Denny’s announced that it will be closing 150 of its restaurants over the next year, targeting underperforming locations that are impacting the company’s financial performance. Fifty of these locations are set to close by the end of 2024, with the remaining 100 shutting down in 2025. This move will reduce Denny’s overall restaurant count to 1,375. Steve Dunn, the company’s Executive Vice President, stated that these closures are aimed at sites that are either outdated or in areas that have become unprofitable.
Additionally, Denny’s is reconsidering its longstanding 24/7 operating model. About a quarter of its restaurants haven’t returned to full-time hours since the pandemic, prompting Denny’s to relax the requirement for franchisees to stay open around the clock. Dunn acknowledged that reduced foot traffic during off-hours no longer justifies the need for 24-hour service in all locations.
Denny’s has also streamlined its menu, cutting down options from 97 to 46 items, as the company adapts to changing customer preferences and cost challenges. In a sign of budget-conscious behavior, Denny’s noted that some adults are now ordering from the kid’s menu to save money.
The company’s stock dropped 17% on Tuesday after earnings fell short of analysts’ expectations, and its shares are down 50% for the year. This significant restructuring comes amid broader industry changes as restaurants adjust hours and menus due to shifting customer habits and rising costs.
