Restaurant closures could become more common in 2026 as operators continue to battle rising costs and changing consumer spending habits. New industry data suggests that as many as 10% to 15% of U.S. restaurants could be at risk this year.
Thousands of restaurants could face closure risk
According to Black Box Intelligence, between 10% and 15% of restaurant operators are considered vulnerable in 2026. The firm identified at-risk locations as those that generated 2025 sales that were at least 30% below their highest annual sales levels since 2019.
While the majority of restaurants remain financially healthy, operators that have experienced steep sales declines may struggle to offset increasing labor, food, occupancy, and operating expenses. Industry analysts say these businesses often have fewer options when economic conditions tighten.
Casual dining faces the greatest challenges
Black Box Intelligence found that 9% of full-service restaurant locations are considered at risk of closure, compared with just 4% of limited-service restaurants. Casual dining has posted a net decline in unit growth since 2022, while quick-service and fast-casual concepts have generally continued to expand.
Industry observers point to ongoing consumer trade-down behavior, with diners increasingly choosing lower-cost alternatives instead of traditional sit-down restaurants.
Major chains are already shrinking their footprints
Several restaurant brands have already announced significant reductions to their store counts this year.
Wendy’s plans to close approximately 5% to 6% of its U.S. restaurants, while Pizza Hut is expected to shutter roughly 250 locations. Papa Johns has announced plans to close about 200 North American restaurants as part of a broader effort to improve profitability.
Other chains that have announced closures or restaurant reductions include Jack in the Box, Noodles & Company, Red Robin, Denny’s, and Red Lobster.
Why closures don’t always signal trouble
Industry experts note that many companies are intentionally closing underperforming locations to strengthen their overall businesses. By eliminating weaker stores, restaurant operators can focus resources on stronger markets, improve margins, and position themselves for future growth.
Still, if current trends continue, consumers may see fewer restaurant options in some communities even as the industry’s strongest brands continue to expand elsewhere.
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