Wendy's Strategic Closures Amid Declining Performance

Wendy’s has announced plans to close 5% to 6% of its underperforming restaurants, which translates to approximately 240 to 360 locations out of its nearly 6,000 U.S. outlets. This decision follows a review of sales performance and aims to allow franchise partners to concentrate on more profitable locations. The closures began in late 2025 and are expected to continue through the first half of 2026. Interim CEO Ken Cook emphasized that this strategy is part of a broader effort to optimize performance across the Wendy's system, referred to as "One Wendy's."

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The fast-food chain has faced significant challenges, reporting a 3.1% decline in revenue to $2.17 billion in 2025, alongside a 15% drop in net income from $194.4 million in 2024 to $165.1 million. The company also experienced a 11.3% decline in same-restaurant sales during the fourth quarter of 2025. Despite these setbacks, Wendy's remains a prominent player in the fast-food industry, ranking as the ninth most valuable restaurant brand globally with a brand value of $4.9 billion, although this represents a 4% decrease from the previous year.

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Wendy's decision to close stores is partly attributed to financial pressures on lower-income consumers, which have affected sales. The company has also noted difficulties in attracting customers during breakfast hours, despite having launched breakfast offerings nationwide in 2020. Cook indicated that while breakfast remains an important segment, flexibility in operating hours will be granted to locations that struggle with breakfast sales.

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In a statement regarding the closures, Ken Cook remarked, “By closing consistently underperforming restaurants, we are enabling our franchise partners to increase focus on locations with the greatest potential for profitable growth.” He also highlighted the importance of the newly introduced Biggie Deals platform, which offers value-priced menu options aimed at attracting cost-conscious consumers.

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Critics of Wendy's strategy have raised concerns about the potential long-term impacts of closing numerous locations, suggesting that it may hinder brand value growth and customer accessibility. The planned closures could be seen as a retreat from the competitive fast-food market, especially as the chain navigates declining sales and profitability.

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Wendy's is implementing its "Project Fresh" turnaround plan, which aims to address the challenges faced in the U.S. market while continuing to pursue international growth. The company anticipates flat global sales in 2026 as it works through these strategic changes.

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• “By closing consistently underperforming restaurants, we are enabling our franchise partners to increase focus on locations with the greatest potential for profitable growth,” — Ken Cook, Interim CEO

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• “Our fourth quarter performance was in line with our expectations, reflecting the challenges we anticipated,” — Ken Cook, Interim CEO

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