Wendy’s is closing 140 locations. It’s not all bad news

Fast food giant Wendy’s is closing 140 underperforming locations by the end of 2024 to improve its “restaurant presence and overall system health.”

However, to counter the closures, the Ohio-based company is working to replace many of those units with “new restaurants in better locations with significantly improved sales and profitability,” Wendy’s CEO Kirk Tanner told analysts on its earnings call of the third quarter.

The company has thoroughly reviewed individual restaurants to ensure they are meeting sales expectations and are profitable enough to support growth, saying the location closures are “outdated and in underperforming areas” and operating margins are well below the system average lie, said Tanner.

“I think when you think about strengthening our system, you see a brand that’s 55 years old, and some of these restaurants are just outdated,” Tanner said.

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This optimization of the restaurant footprint is part of a series of initiatives the company is taking to strengthen the brand and its operations across the company and among its franchisees.

The company did not disclose where the closures will take place, but Tanner noted that “it is not a specific area.”

An exterior view of a Wendy’s restaurant. (Paul Weaver/SOPA Images/LightRocket via Getty Images / Getty Images)

The company expects total closures in 2024 “to be offset by new restaurant openings this year, so our net business unit growth will remain approximately flat compared to last year,” Tanner said, adding that the company is confident of a significant increase to achieve accelerated restaurant growth 3 to 4% in 2025.

By the end of 2024, the company plans to have opened more than 500 new restaurants over the past two years.

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A picture of a Wendy’s meal. (The Wendy’s Company via PRNewswire / Fox News)

Tanner said it is also “leveraging data-driven insights to target high-growth commercial areas” as it continues to develop new locations.

The company is well on its way to opening 250 to 300 new stores worldwide for the year as a whole.

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Wendy’s is one of a growing number of chains trying to lure back customers with a variety of promotions.

In the previous quarter, Wendy’s said it maintained “overall traffic and dollar share in the burger (quick service restaurant) category.”

Quarterly revenue beat analysts’ expectations and came in at $566.7 million, up 2.9% year-over-year.