Denny’s, the 24-hour family dining chain known for its Grand Slam breakfasts, is in the midst of its most sweeping contraction in decades. Over 2024 and 2025 the company has announced plans to close well over 150 underperforming locations nationwide. Executives say these actions are part of a strategic portfolio “optimization” to improve overall system performance. By October 2024, Denny’s had already shuttered roughly half of the targeted 150 restaurants. During an early 2025 earnings call, Chief Financial Officer Robert Verostek confirmed that the pace of closures would accelerate: about 70–90 additional stores were expected to close by the end of 2025. Industry reports suggest the total number of closures since 2024 could reach around 160. In short, hundreds of diners nationwide are being replaced by “Closed” signs as Denny’s management and franchisees prune low-volume locations.
Affected Markets Spanning Coasts to Heartland
The closures have been widely felt across the United States, from small towns to big cities. Finance and local news outlets have cataloged dozens of specific shutdowns in diverse regions. For example, multiple stores in New York’s Finger Lakes region — including in Canandaigua, Greece, Henrietta and other nearby towns — abruptly locked their doors as part of the wave. In Idaho, Denny’s locations in Nampa and Chubbuck were reported closed in early 2024. Several California outlets also fell victim: the Oakland Denny’s at Hegenberger Road closed at the end of January 2024, and San Francisco’s only 24-hour Denny’s on Mission Street shut down in August 2024. In Texas, the dine-in restaurants in Lubbock (Ave. Q) and New Braunfels (Frontage Road) were both recently shuttered. Further east, the only Denny’s in Bucks County, Pennsylvania, closed in mid-2024, and restaurants in Worcester, Massachusetts and Ontario, Ohio have likewise been taken offline. Smaller markets and exurbs are also affected: Ontario and Ashland, Ohio, have each lost a Denny’s, and stores in Oregon’s agricultural town of Ontario and along North Carolina’s Interstate corridors have been marked for closure.
Across all these cases, local communities reported abrupt notices — sometimes just a sign on the door — and were directed to nearby remaining Denny’s locations instead. While the exact list of closures is not officially released, Denny’s leadership has indicated that roughly 160 stores will shutter by the end of 2025, compared to 88 closures in 2024. In practical terms, this means diners nationwide are finding that their familiar late-night or family breakfast spots have quietly disappeared in the past year.
Timeline: Announcing and Accelerating Closures
The closure program unfolded in stages over 2024–2025. In October 2024 at its annual investor day, Denny’s management announced a plan to close up to 150 restaurants by the end of 2025. By that point, the company had already shuttered about 75 stores. The chain said it identified 265 of its lowest-performing restaurants and decided to close roughly 60% of those. These early closures occurred mostly in 2024, including 88 closings in total over the year.
In early 2025, executives raised the closure target. During the first-quarter earnings call in February 2025, CFO Robert Verostek said Denny’s would shutter 70–90 restaurants that year – nearly 30 more than originally forecast. He cited accelerating the closure plan as a way to “improve franchisee cash flow” and reinvest in the remaining business. By mid-2025 the chain had closed the bulk of the initially identified 150 units, and new locations beyond those were being added to the list. A FinanceBuzz analysis in late 2025 projected total closures since 2024 around 160, meaning Denny’s would effectively shut almost 10% of its domestic chain by the end of 2025.
In parallel with the closures, Denny’s has continued to open new stores and remodel existing ones. The company reported 14 net new restaurants opened in 2024 and planned roughly 20 more in 2025, alongside a revived remodel program. Thus, while dozens of diners disappear, new units are being launched — typically in higher-demand or growing markets. The timeline of closures matches a broader strategy of reallocating capital from aging, low-volume restaurants into either renovation or brand-new locations.
Reasons for Closures: Economics, Market Shifts, and Unprofitability
Company executives stress that economic and operational factors drive these closures. Denny’s has pointed to poor sales performance as the primary reason. Verostek noted that the restaurants being closed were in the bottom fifth of the chain’s performance tier, with annual sales around $1.1 million — less than half the sales of a top-tier Denny’s. Many had “average unit volumes below $1.1M” and had been open for decades. These older diners often occupy communities where dining patterns have changed. Management specifically cited shifting trade areas: post-pandemic, customer traffic has drifted away from some neighborhoods and toward newer suburbs or urban redevelopments. In other words, stores built 30 years ago no longer sit in the heart of their trade area.
Leasing and overhead also contributed. The company reported that expiring leases on underutilized sites were not being renewed. Some buildings are aging and costly to renovate, making continued operation uneconomic. In other cases, a Denny’s simply was not making enough money: franchisees detailed slim profit margins and even losses at struggling locations. For example, in North Platte, Nebraska, district managers cited “lack of sales and unprofitability” when abruptly closing the local diner. Store manager Ashlee Fisher explained that the restaurant had been losing money for months: it was paying more in wages to attract overnight workers than it earned in sales and simply could not turn a profit. In many communities, owner-operators found they could not staff all the shifts or compete with fast-food and delivery options that now command more traffic.
Labor issues compounded the problem. Like many restaurants, Denny’s has faced staffing shortages and higher labor costs. Workers’ unions and franchisees have reported difficulty recruiting for late-night and overnight shifts. The North Platte manager specifically mentioned it “struggled to find people willing to work the overnight shifts”. With wages up across the industry, a thinly trafficked diner could easily see labor costs exceed revenues. The end result was that some locations “were paying more to keep the store open and not making a profit”. In sum, an interplay of macroeconomic and local factors — weakened sales, lease issues, and labor pressures — made certain Denny’s restaurants unsustainable.
Company and Franchisee Perspectives
Denny’s corporate leaders frame the closures as deliberate, strategic decisions rather than simple retrenchment. Executive speeches emphasize that culling marginal units is necessary to “clean up the portfolio” and finance future growth. In Verostek’s words, trimming underperformers will “improve franchisee cash flow and allow them to reinvest into traffic-driving initiatives like our tested and proven remodel program”. Steve Dunn, the chain’s development chief, similarly said closing these restaurants “is strategic, [and] advantageous to a number of our franchisees as it strengthens the bottom line cash flow”.
The public statements stress that the closures free up capital for stronger parts of the system. In a media release picked up by local news outlets, Denny’s explained, “These changes are strategic business decisions that free up capital to enable our franchisees to open new restaurants in new trade areas to meet our guests where they are today.”. This language positions the closures as a pivot to growth: outdated units are cut loose so that investment can flow into modernized restaurants in more attractive locations. Indeed, Denny’s has highlighted its ongoing remodel program and franchise support. For example, the company offers financing and incentives to franchisees who remodel stores earlier than scheduled. The stated goal is to lift sales by about 6–7% in renovated restaurants, counteracting the loss of closed stores with higher productivity elsewhere.
Individual franchisees and managers have also spoken out. In the North Platte case, Denny’s corporate media team acknowledged the closures but noted the chain has “more than 1,300 restaurants in the U.S. and plans to open over 20 new locations in 2025”. However, that corporate response did not address why employees received no advance notice. Former General Manager James Fisher criticized the abrupt nature of the closure, saying he and his staff found the restaurant already being gutted when they showed up for work. These candid local voices highlight tension between corporate strategy and frontline impact.
Overall, company leaders argue that the plan will drive long-term system health. CEO Kelli Valade has told investors that accelerating closures, coupled with targeted reinvestment, is aimed at raising the chain’s average unit sales to about $2.2 million per year. In other words, the chain is accepting short-term shrinkage in order to bolster the sales and profits of the remaining restaurants. By late 2025, Valade noted the company had explored more than 40 potential buyers and determined that a combination of rejuvenation and consolidation would maximize shareholder and franchisee value.
Impact on Employees and Local Communities
The ripple effects of these closures are being felt by thousands of employees and the communities that rely on Denny’s diners. In many cases, staff received little or no notice. For instance, when the North Platte location closed in October 2025, “district leaders came in to tell us they are shutting the store down effective immediately,” a manager said. Within hours the signs were taken down and the store was gutted, leaving 17 employees suddenly jobless. Employees expressed shock and frustration at the lack of warning. “Why weren’t we given a warning?” the former manager asked, recounting that corporate attributed the decision to “a serious decline in sales” since the pandemic. Those out-of-work staff members then scrambled to find new employment amid an already tight labor market.
These closures also leave gaps in local dining scenes. Denny’s is often the only 24/7 or late-night family restaurant in smaller towns. When one closes, regular customers lose an affordable, reliable option. In the North Platte case, community members had rallied to support the restaurant after the pandemic, and their loss of Denny’s was bitter. The ex-manager thanked locals for “trying to help us revive the business” and lamented the abrupt end of those efforts. Similarly, a recent Denny’s closure in New Braunfels, Texas prompted locals to joke about migrating to rival Waffle House after decades of Denny’s breakfasts. While some residents in New Braunfels admitted they weren’t surprised by the closing, others expressed nostalgia for the diners and camaraderie they had enjoyed there.
For affected employees, franchisees have tried to mitigate hardships. In several closure notices, Denny’s redirected customers to nearby locations and quietly offered to transfer as many staff as possible. In New Braunfels (Jan 2024), a posted letter said that most of the shuttered store’s staff had been transferred to another branch in nearby Kyle. But despite such efforts, the immediate impact can still be severe. Employees have to hunt for new jobs, often in an oversupplied market, and communities lose jobs and tax revenues. Local governments sometimes scramble to find new tenants for the vacant buildings. In North Platte, city officials began discussing how the empty building might be repurposed, and neighboring businesses worried about a drop in foot traffic.
Broader Casual-Dining Sector Trends
Denny’s aggressive closures reflect a wider retrenchment in the casual dining industry. Since the pandemic, many sit-down chains have seen traffic declines and rising costs force them to shrink their footprints. Restaurant industry analysts note that 2024 was a challenging year for casual dining overall – sales grew only marginally while guest counts fell. In this environment, chains from Denny’s to TGI Fridays to Shari’s have announced closures of low-volume outlets. For example, Restaurant Dive reported in 2024 that Hooters, Waffle House competitors, and even some steakhouses were closing restaurants due to “lackluster sales and traffic”. Technical factors like high inflation, labor shortages, and tight profit margins have combined to make marginal units untenable.
In addition, changing consumer habits play a role. Many customers now favor fast-casual concepts or delivery-based dining for convenience and perceived value. Denny’s itself noted that guests’ dining preferences have evolved, and “how our guests want to dine with us have shifted” since the pandemic. Chains that fail to modernize or that are tied to fixed, high-cost dining formats are most at risk. Denny’s closures can thus be seen as part of a portfolio shake-up designed to align the brand with new market realities. By cutting old, underperforming locations, Denny’s aims to concentrate its presence where the format still resonates with consumers.
With the brand now under new ownership (see below), observers expect these trends to continue. Several industry experts have predicted more restaurant closings across casual dining in 2025 and 2026 as high borrowing costs and weak traffic persist. Denny’s move is notable because it is one of the few large chains still growing overall units; the fact that it is now reversing course signals deep shifts. The company’s strategy — mix closures with targeted openings and remodels — may serve as a template (or warning) for other chains in similar predicaments. The closures are painful, but Denny’s leaders argue they are necessary to keep the diner chain viable in the long run.
Looking Ahead
As Denny’s works through its closure plan, the final months of 2025 will be telling. The company has announced that, if shareholder approval is received, the roughly 1,300-store U.S. chain will transition to private ownership in a $620 million buyout deal slated to close in early 2026. This change in ownership could bring new strategic direction. The deal was backed by leading franchisee investors who have pledged to support Denny’s growth. CEO Kelli Valade remarked that the agreement, involving triartisan investment partners, was evaluated as the “best path forward” after a competitive auction with dozens of interested buyers. The expectation is that the incoming owners will continue the planned closures and reinvestment programs, believing the chain can regain momentum once burdensome costs are cut.
For now, hundreds of neighborhoods are saying goodbye to their local Denny’s. Some customers rue the loss of a long-standing fixture, while others simply don’t mind that a less-popular diner closed. The company’s outlook hinges on the remaining locations performing strongly enough to make up for the shuttered units. Denny’s has had success reviving same-store sales in remodeled restaurants, but whether that translates system-wide is yet to be seen. The closures have underscored the challenges facing casual dining: even established brands with recognition and decades of history are not immune to shifting markets and economics.
As Denny’s enters its next chapter under private ownership, the question for analysts is whether this streamlined, leaner footprint will allow the classic diner chain to thrive — or whether it simply foreshadows further consolidation in an unforgiving sector. One thing is clear: Denny’s and its franchisees have taken a calculated gamble that the short-term shrinkage will yield a healthier, more modern chain. The final outcome will depend on execution of remodels and new openings, and on whether consumer interest returns to the revamped Denny’s concept.