Denny's Faces Reality: Location Closures and Changed Opening Hours

Since 1953, Denny’s has been known as “America's Diner” and is popular both for its breakfast offerings and as a nighttime gathering place. However, now the 24/7 diner chain has joined the list of unfortunate restaurant chains that have to close a multitude of underperforming locations. During a recent earnings call, the company announced plans to close 150 locations over the next twelve months. In 2024, the first 50 locations will close, followed by the remaining 100 in 2025. This will leave 1,375 branches worldwide. Which locations will be affected by the closures has not yet been disclosed. The decision particularly affects locations that are not very profitable or are based on outdated infrastructure that cannot be modernized. In addition to the closures, the menu will be streamlined and the opening hours adjusted—a step the chain has long avoided. Denny’s is known for being open around the clock. However, in the future, franchisees will no longer be required to operate 24/7. A survey showed that 25% of the restaurants had not reinstated those hours after the end of pandemic restrictions. Changed eating habits with earlier dinners and less frequent bar visits, combined with rising operating costs, make the traditional round-the-clock operation economically unattractive at some locations. The pressure on the industry is significant, as even fast-food giants like McDonald's report declining sales and inflation is impacting customers' eating habits. In addition to Denny’s, other chains are in financial distress. For instance, Red Lobster has filed for bankruptcy to stay afloat, while rumors of an impending bankruptcy for TGI Friday's are circulating. This is likely just the beginning of a larger upheaval in the hospitality sector.