If you thought last year was rough for chain restaurants…
(And, I mean, it was…)
Then buckle up, because 2025 could be even worse.
We’re barely out of January, and already six major chains have announced closures happening this year, likely with far more on the way.
(I worry that some of these could one day join this list of iconic restaurants that are now completely gone.)
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2024 saw TGI Fridays and Red Lobster enter bankruptcy as they shed dozens of stores…
Plus continued downsizing at Outback Steakhouse, P.F. Chang’s, Wendy’s, Fuddruckers, Cracker Barrel, Denny’s, Red Robin…
It’s just been an incredibly tough time to be in the restaurant industry, and unfortunately there’s likely more pain to come.
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There are a number of big trends intersecting to create what I’m calling a “perfect storm” for the restaurant industry.
Of course, the first big one is inflation.
Inflation impacts food, it impacts labor costs, in general it just makes everything tougher.
(Remember that the restaurant industry operates on pretty thin margins as it is.)
So restaurants are left with essentially three choices:
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You can either:
1. Reduce quality or portion sizes,
2. Narrow down the menu (ticking off regulars), or
3. Increase prices.
None of those is an attractive option.
And of course, it’s all compounded by the fact that people’s dining habits have just fundamentally changed.
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More people are staying home and ordering takeout (which means restaurants have to either partner with someone like DoorDash or Uber Eats who takes a cut, or invest in their own delivery apparatus), and that’s putting its own special strain on restaurants.
Think about it this way – when you’re at a restaurant and you’ve had a good meal, maybe you decide to take a look at the dessert menu and order something off it.
That doesn’t work if you already had your meal delivered. Are you going to order dessert separately, again, or just crack open a pint of ice cream from your own freezer?
And more broadly…
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This is pure speculation on my part, but I’ve noticed that the Food Network highlighting small non-chain restaurants has really opened a lot of people up to non-chain eating.
Many urban and suburban areas just have so many other options – which are, again, immediately available on DoorDash or Uber Eats – that people are feeling less need for chain food.
(That’s not to say all chains are suffering. Some are doing quite well!)
So with all that in mind, here are six chains that have already announced closures in 2025, with – unfortunately – more likely on the way.
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Denny’s announced last year that it was closing 50 underperforming restaurants in 2024 and another 100 in 2025 amid slumping sales.
Given that Denny’s operated around 1,500 restaurants before the closures began, that’s a 10% reduction in size. Ouch.
(Personally, my view is that Denny’s should think about bringing back some traditional fan favorites to woo back customers, but I digress.)
Denny’s leadership hasn’t shared which locations will close in 2025, but we’ll keep a close eye and report back as more information becomes available.
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Fridays has had a truly rough go of it.
Since entering Chapter 11 bankruptcy in November 2024, the company has been closing down restaurants left, right, and center.
At this point there are less than 130 TGI Fridays locations left, less than 50% of the number operating at the end of 2023.
And earlier this month, several more Fridays closed, including the South Shore location in Massachusetts and all four of the remaining TGI Fridays in Las Vegas.
I’m afraid there may be more pain on the way for this once iconic chain.
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Cracker Barrel hasn’t announced sweeping closures for 2025, at least not yet.
Instead, Cracker Barrel has been gradually closing underperforming restaurants over the years and even exiting a few markets.
In 2024, for example, it fully left Oregon after shutting down the last of its five stores there.
This year, so far, Cracker Barrel has exited Maine, having closed its only restaurant in South Portland.
I suspect there’s more to come here, unfortunately, so stay tuned.
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Ruby Tuesday has been struggling for years, as negative same-store sales (and bankruptcy) challenges the once-popular chain.
Unfortunately, the pain is continuing, with more restaurants closing in 2025.
One of the last Ruby Tuesdays in Connecticut closed last month, as did one of its final locations in Delaware.
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Even McDonald’s isn’t immune to the recent trend of losses.
McDonald’s has lost locations in State College (PA), Tarrant (Dallas-Fort Worth area), and Ferrisburgh (VT).
Additionally, it’s closing down three locations of its new CosMc’s concept in Texas.
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KFC just pulled its franchise agreement with its local operator in Turkey, meaning that all 283 KFCs there will be closing.
(KFC parent Yum! Brands is hoping this is a temporary speedbump; they want to continue operating in Turkey with a different partner.)
Fortunately, unlike the others on this list, the future for KFC is quite bright – more than half a dozen new KFCs are opening every day on average right now!
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So there you have it – six chains with closures already happening (or announced) in 2025.
And unfortunately, given all that we discussed earlier, I expect more pain on the way as the year progresses.
And I’m going to ask for your help:
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What chains and closures have I missed?
Leave a note in the comments so I can add them when I update this article!
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