Goodbye Denny’s: The reason why the restaurant chain is ramping up its plan to close between 70 to 90 locations in 2025

In October, Denny’s executives announced that they would close 150 stores by the end of 2025. In 2024 the company shuttered 88 locations and plans are continuing to close even more than expected this year.

The company has not released a complete list of the closing locations but has clarified the reasons behind the significant number of closures. As of September 2024, Denny’s operated 1,586 locations, of which 1,358 are in the United States, despite its global presence. Currently, the US states with the highest number of Denny’s locations are California (360), Texas (196), and Florida (119).

Interest in healthier options

Denny’s plans to continue closing low-performing locations and CFO Robert Verostek announced on Feb. 12 that between 70 to 90 more locations would be closed in 2025.

Several reasons can be identified to the lower performance of Denny’s family restaurants: A shift in healther eating habits is one of the reasons that fewer families are dining out at Denny’s

Denny’s also owns Keke’s Breakfast Cafe, which provides a healthier menu and helps the company reach a different customer base. The company views this separate brand as complementary to Denny’s rather than a competitor.

Moreover, Denny’s is expanding the availability of alcohol on their menus to compete with other chains that offer these beverages. Traditionally recognized for breakfast, alcohol has not been a primary focus for Denny’s; however, with Keke’s, the business sees a chance to broaden its offerings.

A focus on low-performing stores

But, it’s not only eating habits that are changing. Recent inflation is a factor that has hit all types of restaurants in the last couple of years. Higher prices and more instability with the current administration are are factors that are hurting the restaurant industry.

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The closures will target older, underperforming stores, as the company has discovered that new locations generate greater revenue. Alongside these closures, Denny’s is renovating multiple locations to modernize and enhance their appeal to potential customers.

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