Additional Coverage:
- Wendy’s and 9 Other Major Restaurants That Are Closing in May (financebuzz.com)
Amid ongoing consumer efforts to curb spending on groceries and dining out, the restaurant industry is feeling the pinch more visibly. In May, several prominent chains announced plans to close multiple locations, grappling with softer customer traffic, rising labor expenses, and steep lease costs that continue to squeeze profit margins.
These closures generally target specific underperforming outlets rather than entire chains. Many companies are strategically exiting weaker markets or reconfiguring their operations to focus on more profitable areas. Below is an overview of 10 major restaurant chains scaling back locations this May.
1. Wendy’s
The fast-food heavyweight is set to close approximately 5% to 6% of its restaurants, amounting to hundreds of stores. Closures are primarily at older sites with declining traffic and tighter margins, particularly in franchise-dense regions such as Connecticut, where consolidations are underway.
2. Pizza Hut
Yum Brands plans to shutter 250 U.S. Pizza Hut locations during the first half of 2026, with a significant share expected in May.
The closures focus on older dine-in units that struggle to compete with delivery-centric rivals.
3. Papa John’s
Papa John’s aims to close 200 restaurants this year and another 100 next year, focusing on stores open for over a decade with annual sales below $600,000. Franchisees are streamlining their portfolios amid softening demand and rising costs.
4. Applebee’s
Parent company Dine Brands is gradually closing underperforming Applebee’s locations as it shifts toward dual-branded formats and more efficient models. May will likely see additional quiet exits, mainly at legacy standalone restaurants with uneven traffic.
5. Bahama Breeze
Darden Restaurants is winding down Bahama Breeze, closing all 28 remaining locations. Fourteen have already shuttered, with others converting to more promising Darden brands.
Closures span nine states, with Florida among the hardest hit.
6. Starbucks
Starbucks continues to trim its U.S. footprint by closing lower-performing urban and overlapping stores. The focus remains on efficiency, favoring drive-thru and pickup-heavy outlets over traditional cafes with weaker traffic.
7. Denny’s
Denny’s is also reducing store counts, particularly at older family-dining locations where remodeling costs and declining guest visits make reinvestment unattractive. More closures may occur as franchisees reassess slower markets.
8. MCL Restaurant & Bakery
The historic cafeteria chain, with roots stretching back 76 years, has closed multiple locations in Indiana and Ohio due to sales falling below sustainable levels. These closures are especially noticeable to longtime customers accustomed to traditional cafeteria service.
9. Rodney Scott’s BBQ
All Rodney Scott’s BBQ locations are temporarily closed this May amid legal and financial challenges faced by operator Pihakis Restaurant Group. The closures affect restaurants across Alabama, Georgia, Tennessee, and South Carolina, raising concerns about the brand’s future.
10. Chacho’s
Chacho’s recently shuttered its longtime Westheimer location in Houston after losing its lease, illustrating how rising rent costs continue to impact restaurant viability. Though the brand remains active elsewhere, this closure marks another site lost to lease pressures.
Looking Ahead
The May closures span diverse segments-from burgers and pizza to coffee and casual dining-highlighting broad industry challenges as restaurants adapt to rising expenses and more selective consumers. While many brands are not disappearing entirely, diners should expect fewer familiar neighborhood spots as companies concentrate on stronger markets and more efficient formats.
Financial Tips for Everyone
Regardless of your financial situation, there are steps you can take to improve your money management:
- Increase your income: Explore side hustles or ways to keep more cash in your pocket, even alongside a full-time job.
- Grow your savings: Harness the power of compound interest and consider professional advice to plan for early retirement.
- Maximize benefits: Take advantage of discounts and money-saving opportunities, especially for seniors, and review expenses like car insurance to ensure you’re getting the best rates.
As the restaurant landscape evolves, staying informed and mindful of your finances can help you navigate these changes with greater confidence.
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- Wendy’s and 9 Other Major Restaurants That Are Closing in May (financebuzz.com)