The restaurant industry is undergoing significant transformations. We saw many restaurants take a hit last year with the closing of one of my favorites in my area, O’Charleys. There are several other chains that have announced their plans to reduce the number of locations in 2025. Factors such as changing consumer preferences, rising operational costs and heightened competition are driving many of these closures. Here’s a closer look at five well-known restaurants cutting back their presence.
1. Denny’s
Denny’s used to be my favorite as a kid. I loved the silver dollar pancakes and the grand slam. What once used to be a diners paradise for some good breakfast, has become less popular over time. The chain announced the closing of 150 additional locations by the end of 2025, following the closure of 85 stores in 2024. The company assures the reason for the closures coincides with declining foot traffic and underperforming franchises, with a focus on consolidating operations in more profitable areas. That involves narrowing down the menu as well, which means cutting out 51 previous menu offerings. According to Denny’s CFO, rising lease costs and changing post-pandemic dining habits are significant factors in these closures.
2. TGI Fridays
TGI Fridays was another favorite of mine. Those BBQ chicken fingers were a hit. Today, the chain has plans to close an estimated 70 locations by mid-2025. These closures will primarily affect locations in urban areas where rent costs are unsustainable. To stay afloat, the chain is shifting focus to smaller, more efficient locations and expanding its delivery and takeout services. This is in line with changing consumer preferences for local, independent dining options.
3. Subway
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Subway is another restaurant cutting back and has been downsizing for years. While I think their sandwiches have only gotten better, that’s not the case for all its customers. The chain announced they will close another 500 locations by late 2025. Factors contributing to these closures include competition from fast-casual competitors like Chipotle and declining franchisee satisfaction. They believe the best course of action to stay open and profitable is to focus on modernizing its remaining stores and improving customer experience. This move aligns with Subway’s efforts to revamp its menu and rebrand itself to appeal to younger customers.
4. Ruby Tuesday
Ruby Tuesday is another brand continuing to downsize. The brand has plans to shutter 90 more locations in 2025, following 70 closures in 2024. These closures are concentrated in smaller towns and less-populated areas where sales have stagnated. The chain is also exploring ways to adapt its menu and marketing to attract younger diners. The last time I visited, I found a smaller, older crowd. To stay more in line with other operations, they will have to compete with fast-casual trends that bring in a younger audience.
5. Red Lobster
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Another of many restaurants cutting back is Red Lobster. Their financial troubles were widely reported in 2024, particularly the $20 million loss attributed to their endless shrimp promotion. This, combined with high food costs and supply chain issues, significantly hurt the chain’s profitability. Negative customer reviews citing declining food quality and service further reduced customer traffic. Consequently, after initially closing 35 locations in 2024, the company announced plans to close at least 50 more by 2025. They aim to stabilize by focusing on coastal markets with strong seafood demand.
These closures reflect the broader challenges facing the restaurant industry, including rising costs, evolving consumer expectations, and increased competition. While these changes may disappoint loyal patrons, they represent a strategic effort by these chains to remain competitive and sustainable in an increasingly demanding market. Shoppers can expect to see more streamlined operations and an emphasis on convenience as these chains adapt to the modern dining landscape.
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