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Wendy's is closing 140 underperforming restaurants in 2024

Posted on by Kennedy
Wendy's is closing 140 underperforming restaurants in 2024

Wendy's is accelerating plans to close many of its underperforming restaurants worldwide while opening a similar number of new locations, executives announced on a conference call Thursday.

The fast-food chain will close another 140 locations this year, Wendy's Chief Financial Officer Günther Plosch said in the conference call. Revenue from these “legacy” restaurants is well below the system average, with average unit sales of about $1.1 million.

However, the company plans to replace these locations with more profitable locations with an average unit volume of $2 million or more.

About 250 to 300 new Wendy's locations are expected to open in 2024, Wendy's spokeswoman Heidi Schauer confirmed to USA TODAY.

“Following our strategic review, we now expect a similar number of closures to new openings, so we expect net unit growth to remain approximately the same in 2024,” Schauer said in a statement.

500 new Wendy's locations have been added in the last 2 years

Kirk Tanner, president and CEO of Wendy's, said on the earnings call that these underperforming restaurants will be replaced with new units in more profitable locations.

“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you think about strengthening our system, you see a brand that's 55 years old, and some of these restaurants are just outdated,” Tanner told investors.

He added that the company has already opened around 500 locations in the last two years.

How many Wendy's restaurants are there?

As of the end of the fiscal third quarter on September 29, Wendy's had 7,166 locations, including 6,010 in the U.S. and 1,156 internationally.

Executives have not confirmed which locations will be closed, but said the closures will be geographically spread across both the U.S. and worldwide.

Chains look to grow with Krabby Patty Meal, a $1 drink offering

Wendy's net income was $50.2 million, or 25 cents per share, in the fiscal third quarter ended Sept. 29, down from $58 million, or 28 cents per share, in the same period last year.

However, revenue rose to $566.7 million this year compared to $550.6 million in 2023.

Tanner said the chain is seeking growth through its new locations and offerings, including the recently introduced limited-time Krabby Patty Meal and Pineapple Under the Sea Frosty. Executives also said the company is expanding its partnership with Coca-Cola Freestyle through its current $1 promotional drink offering.

“We were excited to bring this fan favorite to life through innovations on two of our iconic core menu items, and we're executing this promotion in a way that only Wendy's can deliver,” Tanner said. “We are very pleased that the initial performance exceeded our expectations.”

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