Denny’s plans to close 150 of its restaurants to improve cash flow. By the end of 2024, the company will shut down 50 underperforming locations, with an additional 100 to follow in the next year. According to Stephen Dunn, Denny’s Executive Vice President and Chief Global Development Officer, some of the closing restaurants are older establishments that are no longer viable for remodeling or are situated in unprofitable areas. He noted that, as a brand that’s over 70 years old, Denny’s has many locations that have been operating for a long time.
Current Locations and International Presence
Denny’s operates 1,358 locations across the U.S., primarily in states like California, Texas, Florida, and Arizona. Additionally, there are over 167 Denny’s restaurants internationally, with more than half located in Canada. The company has yet to specify which 150 locations will be closed.
Strategic Move for Future Growth
Dunn stated that the closure of 150 restaurants will help streamline Denny’s portfolio as the company positions itself for future growth. Following the announcement, Denny’s shares fell nearly 18% on Tuesday after the company’s quarterly earnings fell short of analysts’ expectations. Overall, the stock has declined by 50% over the financial year.
The Challenges of Closing Restaurants
Dunn acknowledged that closing restaurants is always a difficult decision, as it involves navigating external factors like landlords and the impact on employees’ lives. However, he emphasized that shutting down underperforming locations is a strategic move that benefits many franchisees by improving long-term cash flow.