Wendy's has announced plans to shutter 140 underperforming restaurants by the end of 2024, on top of the 100 it said it would close in May. This isn’t necessarily bad news for the fast food giant, as the decision — revealed during a recent earnings call — is part of the company’s strategy to replace these closures with new openings in stronger markets.
Wendy’s CEO Kirk Tanner said on Thursday's earnings call that the closures are targeting “outdated” locations with low sales far below the system average and an average volume unit of approximately $1.1 million.
According to Tanner, the Ohio-based company plans to compensate for these closures with "new restaurants at better locations with significantly improved sales and profitability."
The move echoes the efforts of other restaurant chains looking to make a comeback following financial setbacks.
While Wendy’s hasn’t released a specific list of the locations, the closures are expected to be scattered across the country. These underperforming sites generally struggle due to high operational costs or market competition, making profitability a challenge.
"When you think about strengthening our system you look at a brand that's 55 years old and some of those restaurants are just out of date," Tanner told investors.
Wendy’s spokesperson Heidi Schauer confirmed to USA TODAY that the chain is on track to open 250 to 300 new locations in 2024. "After our strategic review, we now expect a similar number of closures as openings, so we expect net unit growth in 2024 to be roughly flat," Schauer said in a statement sent to the outlet.
The chain, in fact, has already opened over 500 new restaurants in the past two years, marking a shift toward modernized, higher-traffic locations that deliver better returns.
For the third quarter — which ended Sept. 29 — Wendy’s reported a net income of $50.2 million, or 25 cents per share, which was down from $58 million (28 cents per share) in the same period last year. Despite the dip in profit, the chain saw a revenue boost, reaching $566.7 million, up from $550.6 million in 2023.
The chain reported a 2.8% increase in same-store sales globally for the third quarter, with U.S. sales up 2.2% and international sales surging by 7.8%.
As of September, the chain operates 7,166 locations — 6,010 in the U.S. and 1,156 internationally.
For more great restaurant coverage, please sign up for our free newsletters.