Rumors have been swirling for quite some time of the imminent closure of a large number of Denny’s restaurant locations. Now, the American-born restaurant chain is reported to be closing as many as 90 restaurants this year, at least 30 more than what was originally expected. As we reported last November, the closures are Denny’s' way of ridding the brand of “underperforming locations” in order to cultivate a new culture of growth.
Starting off the year with one foot on a banana peel, Denny’s reported an unexpected decline in same-store sales in both January and February, despite finishing 2024 off fairly strong. The company has since experienced a drastic stock plunge of over 20-percent, and as a result, has allocated 150 restaurants for closure. In 2024, Denny’s closed 88 of those locations, with anywhere from 70 to 90 more scheduled for this year.
?? SIGN UP to get delicious recipes, handy kitchen hacks & more in our daily Pop Kitchen newsletter ??
“In any mature brand, when restaurants have been open that long, it is natural that trade areas can shift over time,” CFO Robert Verostek explained during an analysts earnings call on Wednesday. As per Verostek, closing more restaurants will only improve the franchisee cash flow, allowing individual restaurants to invest in the improvements they need, such as remodels.
To offer a bit more insight, the restaurants that Denny’s has already closed each had average unit volumes of under $1.1 million. These locations had been open for upwards of 30 years. Moving forward, under the direction of CEO Kelli Valade, the company plans to open 25 to 40 new restaurants between Denny’s and its sister concept, Keke’s Breakfast Cafe. The plan aims to reach average unit volumes of $2.2 million for each new location, though there might already be a hiccup in the plan.
Denny'sIMAGO / Dreamstime
At this year's annual ICR conference, Denny’s admitted that consumers seemed to be “stabilizing” after “years of inflation,” and looked to 2025 as somewhat of a return to normalcy. However, that sentiment did not last for long, as same-store sales declined 0.7-percent year over year in January 2025, and an additional 5-percent through the first couple weeks of February. Executives have pointed to bad weather and ongoing inflation as the cause for a slowdown in consumer spending, leaving the brand to see how the following months play out.
Related: This Fan-Favorite Restaurant Just Closed Its Doors For Good—Here's Why
“There's just a lot of uncertainty,” Verostek said.
Executives are optimistic that same-store sales will improve for Denny’s as the year plays out, though they are still taking a conservative approach in the meantime. By putting all faith in its three virtual brands (The Burger Den, The Meltdown and Banda Burrito), Denny’s plans to drive incremental sales during dinner and late night hours to make ends meet.
Verostek reported that Denny’s experienced same-store sales increases of 1.1-percent in the fourth quarter of 2024, which was the brand's best performance of the year. So despite this year's early setback, the brands $2, $4, $6 and $8 value menu offerings are being credited with the financial bump along with the brand's virtual retail solutions.
“Denny's is uniquely positioned to build a sizable virtual brand business, given our labor structure and these transactions over-indexing at dinner and late night when we can leverage our labor line to generate incremental profitability for the system,” Valade explained. “As we grow through this year, we are confident that we will get into that guidance range and move hopefully towards the top end.”
Up Next:
Related: McDonald’s Shares Highly-Awaited Update on Spinoff Restaurant CosMc’s
Read More Details
Finally We wish PressBee provided you with enough information of ( This Famed Breakfast Restaurant Is Closing More Locations Than Expected This Year—Here’s What's Happening )
Also on site :
- Apparent car explosion rocks Palm Springs, damages fertility clinic
- Hamas says new Gaza truce talks under way as Israel expands ground assault
- Southern California heat wave rolling in early next week