Denny's Might Be On Its Way Out After Announcing 150 Closures

Known for its breakfast menu and touted as America's Diner, Denny's has more than 1,350 restaurants in the United States. However, it's about to close 150 of those locations, accounting for just over one-tenth of its total sites. The restaurant chain announced the upcoming closures in an investor meeting on October 22, 2024, noting that 50 sites will be shut down before the end of the year. The other 100 expected closures will occur over the course of 2025, but the company didn't specify which sites it plans to close.

Executive vice president and chief global development officer Stephen Dunn was sympathetic about the announcement. Dunn said, "It's never easy to close restaurants. It's a challenge, you work with external factors, landlords. And of course, you're dealing with people's lives," per USA Today.

In addition to the closures, Denny's is considering changing its operating hours. It requires its locations to be open around the clock, making it one of many restaurants and fast-food chains open on Christmas. However, it might loosen this requirement for franchisees, citing that about 25% of its locations haven't returned to the 24/7 hours since the COVID pandemic anyway. This doesn't necessarily spell the end for the entire Denny's chain, but it isn't a good sign.

Originally called Danny's, Denny's never stops serving breakfast and even brought back the Baconalia menu in 2023 for a limited time after being absent for 10 years. With so many reasons to dine here, what gives with the closures? One reason is a traffic shift because of the pandemic that hasn't recovered, according to Dunn. The restaurant chain reported a year-over-year decline in sales for the fifth straight quarter.

However, that's not the whole picture. Dunn explained, "Some of these restaurants can be very old. You think of a 70-year-old plus brand. We have a lot of restaurants that have been out there for a very long time," per The Associated Press. The hope is that shutting down these and underperforming locations will strengthen the company's cash flow.

On top of that, Denny's acknowledged that restaurant inflation is surpassing grocery store inflation, so many people, including Denny's fans, simply can't afford dining out anywhere that costs more than a fast-food chain. Among the customers it does get, the restaurant has noticed adults ordering from the kid's menu to save money.