Denny's Is Closing Over 100 Underperforming Restaurants

Denny's has been "America's Diner" since 1953, and is beloved for being both a great breakfast spot and late night hangout. Sadly, the 24/7 diner brand is joining the roster of unfortunate restaurant chains that has to shutter a mass of underperforming locations. Denny's, which is home to the iconic Grand Slam Meal and fan favorite Moons Over My Hammy breakfast sandwich, said in this past Tuesday's earnings call that 150 locations will be closed over the next year. The first 50 will be closed in 2024, while the remaining 100 will cease business in 2025. 

This will leave the chain with 1,375 remaining locations scattered across the world, but just where the closures will happen has not been disclosed yet. As you'd probably guess, the company says it has chosen to shut down locations that aren't performing well, mainly in areas that don't bring in profit or are relying on infrastructure that is simply too old to be remodeled and modernized. But other changes are coming in the form of both its scaled back menu and operating hours — and the latter is one that the chain has resisted making for years now.

Most people know Denny's for being a restaurant that's open at any hour of the day or night, but now franchisees won't be required to stay open 24/7 any longer. About 25% of its restaurants hadn't revived those operating hours since pandemic restrictions eased, but now none are obligated to do so. Dining habits have changed drastically in the past few years, with younger generations drinking less alcohol (so no post-bar hopping meals) and many people eating dinner earlier in general. That combined with higher basic operating costs on labor and food have changed the way restaurant businesses run now.

Put simply, staying open all day and night no longer makes economical sense for every location. Even fast food giants like McDonald's are dealing with sales declines, as some customers simply can't justify eating out as inflationary costs creep up. Both permanent closures and bankruptcy have also been pretty widespread in the chain restaurant space this year. Red Lobster filed bankruptcy in an attempt to stay afloat and TGI Friday's is also rumored to be filing for bankruptcy in the next few days. You can check out our running list of fast food restaurant chains facing closures in 2024, and we have a feeling that this rollercoaster isn't over yet.