Advertisement
Advertisement
Advertisement
Parade

This Famed Breakfast Restaurant Is Closing 150 of Its Locations Soon—Here’s What That Means

Nathan Hutsenpiller
3 min read
Generate Key Takeaways

Denny’s is gearing up to close nearly 150 stores nationwide as part of its new growth strategy. According to Restaurant Business, the 71-year-old breakfast chain recently held an investors conference in which management identified the weakest one-fifth of the retail system as being responsible for “dragging down the healthier performers.” This crop of stores will be given a grant offer and loan accessibility in order to improve the brand’s overall consistency.

Of the 150 stores identified as weak financial performers, nearly half will be completely shut down by the end of this year, with the other half shutting down for good later in 2025. Denny’s CEO Kelli Valade told investors, “We believe this is absolutely the right thing to do to make our system stronger.”

???? SIGN UP to get delicious recipes, handy kitchen hacks & more in our daily Pop Kitchen newsletter ????

Advertisement
Advertisement

Valade’s comments come after the franchisor reported a 0.1-percent decrease in same-store sales from the Denny’s brand in this year’s third quarter alone. She also noted that the closures were necessary to reach HQ’s goals of raising the annual average store volume to $2.2 million and slapping a fresh face on the Denny’s brand. This all comes at a time where the brand has experienced significant loss in traffic across the board, resulting in a 20-percent decrease in sales. “Everyone has lost traffic. Everyone,” Valade told investors.

Denny’s chief development officer, Steve Dunn, gives the weakest performing one-fifth of the chain credit as hurting the rest of the system due to old and outdated stores and markets whose dynamic customer base had unfortunately changed. Dunn essentially quoted the company as “pruning those stores for the benefit of the survivors.”

Related: This Iconic Restaurant Is Reportedly Headed for Bankruptcy—Here's What We Know So Far

Valade attributes part of the systemwide evaluation to a major discrepancy in the overall look of storefronts from market to market. The company plans to address the aged look and inconsistent practices through a systematic renovation program referred to as Diner 2.0. The project includes financial incentives for franchisees to make the needed changes, which includes a grant of $100,000 for operators who agree to the update, paid out from a $25 million loan pool created by Denny’s.

Advertisement
Advertisement

According to Dunn, restaurants that receive a facelift can expect to see upwards of $400,000 in uplift sales, which in the past, has generated a sales boost of 6.4-percent and a traffic increase of 6.5-percent. But there is one major change that could not only affect sales, but also a subsection of customers who generally visit Denny’s after hours.

Valade revealed that nearly 25-percent of stores have opted to not operate through the night, veering further away from the brands pre-pandemic goal of having every location be open 24/7. While this is a welcomed change for the brand's financial needs, it will change the way a lot of customers dine with Denny’s. More information can be found on the impending changes here, as we stay tuned for future company moves that might be on the popular diner’s immediate horizon.

Up Next:

Related: Costco's 'Dangerous' Fan-Favorite Holiday Treat Is Back on Shelves Early, and Shoppers are Losing It

Advertisement
Advertisement