2 weeks Ago By [email protected] (Jacob Smith)
As anyone who works in the industry knows, running a restaurant is difficult at the best of times but recently it has become notably harder. During 2024, restaurant operators have had to deal with higher operations costs, staffing issues, and an increasingly competitive market. What's more, the increased prices many restaurateurs have had to implement in order to offset costs have led to some patrons turning their back on all kinds of restaurants.
While being part of a larger entity has its benefits, the challenges that face chain restaurants are much the same as those independents have to contend with. What's more, a large operation is often harder to keep afloat as attested to by . Even chains that sell burgers, one of the most popular foods in the United States, are struggling.
The one major advantage chains have over independents is the ability to close underperforming restaurants yet still remain operational as a business. In this article, Wendy's Known as one of the few chains to , Wendy's is a firm favorite of Americans all over the country. The numbers back this up; according to , Wendy's is the second largest burger chain in the United States by sales with the chain selling a whopping $12.
3 billion of product during 2023. In order to sell such vast amounts of food, Wendy's needs a lot of restaurants; it has around 6,000 on U.S.
soil alone. But not all of these are slated to make it to the end of 2024. Wendy's CFO Gunther Plosch announced in a May earning's call that the chain was planning to close approximately 100 of its restaurants.
He quickly reassured those in attendance that this was completely normal and went on to say that, over the same period, the chain plans to open between 250 and 300 new restaurants, resulting in a net gain of at least 150. While Plosch and other members of the Wendy's team have avoided stating exactly why the chain is closing these restaurants, customers of several closed stores have reported that the buildings were in a dire state and that many suffered from poor traffic volume. Given this information, it is likely that the selected restaurants were underperforming or simply not worth the cost of renovation.
Hart House Comedian Kevin Hart launched his plant-based fast food chain Hart House in August 2022. In an interview with at the time of the launch, Hart said, "I want to give people a plant-based option. If I can give people a place to have the option that's placed smack dab in the middle of where your McDonald's, Chick-fil-A, and Burger King [are], people may see a Hart House and say, 'I'm going to go plant-based today.
'" Hart House subsequently opened a further three restaurants in under a year, each specializing in plant-based burgers, sandwiches, and nuggets. In September, less than three months after Hart House's fourth location opened to the public, it was announced that . The reason behind the sudden closure was not announced although industry experts have suggested that Hart's star status led to the chain being viewed more as a novelty restaurant than a legitimate competitor in Los Angeles' fiercely competitive fast food scene.
Shake Shack Until 2024, Shake Shack had never closed a store for anything other than construction work. This is what made the announcement that the much-loved burger chain was closing nine restaurants – because of underperformance — all the more surprising. Six of the stores were located in California, two in Texas, and one in Ohio.
According to Shake Shack, these locations were underperforming due to changing demands in the area where they were situated. Some were also cannibalizing the sales of other Shake Shack locations. It is important to note that the closure of these nine stores does not translate into a decline in the burger chain's fortunes.
During the second quarter of 2024, the chain enjoyed strong sales and the total profit Shake Shack took during the quarter was nearly $3 million more than in the same quarter of 2023. In an effort to capitalize on this growth, Shake Shack's CEO is pushing for further development and is a noted supporter of adding drive-thrus to existing locations to improve the restaurants' service time. During May, company executives also announced that the chain was attempting to open 80 new restaurants throughout 2024, meaning this burger empire will be one of several , despite the aforementioned closures.
Hooters Hooters serves a variety of burgers, and gives customers the option of making their own, at all of its stores across the United States. However, the chain has still suffered some significant setbacks in 2024 with around 40 restaurants closing during the summer. These restaurants were located in Texas, Kentucky, and Florida.
In a statement shared with , a spokesperson for Hooters said, "Like many restaurants under pressure from current market conditions, Hooters has made the difficult decision to close a select number of underperforming stores. Ensuring the well-being of our staff is our priority in these rare instances." Since 2018, the chain has seen its global empire contract by about 12% and sales drop by 15%.
To make matters even worse, Hooters is currently facing $300 million in debt. If it cannot pay this back, lenders might force the chain to sell off more of its assets, including restaurants. Despite this, the chain remains adamant that the Hooters brand is still "resilient and relevant.
" It might be right now, but given the pressures facing the chain, it probably won't be for much longer. BurgerFi Since being founded in 2011, BurgerFi set itself apart by serving burgers made with hormone, antibiotic, and steroid free Angus beef. Initially, this ingredient-centered approach worked.
BurgerFi grew to 119 restaurants and even had Martha Stewart sitting on the board. However, financial trouble has dogged the company ever since it went public in 2020. Several attempts have been made to reinvigorate the brand and cut costs.
Unsurprisingly, these measures have included closing restaurants. In 2023, BurgerFi closed 14 units. This year, the chain closed a further nine.
Despite being down to 93 restaurants, BurgerFi could not stop the financial bleeding and filed for bankruptcy in September 2024. In a statement recorded by , Carl Bachmann said, "Despite the early positive indicators of the turnaround plan initiated less than a year ago, the legacy challenges facing the business necessitated today's filing." Despite the bankruptcy, BurgerFi locations remain open and operating and there is still hope that the company will be sold and revitalized under new management.
What's more, franchised locations are not involved in the bankruptcy, giving us reason to believe that at least some, if not all, of the remaining BurgerFi restaurants will remain operational for some time yet. Sonic Drive-In Sonic Drive-In boomed in popularity during the Coronavirus pandemic thanks to its old fashioned model of serving customers in their cars. In 2020, sales increased by an incredible 21%.
Despite in-restaurant dining returning many quarters ago, Sonic Drive-In has continued to thrive, seeing a net gain of 20 restaurants over 2022 and 2023. That being said, 2024 has seen this burger chain suffer a few unexpected closures. The first of these came in mid-August when MySA announced that a Sonic Drive-In location on De Zavala had closed without warning.
Several locals have posted on Reddit, noting that this has happened multiple times in the San Antonio area with some suggesting that these closures can be linked back to the same franchisee. Whether this is true or not, this closure seems to be a localized issue and not something driven by Sonic's head office. One month later, it was announced that two Sonic Drive-In restaurants in Baltimore had been closed for good.
Three locations had originally shuttered in August but only one reopened. A spokesperson for the company confirmed these closures but did not offer a reason as to why they were shuttered. Sad as these closures are, they do not put a dent in Sonic's 3,500 strong restaurant empire.
Roy Rogers Roy Rogers is a fast food chain, operating since 1968, which serves a range of burgers from a classic quarter pound cheeseburger to a Double R Bar Burger which features a beef patty, American cheese, and Smithfield ham. The chain is currently made up of 39 units after a Roy Rogers restaurant located in Cleves, Cincinnati was closed after less than two years in operation. In an interview with , Becky Matheny, a representative for the company said, "When we opened in February 2023, we were excited to bring Roy Rogers to the Cleves community.
However, despite the warm welcome and hard work from our team, sales have not met the expectations needed to sustain operations." Adding further disappointment to Roy Rogers' year was the announcement that a long planned development, that would've seen 10 new Roy Rogers locations open across Indiana, Kentucky, and Ohio, is no longer going ahead. Hardee's Hardee's has more than 1,800 restaurants located around the United States, each of which serves a range of charbroiled burgers.
However, difficult times are ahead for the chain as former CEO of Hardee's parent company, Andy Puzder indicated in an interview with . Puzder said, "There will be a lot of restaurants underperforming. Middle-performing restaurants are going to go away.
Very good-performing restaurants will become midland or low-performing restaurants." Puzder's forecast has been backed up by some recent closures. In January, Hardee's announced the closure of five restaurants in central Illinois.
Further restaurants closed in Spring Hill, Tennessee and Joplin, Missouri. In all instances, no reason was given for the closures. What makes these closures more damaging is that they come just a year after Summit Restaurant Holdings, a company that owned many Hardee's locations, filed for bankruptcy, resulting in the shuttering of 39 restaurants.
The prevalence of these restaurant closures, and Pudzer's comments, would suggest that Hardee's has a difficult stretch ahead of it. Dairy Queen With over 4,000 locations spread right across the United States, Dairy Queen is a large player in the country's fast food industry. While many customers visit the chain for its soft serve — which, unfortunately, — its burgers are also a huge draw.
Despite being a well-established chain, Dairy Queen is struggling with the same issues every other American burger-serving chain is, and as a result, several Dairy Queen locations have closed during 2024. Two closures came in March with one Dairy Queen in Batesville, Indiana being closed by the chain's head office and another in New Ulm, Minnesota being closed by its owner, Shelly Winter after bei g open for 70 years. In an interview with , Winter indicated that the COVID-19 pandemic was at least partly to blame: "Some of us have just gone through hell and back over the pandemic with just four or five people working.
We're working seven days a week. Some of us put in 50-60 hours a week. Then the customers start complaining.
They're on short fuses, and don't understand why they can't get what they want." In July, a further two Dairy Queen locations closed, one in Flower Mound, Texas and another in Louisville, Kentucky. While far from fatal to Dairy Queen, these closures indicate that both the company itself and those who own franchises are struggling to make certain Dairy Queen locations profitable.
Burbs Burgers February brought the sad news that all five locations of Burbs Burgers — a Seattle-based chain started by restaurateur Josh Henderson in 2020 — were about to close after it filed for bankruptcy. Henderson named the debt he was forced to take on during the chain's launch in the Coronavirus pandemic as one of the key reasons for the chain's failure. In an interview with , he said, "I had to have some wins, but COVID hit, and I took it right in the teeth for a bit.
Burbs was started with anchors around its legs. I think it had great potential." Henderson has voiced hopes that employees, or another business, will continue the brand on, whether by purchasing single stores or the whole chain.
However, it seems unlikely that this will happen, given that Burbs is carrying vast amounts of debt. As a result, it seems unlikely that we'll ever see Burbs' famous smash burgers ever again. Applebee's In the past few years, Applebee's has closed a number of restaurants as part of an ongoing streamlining process.
This approach saw the chain suffer a net loss of 36 restaurants during 2023 and this trend is continuing this year. Senior members of Applebee's stated that they expect the chain to close anywhere between 25 and 35 underperforming restaurants during 2024. In a statement recorded by , John Peyton, who is CEO of Applebee's parent company Dine Brands, said, "[this is a] deliberate effort to allow franchisees to close unprofitable restaurants, where the market may have moved away from them.
" Despite these closures, Applebee's does not look in danger of collapsing. In fact, the chain is gearing itself up for a period of growth commencing in 2025. This growth will see the introduction of new Applebee's restaurants that are likely to have a smaller footprint and more efficient design than those currently in operation, all in the hopes of boosting profitability.
When working in conjunction with the brand's new app, website, and limited time food offerings — including — it is hoped that these new restaurants drive a period of significant growth for Applebee's. TGI Fridays TGI Fridays serves five different burgers, including Friday's Signature Whiskey-Glaze Burger which features a beef patty, hickory-smoked bacon, and cheddar. Despite serving deluxe options like this, TGI Fridays has been struggling in recent years and, as a result, closed 36 underperforming restaurants during January.
These restaurants were spread across 12 states with the majority located in New Jersey, New York, and Massachusetts. These were not the only closures TGI Fridays has undergone this year. The chain shuttered approximately 12 restaurants during September and October.
This time the closed restaurants were located in Virginia, Pennsylvania, New York, Connecticut, North Carolina, South Carolina, Michigan, Indiana, and Minnesota. The widespread nature of these closures would suggest that they are not being caused by a regional issue. Instead, they suggest that there are significant issues facing the TGI Fridays brand.
Mounting debt and falling sales add further suggest that TGI Fridays may be heading for bankruptcy, a fate that has already befallen the company's U.K. branch.
To put it bluntly, many more TGI Fridays could be closing in the near future. Carl's Jr. As Carl's Jr.
has the same parent company as Hardee's, it is no surprise that the challenges the latter is facing are also affecting the former. To further complicate matters, Carl's Jr. has suffered a complete collapse in Australia where it has gone into voluntary administration, and 24 restaurants are set to close.
In an interview with the , restructuring services partner David Hardy said, "We will be conducting an immediate sale process of the existing store network and operations. We will be working with all stakeholders, including employees, suppliers and landlords, to maximise the outcome for all parties." It remains to be seen how these closures will affect Carl's Jr.
's operations in the United States. The chain has recently undergone a restructuring process in the hope of bringing clarity to the brand and making every aspect of it as effective as possible. Even so, we would not bet against Carl's Jr.
's Australian collapse from damaging the chain's performance on home soil. Recommended.
