower 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.

### TGI Fridays

In November, TGI Fridays joined the slew of restaurant companies that filed for bankruptcy protection. But before it filed for Chapter 11, it shuttered 86 restaurants, starting with 36 closures in January and another 50 in late October. The last round of closures took the chain’s footprint down to roughly 160 open locations worldwide. But the count could dwindle more. A bankruptcy court in Texas will determine TGI Fridays’ future, which could mean closures for the chain.

### Red Lobster

Red Lobster permanently shuttered more than 120 restaurants in 2024. The seafood chain closed roughly 100 locations before it filed for Chapter 11 bankruptcy protection in May. Before it exited bankruptcy with a new owner and CEO, the company rejected the leases of another 23 restaurants.

### Noodles & Co.

Fast-casual chain Noodles & Co. announced in August that it would close roughly 20 locations after reviewing its entire 475-restaurant footprint. The review was part of the company’s efforts to improve its operations and finances after a rocky few years. Noodles & Co. has also been overhauling its menu, cutting items that don’t sell and adding new entrees that might appeal to more customers.

### Bloomin’

Bloomin’ Brands, the parent company of Outback Steakhouse, Carrabba’s Italian Grill, and Bonefish Grill, shuttered 41 underperforming restaurants in 2024. The closures affected older locations with leases dating back to the 1990s and early 2000s, executives said on the company’s earnings conference call in February.

Conclusion

The restaurant industry faced a tough year in 2024, with many chains closing underperforming locations to improve their sales and finances. The industry’s struggles are a result of inflation-weary consumers pulling back their restaurant spending and seeking value and discounts. While some chains have filed for bankruptcy protection, others are working to revamp their menus and operations to attract more customers.

FAQs

Q: Why did many restaurant chains close underperforming locations in 2024?
A: The chains closed locations to improve their sales and finances, as inflation-weary consumers pulled back their restaurant spending and sought value and discounts.

Q: Which restaurant chains filed for bankruptcy protection in 2024?
A: Twenty-six restaurant companies filed for Chapter 11 bankruptcy protection in 2024, including TGI Fridays and Red Lobster.

Q: Which fast-casual chain announced closures in 2024?
A: Noodles & Co. announced it would close roughly 20 locations after reviewing its entire 475-restaurant footprint.

Q: Which casual-dining chain struggled to attract customers in 2024?
A: Applebee’s same-store sales have declined for the last six straight quarters, according to company filings.