In this article, a challenging year for the restaurant industry in 2024 resulted in the closure of underperforming locations by many chains as they aimed to enhance their sales in the future. Inflation-weary consumers reduced their restaurant spending and sought value and discounts when dining out. Data from industry tracker Black Box Intelligence showed a decrease in overall U.S. restaurant visits for the first 10 months of the year.
The decline in restaurant spending led to weak sales and a rise in bankruptcies within the industry. In 2024, twenty companies filed for Chapter 11 bankruptcy protection, the highest number since 2020. Casual-dining chains, in particular, faced difficulties attracting customers, compounded by challenges that have persisted since the Great Recession.
The rise of fast-casual chains like Chipotle and Sweetgreen has led many diners to prefer the convenience and quality offered by these establishments over traditional casual-dining chains that were dominant in previous decades.
Several restaurant chains announced closures in 2024. Wendy’s disclosed plans to close 140 underperforming locations by the year’s end, in addition to approximately 80 closures in the first three quarters. The company aimed to enhance its overall footprint by pruning outdated restaurants with annual unit volumes of around $1 million each.
Applebee’s parent company, Dine Brands, announced the closure of 25 to 35 U.S. locations in May. By late September, Applebee’s global unit count had decreased by 36 locations compared to the previous year. Denny’s closed about 50 locations in 2024 and intends to shut down an additional 100 restaurants by the end of 2025.
TGI Fridays filed for bankruptcy protection in November after closing 86 restaurants throughout the year. Red Lobster permanently closed over 120 restaurants in 2024, with roughly 100 closures occurring before filing for Chapter 11 bankruptcy protection in May. Noodles & Co. announced the closure of around 20 locations in August as part of efforts to improve operations and finances.
Bloomin’ Brands, the parent company of Outback Steakhouse, Carrabba’s Italian Grill, and Bonefish Grill, closed 41 underperforming restaurants in 2024. The closures primarily affected older locations with leases dating back to the 1990s and early 2000s, with most being Outback locations.
