A tough year for the restaurant industry has led many chains to close underperforming locations in 2024 as they try to improve their sales in the coming years.
Inflation-weary consumers cut back on restaurant spending in 2024 and instead sought value and discounts when they decided to dine out. According to data from Black Box Intelligence, overall visits to U.S. restaurants dropped during the first 10 months of the year.
The decline in restaurant spending has led to poor sales and a sharp increase in industry bankruptcies. Twenty-six restaurant companies filed for Chapter 11 bankruptcy protection in 2024, which is almost three times the number of applications in 2020, at the height of the pandemic.
With few exceptions, casual dining chains in particular have struggled to attract customers, compounding the challenges facing this segment that have mounted since the Great Recession. Since the establishment of the fast casual chain, many customers have opted for the convenience and promised quality of players such as Chipotle Or Sweet green over the casual dining chains that dominated in previous decades.
Here are the restaurant chains that have announced closures in 2024:
Wendy
The Wendy's logo appears on a sign outside a restaurant in Muncy.
Paweł Tkacz | Light racket | Getty Images
At the end of October Wendy announced it would close 140 underperforming locations by the end of the year, in addition to about 80 closed in the first three quarters.
To improve the company's overall footprint, directors decided to close some outdated restaurants that had annual unit sales of approximately $1 million each.
Despite the closures, the company expects to finish 2024 with unchanged restaurant numbers thanks to new openings, Wendy's CEO Kirk Tanner told investors during the company's third-quarter earnings conference call.
Applebee's
A sign placed in front of an Applebee's restaurant on June 12, 2024 in Hayward, California.
Justin Sullivan | Getty Images
In May, Applebee's parent, Dine Brandssaid it plans to close 25 to 35 of the brand's U.S. locations. By the end of September, the global number of Applebee's locations was down 36 locations compared to the year-ago period.
Applebee's same-store sales have been declining for six quarters in a row, according to company data.
Dine Brands, which also owns IHOP, has closed more stores than it opened every year since 2016 except 2022.
Denny
Aerial view of customers entering a Denny's restaurant on February 13, 2023 in Emeryville, California.
Justin Sullivan | Getty Images
Denny closed about 50 locations in 2024 and plans to close an additional 100 restaurants by the end of 2025. Including this year's closures, the 24-hour restaurant chain still has about 1,300 locations open.
The restaurants slated for closure are in the bottom third of the chain's contractor list, with annual unit sales of $1.9 million to $2 million, executives said at the company's October investor day. Denny's expects both same-store sales and annual unit sales volume to improve following the closure of these restaurants. The chain's same-store sales remained roughly flat during the most recent quarter.
After 2025, Denny's plans to open 45 to 50 net new locations annually.
TGI Fridays
The TGI Fridays logo appears on one of their branches.
Jan Lamparski | Light racket | Getty Images
In November, TGI Fridays joined the group of restaurant companies that filed for bankruptcy protection. But before it filed for Chapter 11, it closed 86 restaurants, starting with 36 in January and another 50 in late October.
The latest round of closures has reduced the network's footprint to approximately 160 open locations worldwide. But the number could drop even further. A Texas bankruptcy court will determine the future of TGI Fridays, which could mean the chain's closure.
Red lobster
The exterior of a Red Lobster restaurant on May 20, 2024 in Austin, Texas. Red Lobster filed for Chapter 11 bankruptcy protection after a botched sale-leaseback deal and “endless shrimp” promotion backfired on the company's revenues.
Brandon Bell | Getty Images
In 2024, Red Lobster permanently closed over 120 restaurants.
The seafood chain closed about 100 locations before filing for Chapter 11 bankruptcy protection in May. Before filing for bankruptcy with a new owner and CEO, the company rejected leases for another 23 restaurants.
But looking back to 2024, Red Lobster is hopeful that a return – without closing the restaurant – will happen in the future.
Pasta and company
Michał Siluk | UG | Universal Image Group | Getty Images
Fast-casual chain Pasta and company announced in August that it would close about 20 locations after reviewing its entire footprint of 475 restaurants.
The review was part of the company's efforts to improve its operations and finances after several difficult years. Noodles & Co. it also overhauled its menu, removing items that weren't selling and adding new entrees that might appeal to more customers.
But it will take time to change the situation. In the most recent quarter, the company reported that same-store sales fell 3.3%.
bloom
Customers arrive at the Outback Steakhouse on November 2, 2021 in Skokie, Illinois.
Scott Olson | Getty Images
Flourishing brandsthe parent company of Outback Steakhouse, Carrabba's Italian Grill and Bonefish Grill, closed 41 underperforming restaurants in 2024.
The closures affected older locations with leases dating back to the 1990s and early 2000s, executives said during a February conference call devoted to the company's results. To make its decision, the company considered sales and traffic at the locations, as well as the cost of investments to improve the locations. Most of the closures were at locations in the Outback.
Like many casual dining companies, Bloomin' has struggled to grow sales in recent quarters. U.S. same-store sales fell 1.5% in the third quarter.