For nearly 25 years, the sight of famished customers armed with a stack of pancakes was a common scene inside San Francisco’s only Denny’s restaurant. A bright neon sign that read “open 24 hours” beckoned city dwellers to wander in anytime for a hearty, affordable meal. But last summer, the lights went dark as the restaurant abruptly closed for good.
That August, franchise owner Chris Haque cleared out items from his restaurant and painted over the Denny’s sign after deciding to shutter due to the “tremendous” cost of doing business. Other factors were at play in Haque’s decision to call it quits, yet the store’s closure would not be an isolated incident for the big restaurant chain, as hundreds more would follow. And not just for the Southern California-born Denny’s, but for many beloved chains across the country.
Over the past few years, Denny’s, along with dozens of America’s cherished big chain restaurants, has announced widespread closures amid what appears to be a shakeup across the industry. In February, Denny’s said it planned to downsize its footprint by closing 70 to 90 underperforming restaurants in 2025, following a total of 88 store closures the previous year. Dine Brands, which operates IHOP and Applebee’s restaurants, moved toward a dual restaurant model late last year, following a significant dip in annual revenue, while TGI Fridays permanently closed 36 restaurants across 12 states in 2024. While many CEOs claim that the closures are a strategic move to strengthen business, the shutdowns haven’t been any less concerning, given that some chains like Hooters and Red Lobster have filed for Chapter 11 bankruptcy protection. Could the closures signal a tipping point for big chain restaurants? The answer varies, according to experts.
Jot Condie, the president and CEO of the California Restaurant Association, calls the wave of closures concerning, adding that “a kaleidoscope of variables is impacting restaurant mortality rates,” especially in California, which has a set of unique obstacles for chains. Among them is California’s $20 minimum wage law, which passed in April 2024 and requires fast food chains with 60 or more locations nationally to pay employees the new wage. Some chains, like Pizza Hut, laid off staff ahead of the law passing, while other chains opted to close locations in response to the increased business costs…