Closed restaurants became more common in 2025, such as this Subway. | Photo by Jonathan Maze.
If it seems like there are a lot of closed restaurants out there right now, it’s because there are a lot of closed restaurants out there right now.
Numerous restaurant chains have either announced planned closures or did so quietly. They include two of the country’s five largest restaurant chains in Starbucks and Wendy’s. And they include several brands like the aforementioned burger chain along with Jack in the Box, Noodles and others, that have done all this before.
The reason for the closures is relatively simple: Sales have been weak, costs have increased and profitability has taken a hit. According to the National Restaurant Association, median pretax income has declined for both full-service and limited-service restaurants since 2019.
When profits decline, that typically yields restaurant closures and bankruptcy filings.
Restaurant chains then opt to close stores to stabilize their finances, doing so either through traditional channels or by filing for bankruptcy. Some have little choice in the matter, particularly franchisees.
Some closures are common, of course. But after multiple years of sales and profit challenges it’s more common now, to the point that a lot of restaurant companies view second-generation sites as a primary expansion strategy.
Here’s a look at the restaurant companies that announced closures last year and why.
Restaurant chain resets
Several companies announced planned closures that appear to be part of a broader real estate strategy that effectively resets their asset base, which can stabilize finances and remove weak locations from the system. Such resets can be good for brands’ long-term health, at least when coupled with strong revitalization strategies.
The biggest round of closures, based on absolute numbers, belongs to Starbucks, which in September said that it would close hundreds of locations in the U.S., which numbers about 400.
The closures, the largest number at the chain since the Great Recession, will leave the company with about 1% fewer locations than it had a year ago. The closures were of underperforming locations or those that couldn’t be retrofitted for the type of in-store environment the company wants.
Multiple other chains used similar strategies, many of them facing major challenges. The family-dining chain Denny’s in 2024 announced plans to close 150 locations and then closed more restaurants than initially planned as it worked to lift itself out of a sales slump. The company has since been taken private.
The fast-casual pizza chain &pizza announced the closure of 13 locations as part of a retrenchment, followed by a shift to franchising.
Outback Steakhouse, Noodles & Company and Red Robin all closed numerous restaurants as they reset their real estate strategies.
Another round of closures
Some of the resets announced last year were done on top of previous resets. The biggest came from Wendy’s, which said it was taking a hard look at its restaurant count and could close a “mid-single-digit” percentage of its restaurants, which we estimated would come to about 300. That followed the closure of 140 locations the announced closure in 2024 of 140 underperforming restaurants, which was done to spur more growth.
Jack in the Box announced a “block closure” program of up to 200 underperforming restaurants as part of a reconfiguration of the business under new CEO Lance Tucker. That followed a prior closing effort under former CEO Darin Harris.
Several other chains have had regular problems that simply continued last year.
Macaroni Grill, which has struggled for pretty much each of the past 20 years, closed another 12 locations and is down to nine restaurants. At one point it had 237 restaurants.
MOD Pizza flirted with bankruptcy and avoided that fate in 2024, only to close more restaurants in 2025.
Then there’s the issue with ARC Burger. Hardee’s terminated a 77-unit franchisee after it fell behind on royalty payments. ARC, owned by the same private-equity firm that owns Quiznos and Church’s, simply walked away from those restaurants. It’s worth noting that ARC acquired those locations just two years earlier from a franchisee that had filed for bankruptcy.
Indeed, many franchisees are closing locations. Some filed for bankruptcy, such as Del Taco franchisee Matador Restaurant Group, Burger King operator Consolidated Burger Holdings and EYM Cafe, a big Panera Bread franchisee. And many Subway franchisees continue to walk away from locations after leases run out.
Bankruptcies and other issues
Several companies have filed for bankruptcy over the past few years, which almost always results in closures because companies use the process to fix financial problems, which often leads to closing weak locations.
The breastaurant chain Hooters closed another 30 restaurants following its bankruptcy filing, one of the industry’s biggest.
And another fast-casual pizza chain, Pieology, filed for bankruptcy last year and closed at least 17 restaurants.
Several other companies filed for bankruptcy last year, each of which will come with its share of closures, such as the eatertainment chain Pinstripes, Bar Louie, Bertucci’s and others. The Mexican chain On the Border closed half of its locations.
Then there is Smokey Bones, the casual-dining barbecue chain. It has not filed for bankruptcy but was acquired by the brand collector Fat Brands in 2023. Fat Brands wanted the company so it could convert the restaurants into its higher-volume Twin Peaks brand. It is converting some, but is closing many other underperforming locations.
And Fat Brands is on the verge of filing for bankruptcy after missing a payment on $1.3 billion worth of bonds.
The benefits of closing
One benefit of closing underperforming restaurants is that it makes the performance of your brand appear better, at least for a time. By ridding a system of bad locations, companies can concentrate attention on the better-performing restaurants, which often yield better results.
Noodles & Company in August announced plans to close 28-32 restaurants and another 12 to 17 this year. Both figures would ultimately be on the high end—the company now suggests 72-75 total locations over the two years. Its same-store sales have thrived in the process, including 6.6% in the fourth quarter of last year.
Below is a list of the closures that were announced or which were uncovered last year. The list is certainly not comprehensive, and we’ll have a better picture this spring when Technomic releases its Top 500 Chain Restaurant Report.
