According to The Sun, Wendy’s is preparing to shut down 140 outdated restaurants as part of a strategy to enhance its profit forecasts. CEO Kirk Tanner disclosed this information during an earnings call on Thursday, indicating that the chain will close over 100 stores across the country this quarter.
Adjusting to Market Demands
Despite these closures, Wendy’s plans to open 250 to 300 new restaurants globally this year, which will result in approximately flat net unit growth, according to CFO Gunther Plosch. The decision to close underperforming locations comes amid broader challenges faced by many chain restaurants, including rising rents, inflation, and increased operational costs.
Industry Challenges
Wendy’s isn’t alone in facing financial difficulties. Recently, TGI Friday’s closed nearly 50 restaurants as the chain struggles with potential bankruptcy. Similarly, Denny’s has announced plans to close 150 locations by 2025 as part of a strategy to remodel its brand and improve overall performance.
Recent Store Closures
In the first nine months of the year, Wendy’s already shuttered 111 locations, including 78 franchised and six company-owned restaurants, as reported in a filing with the U.S. Securities and Exchange Commission. Tanner attributed these closures to the poor performance of specific locations, stating, “I have made the strategic decision to close additional restaurants this year that are outdated and located in poor performing trade areas.”
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Future Expansion Plans
While closing underperforming locations, Wendy’s is also looking ahead to future growth. Tanner noted that these closures are intended to strengthen the company’s overall economic forecast in anticipation of brand expansion in the coming years.
A Broader Restaurant Crisis
The closures at Wendy’s are part of a larger trend affecting restaurant chains across the United States. Several other companies, including Red Lobster and Buca di Beppo, have filed for bankruptcy this year, citing changing consumer behavior and the impact of inflation on dining habits. Food prices have risen, with diners paying 4% more than they did in May of last year. This trend has led many to favor home-cooked meals over dining out.
Wendy’s Global Operations
Currently, Wendy’s operates more than 7,200 locations worldwide. The chain expects about 30% of its future store openings to occur in the U.S., while the remaining 70% will be established in international markets, signaling a shift in focus as it navigates current economic challenges.
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