Signs Denny's Might Not Be Around Much Longer

Denny's, the 70-year-old, familiar family diner and originator of the Grand Slam, seems to be slipping. While you may notice a few locations staggering along I-95 or sharing a space with its newly acquired brand, Keke's Breakfast Cafe, the beloved brand might not be around for much longer. The well-known restaurant chain announced that by the end of this year, 2025, it will close over 100 locations. However, as the year progresses, it looks like that number will increase to about 180 locations.

Dating back to the first Denny's, which was initially named Danny's in Lakewood, California, the diner appealed to locals who could count on bottomless cups of coffee and an array of homestyle breakfast items every day. The Denny's chain hit its stride in 1981 with 1,000 locations and continued to grow across the United States and internationally.

However, Denny's has shown several clear signs that it may not be the 24/7 go-to establishment it once was. Some locations have just run their course, the brand is also struggling to keep up with current trends, and consumers do not see a need for an affordable restaurant that they can pop into at 3 a.m. Here are those signs and more that Denny's sadly might not be around for much longer.

Food allergies and special diets have become more prominent in recent years, calling for restaurants to offer modifications. Denny's does provide an allergen guide to accommodate those affected by food allergies. However, it mentions the likelihood of cross-contamination, which may leave many guests uncertain. Specifically, Denny's Allergen guide states, "We cannot guarantee that any item is free of any allergen."

The effort to protect those with food allergies is present with Denny's guide, which, according to the FDA, is not required for restaurants. Still, the overall message is not one of confidence. Other popular restaurant chains, such as Chipotle and Olive Garden, have taken additional steps to accommodate those with food allergies. By providing a copious amount of information about allergies on its menu and avoiding ingredients that are part of the most common food allergies, Chipotle is making its brand a safe, go-to spot for its diners. Denny's currently is not, and this can be a big deterrent to many people with severe allergies and dietary restrictions.

One of the biggest telltales about a brand's future is how much profit it generates. Denny's stock (DENN) was down by half as of October 2024 compared to the previous year. Equating overall revenue from 2023 and 2024, the chain restaurant reported a loss of 11.6 million dollars, per Stock Titan. In recent financial news, notes The Motley Fool, Denny's stock crashed 22% in February 2025, worrying investors and bringing the brand close to an all-time low.

While there are a few contributing factors to the decline, Denny's management is closing many of the struggling locations with hopes of increasing the corporation's profit. The places that did not cut failed to meet an annual revenue of 1.1 million and opened approximately 30 years ago. While Denny's has not announced any plans to file for bankruptcy, many franchisees have decided to file Chapter 11 banker due to a lack of profit and negative revenue. Additionally, Denny's Corporation Reports results for 2024 list an outstanding debt of 271.9 million dollars.

The prices of most commodities have been steadily increasing in the United States, and food is no exception. The Consumer Pricing index foresees a rise in food prices continuing in 2025, which will directly affect Denny's, considering food is its significant source of earnings.

Rising food costs are not an issue for just Denny's but nearly all restaurants in the United States. However, the increase also raises a foreseeable issue for a restaurant chain that operates as a spot for an affordable meal. Denny's has been able to operate as a low-budget, affordable restaurant by reportedly choosing to dish out fake maple syrup and frozen food. It is undoubtedly a challenge to face rising costs without reflecting this on menu prices. These costs vary by location but have left some visitors sticker-shocked to find items like the Lumber Jack Slam, which was about $18 in summer 2024.

While that price may not fit Denny's "affordable" goal, it looks like things may only get worse for consumers' wallets. Just recently, a spokesperson for Denny's told CNN that, "Due to the nationwide egg shortage and increased cost of eggs, some of our restaurant locations will need to temporarily add a surcharge to every meal that includes eggs." For an all-day breakfast establishment, that may be a tricky menu item for diners to avoid, though the egg shortage is currently affecting people and restaurants everywhere.

When examining Denny's financial situation, it is worth considering the brand's expenses, such as employee wages and salaries. Labor costs account for about 30% of a restaurant's expenses before considering labor inflation of 2.5% to 3.5% mentioned in its corporate outlook for 2025.

Denny's higher employee turnover is a driving force that may increase labor expenses compared to similar brands. According to Comparably, employee retention and satisfaction at Denny's are in the lower 20%. There are significant costs when it comes to hiring new employees and training them. Finally, California, where Denny's has the most locations, recently raised the state's minimum wage to $20 per hour for fast food workers. While Denny's restaurants are not considered fast food spots, there may be pressure to meet this wage increase for current and prospective employees.

Additionally, the employment website Indeed, which includes feedback from company employees, has over 10,000 reviews on Denny's profile. Regarding company turnover, one former Denny's employee stated, "Know when you go to work but never know when you get to leave. Cause the second shift employees come in when they want to. If they are an hour late or not show up one day, they can work the next day. " This comment was posted in 2024, a couple of years after Denny's offered wellness summits and motivational meetings to boost company morale. Seems like that did not work out too well. If management and employees care this little, one can only assume how they may value their customers.

One of the biggest concerns with keeping Denny's in business is that it has been in business for 72 years, and some older locations show their age. These locations are set to close this year or have already shut down in recent years when the mass closures began. They are no longer seeing an increase in profit, are in buildings beyond repair, or have expiring leases.

While the locations too old to renovate will close, Denny's is investing in others that could use revamping. The cost of renovating is about $250,000, but with the updates, it aims to see a 6.4% increase in sales, per Restaurant Dive. These figures are an average of renovated locations that boosted traffic and profit. The corporation hopes the new, remodeled spots will positively affect guests' experiences and overall opinion of Denny's.

Additionally, the times they are-a changing. A Denny's restaurant that opened over 30 years ago may be in an area with no longer a service demand. The brand has also had to reevaluate how to appeal to its audience since the COVID-19 pandemic changed how people dine out in general, and in specific locations. If it can't keep up with some the changing industry landscapes, we're not sure how it is going to stick around, sadly.

Like most restaurants, Denny's suffered financial damage during the global pandemic in 2020 and has struggled to recover. The 24/7 concept at the root of Denny's original plan no longer applies across the board, as several locations are no longer open around the clock. Additionally, finding employees post-pandemic, especially for the graveyard shift, is another hurdle Denny's is trying to overcome. Choosing to reduce expenses on operating costs makes sense, but it may change part of what makes Denny's, well, Denny's.

As of 2023, 75% of Denny's were still open 24 hours, per Nation's Restaurant News, and the brand hopes to increase that number. The brand still boasts itself as the 24-hour diner and is proud to serve breakfast all day, but the website suggests you check the hours of specific locations since they now vary. Other well-known 24/7 establishments have struggled to reestablish themselves as always available. Denny's direct competitor, IHOP, only has about half its locations open all night as of 2024, notes CNN Business. Other popular American brands, like Walmart Superstores, also have said goodbye to being available around the clock.

Another sure sign that Denny's might not be around much longer? It seems to be replacing itself. In 2022, Denny's acquired Keke's Breakfast Cafe for 82.5 million dollars. The trendier, Florida-based daytime restaurant is stacking up where Denny's falls short. Keke appeals to a younger generation, and Denny appeals to their grandparents. Keke's embraces the enthusiasm of brunch (most open from 7 a.m. to 2:30 p.m.). Still, Denny's is confusing customers with its not-all-there 24/7 concept. Keke's is expanding, and Denny's is dwindling.

Since the COVID-19 pandemic, how people work, live, and enjoy restaurants has changed noticeably. The ability for individuals to work remotely has opened up weekday mornings and afternoons, giving daytime restaurants a boom in business aside from the traditional lunch rush or happy hour.

Keke's also prides itself on serving "hand-cracked eggs, fresh fruit cut to order," a significant improvement from the liquid eggs that are served up at Denny's. Another aspect that may appeal to breakfast customers is Keke's cocktails, with its Sunnyvale, California, location boasting a cocktail bar for the first time in the chain's history. While it is clear that Denny's acquiring Keke's is a favorable choice for the corporation and may not necessarily mean Denny's closure, it does leave some of us asking if Keke's will succeed Denny's in the long run.

Back in the day, those hankering for all-day breakfast were lucky to have Denny's. Nevertheless, now even McDonald's offers breakfast options all day. Some of Denny's main competition are IHOP, Cracker Barrel, and Waffle House. You can find these unadorned chain restaurants often right off the highway. They are affordable, and all offer a variety of basic American meals. Although they all opened within years of each other, Denny's was the first, but Waffle House currently has the most locations in the U.S.

The tricky issue is that Denny's threat of diminishing is not due to direct competition. Denny's is caught between having fast-food-quality dishes and the operating cost of a sit-down casual restaurant. Other competitors, such as Chili's and Applebee's, offer more of a neighborhood bar scene but have price points similar to Denny's. It has a few different corners of the market to compete against. For example, Applebee's has dinner specials, including dinner for two and an appetizer for just $20. Denny's offers a value menu with items starting at $2. Still, it has little to offer regarding a dinner meal besides a burger and fries, which start at $8.99.

Diners at Denny's have benefited from the freedom to order a meal exactly how they want it for decades. However, the brand has streamlined its menu and eliminated several build-your-own options to increase its profits. While the Build-Your-Own Grand Slam and Build-Your-Own Omelet are still options at the all-day breakfast spot, customers will no longer build their own burgers, starter platters, or kid's meals.

Limiting choices will save time for all front and back-of-house staff. Servers will no longer double-check requests as they put orders in, and cooks will work more efficiently with fewer customizations. In addition to nixing modifications, the brand narrowed its menu from 97 to 46 items. Denny's CEO Kelly Valadi told investors, "This new menu also led to margin improvements, given our strategic approach to highlighting our most profitable items and ones we know to be guest favorites," according to Business Insider.

It may be beneficial to present a smaller menu for several reasons. One is that buying less food lowers expenses and reduces food waste. Secondly, according to psychological research, humans may experience choice overload or feel overwhelmed when presented with a plethora of choices, especially if they are alike. Conversely, many people generally want the freedom to make their own choices, down to what veggies should be in their salads, for example. We'll just have to wait and see if this choice is beneficial to helping Denny's stick around.

One sure sign of how well a restaurant succeeds is to check out its reviews online. Sadly, Denny's Yelp has many complaints, and several locations are listed as permanently closed. Looking at a randomly selected Denny's Yelp page in California, the state with the most locations, this place is not highly recommended. Of the 297 reviews for the Harbor Boulevard Denny's in Costa Mesa, California, a whopping 135 of them are just 1-star. Most complaints are related to extensive wait times, like an hour for water, but others reflect horrible management and communication with the restaurant clientele.

In one review, Micheal shared their experience after placing an online order, "I drive over to pick it up, and when I arrive, there is a note on the door with the words "closed 4 maintenance" scribbled to the point they were barely legible. This leaves me puzzled as the website clearly states my order is ready to be enjoyed." It gets worse. The customer could walk into an unlocked, empty restaurant, assuming their order was ready and not serving dine-in. They realized nobody was there and was confronted by somebody in the parking lot asking what they were doing. The place was closed for bugs, as the Yelper continued. Shockingly, this is one of the Denny's locations that remains open.

And it's not just that one location. In other Yelp reviews from various locations, some guests describe their experiences as devastating and disappointing. They also described the food as grey, and for the overall vibe in the restaurant, one customer said they felt like they needed a shower right when they got home from Denny's. Yikes. That doesn't seem too promising a sign for it to prosper in the future.

Denny's is testing ways to reach new demographics as its numbers decline. These new marketing attempts could indicate that the company is struggling to keep up with the times and is one of the signs that it may not be around forever.

The American diner has been around for over 70 years, so it is no surprise that many people associate Denny's with an older clientele. Still, Denny's offers many specials to attract families and younger generations, in addition to a senior discount. The brand's website invites customers to join its loyalty program, which offers perks like a birthday gift, a 20% discount on their next order, and coupons to fill their inboxes. Additionally, kids eat free when they purchase an adult meal. However, restrictions do apply, and these deals vary by location.

In 2015, Denny's sought to attract Millennials and Gen-Z with its by-product "The Den" on and off college campuses. At the time, the company aimed to have 14 locations open in college towns across the country; however, Denny's web page for The Den currently lists five locations across the country: Ohio, Florida, Virginia, and Indianapolis. While the effort is there, it doesn't seem like it's been enough yet to boost Denny's favorability in those age groups.