Denny’s Is Closing Dozens More Restaurants in 2025. Here’s What We Know

Denny’s — which refers to itself as America’s Diner — is closing more locations in 2025 than previously thought. The casual dining chain has revealed that at least 30 more locations than previously announced are shutting their doors forever. Let’s look at what we know about this latest development.

Denny’s Announces More Closures

According to TODAY, Denny’s will close more locations this year than anticipated. In a call with investors on Feb. 12, Robert Verostek, the company’s chief financial officer, stated that the national restaurant chain intends to close 70 to 90 locations by 2025.

He says this “includes some closures related to lease expirations.”

In October 2024, Denny’s declared its intention to shut down 150 outlets by the end of 2024 and through 2025. If the chain closes its new upper estimate of 90 restaurants this year, it will have closed about 30 more than previously stated. Last year, the chain closed 88 sites.

“In any mature brand, when restaurants have been open that long, it is natural that trade areas can shift over time,” CEO Kelli Valade said on the investor earnings call. “Accelerating the closure of lower-volume restaurants will improve franchisee cash flow and allow them to reinvest into traffic-driving initiatives like our tested and proven remodel program.”

Verostek also mentioned how consumer spending is affected by significant weather disasters, like the recent wildfires in California and the intense snowstorms that have hit the United States.

Tariffs and avian flu have also raised customer concerns. Due to skyrocketing egg costs, Waffle House, a competitor of Denny’s breakfast business, instituted a 50-cent egg tax earlier this month. Verostek asserts that Denny’s is “working closely with our suppliers to ensure minimal disruptions” but acknowledges that worries about these outside variables are “valid.”

The business claims it is “unable to provide specific location information” regarding the shutdowns. Since its founding in 1953, the restaurant has expanded to over 1,500 locations nationwide.

The Restaurant Chain Anticipates ‘Net Growth’

Despite this setback, Denny’s is anticipated to experience “net unit growth” by this time next year as part of its goal to turn the proverbial ship around.

According to Nation’s Restaurant News, the slide title that accompanied Valade’s recent presentation at the ICR Conference in Orlando, Florida, was “Rise of a New Day.” The presentation was unquestionably positive, even though the company plans to close around 150 underperforming locations — or now possibly even more.

“For Denny’s, a reset was needed coming out of the pandemic. We’ve been evaluating the portfolio every way you can imagine and identified a group that couldn’t be rehabilitated,” Valade said at the time. “It’s tough work we know we have to do.”

By 2026, the corporation should resume net growth, she noted. The long-term estimate predicts corporation margins in the mid-teens, unit volumes reaching $2.2 million (up from $1.9 million in 2023), and net unit growth of flat to 1% annually. With general and administrative costs down 5% to 6%, net unit growth of 3%, same-store restaurant sales staying the same or slightly rising, adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) increasing by 5% to 7% annually, and debt leverage ranging from 2.5x to 3.5x, the outlook becomes even more promising when Keke’s Breakfast Cafe, which Denny’s acquired in 2022, is taken into account.

“(Consumers) came back to life in the back half of the year,” Valade said. “I’m thrilled with the positive comps, but also the sequential improvement is important.”

Valade attributed the figurative ship turning around to the casual dining chain’s new discounted menu and loyalty program. However, the fact that the chain plans to close around 150 locations seems to contradict Valade’s optimistic forecast.

The Denny’s closing locations are either unprofitable or too old to be renovated. Although 88 restaurants already closed in 2024, the company has not yet disclosed which additional locations will be impacted.