Wendy’s plans to close 140 U.S. restaurants before the end of this year on top of the 100 it said it would close in May.
But in a conference call with investors Thursday, the company said those closures will be offset by new restaurant openings. Wendy’s said it plans to open between 250 and 300 restaurants this year.
Wendy’s President and CEO Kirk Tanner said the restaurants that are closing are underperforming compared to others.
“They’re just in locations that don’t build our brands,” Tanner said. “You look at a brand that’s 55 years old and some of those restaurants are quite out of date.”
Dublin, Ohio-based Wendy’s didn’t provide a list of the locations to be closed. But Tanner said they are spread out all over the country.
“Our focus is on building new restaurants because we know they deliver well over the average of these poor-performing restaurants,” he said. “We, overall, want the best restaurants for the customers and that customer experience we want to deliver.”
Wendy’s had 7,292 restaurants at the end of the third quarter. More than 80% of them are in the U.S. Wendy’s shares rose 3.5% in midday trading Friday.
Meanwhile, An Applebee’s franchise filed for bankruptcy. According Nation’s Restaurant News (NRN),eight Applebee’s locations in the Kansas City-area closed permanently, with the Kansas City Star describing the closures as abrupt.
The franchisee that operates the locations, Apple Central KC LLC, filed for Chapter 11 bankruptcy protection this week, NRN reported.
The Star reported that signs were posted at the closed locations with the following message: “This location has been permanently closed. Thank you for being our neighbor. We’ve enjoyed serving you.”
Applebee’s president Tony Moralejo issued the following statement to NRN in response to the development:
“Applebee’s restaurants are independently owned and operated by the franchisees. The closure of eight restaurants in the Kansas City market look to be the result of financial circumstances and decisions made by the franchisee.
This situation is unfortunate, and we continue to believe the Kansas City area is a great neighborhood for Applebee’s restaurants. We are exploring options about the future of these restaurants.”
Nearly 50 locations of TGI Fridays abruptly closed within the past week, an ominous sign for the chain as a reported bankruptcy looms.
According to TGI Fridays’ store locator, the chain has 164 restaurants remaining as of Monday — a sharp decline from the 213 that were open last week. It’s the largest number of closures since January, when 36 “underperforming” locations were closed.
TGI Fridays didn’t immediately respond to a request for comment about the closures, and a list of the affected locations was not released.
However, reports from local media reveals that restaurants across several US states were affected, including California, Ohio, New York, New Jersey, Florida and Missouri. Some closures even marked a complete exit from a city, notably in Columbus, Ohio; and Buffalo, New York.
At the beginning of the year, TGI Fridays had 270 US locations.
The closures come amid reports that TGI Fridays is about to file for bankruptcy. A few weeks ago, Bloomberg reported that the chain is “huddling with lenders” for a cash infusion to keep it operating while it navigates the Chapter 11 process.
TGI Fridays “will likely use Chapter 11 to seek a buyer for some portion of its business, to reject leases for unprofitable locations and to restructure its debt so it can emerge from bankruptcy with a smaller but still viable footprint,” according to John Bringardner, head of Debtwire.
