Another beloved restaurant chain has announced it will close store locations.
Wendy’s announced on Thursday that it will close 140 underperforming locations throughout the remainder of the year.
The company hopes that closing the stores will leave them in a better spot to expand in the future as well as bolstering its overall health, according to Restaurant Business Online.
Wendy's said it expects to open 250 to 300 new locations around the world this year. The company, which operates 7,292 locations globally, has already closed 111 locations in the first three-quarters of 2024. Those stores included 78 franchised stores and six corporate locations in the US. The stores selected for closure generated only $1.1 million or less in revenue each year.
The decision comes on the heels of a Wendy's internal location review. Stores had to prove that they "meet our expectations for sales, have the profitability to fuel growth, and deliver the Wendy's brand experience for customers" according to Kirk Tanner, the company's CEO.
“We have designed this initiative to ensure that over time, many of these units will be replaced by new restaurants at better locations with significantly improved sales and profitability,” Tanner said. On an earnings call, he added that by the end of the year, Wendy’s will have actually added 500 new restaurants in the last 24 months.
While store closures are not typically a good sign, Wendy's has seen sales improve since the last quarter. That is, in part, due to its "SpongeBob SquarePants" tie-in "Krabby Patty" promotion. According to Restaurant Business Online, the cartoon gimmick — which appeals to kids and offers a nostalgic nod to younger adults — has performed better than the company anticipated.
Fast food restaurants have had it tough this year. As American's wallets shrink, so too do the profits of quick-stop eateries like Wendy's and McDonald's.
Both burger joints and competitor Burger King have introduced value meals this year to help draw customers back. Earlier this year a poll found that around 80 percent of respondents viewed fast food as a luxury purchase.
