The Iconic Diner Chain That's Closing Dozens Of Locations In 2025
The chain restaurant market has seen a number of setbacks in the last year. Long enduring national chains continue to announce store closings and bankruptcies at an alarming pace. Red Lobster and Steak 'N Shake are still in trouble. TGI Fridays dramatically closed 49 of its American restaurants thanks to slowing traffic.
Iconic American diner chain Denny's is another beloved restaurant that has been floundering. Long touted as America's diner, cracks at Denny's began to show in the company in recent years. In 2024 it announced it would close 150 of its restaurants.
Denny's recent earnings release did not inspire confidence in restaurant fans or investors. On top of the other restaurants that are in the process of closing, more will now shutter. The diner chain is going to add another 30 locations to stores to the list of those it will close in 2025, according to the DailyMeal.
Denny's woes have become all too familiar to the restaurant business at large
Denny's is famous for its breakfast menu. The American diner has offered breakfast items 24 hours per day for decades. This restaurant chain boasted 1,350 locations at its peak, but this number has been steadily dropping in the last year.
On October 22, 2024, the restaurant company announced at an investor's meeting that it would close 150 locations. Of these, 50 were to shutter before the end of 2024. Another 100 stores were set to permanently shut their doors throughout 2025, as the DailyMeal revealed. This represented more than 10% of Denny's total locations.
Denny's offered explanations for the closures that have become all too familiar in the restaurant industry. Some of them were boring reasons such as too costly necessary building renovations and leases that were expiring. The more disturbing reason for the closures was a restaurant market that is evolving. Because of trend changes, some of their locations are not profitable as in the past.
Despite its attempts to rescue stores, Denny's will close dozens more of its locations
Denny's has made successful efforts to resuscitate some of its flagging restaurants through remodeling. These refurbished locations saw a 6.5% customer increase on a year-over-year basis. The problem has been that such renovating is challenging and costly. The chain only managed to finish 24 remodels in 2024, according to DailyMeal.
Denny's has also been rethinking its 24-hour-a-day operating model. This chain was one of the few that stayed open on major holidays like Christmas. The company is considering allowing franchisees to cut back on hours, noting that a quarter of its restaurants never returned to the old 24/7 schedule after the Covid-19 pandemic.
The results of the Denny's downsizing so far have been dramatic. More than 88 of its restaurants shuttered before the end of 2024. With the plans to close an additional 30 locations on top of the other 150 stores that were in the works, Denny's is set to shut down an additional 70 to 90 locations in 2025. If it stays the course, the end result will be roughly 180 fewer Denny's restaurants across the U.S. than there were in 2023.