Wendy’s Plans Major Closures to Boost Profitability Across U.S.

Wendy’s is considering closing hundreds of its restaurants across the United States as part of a strategic initiative aimed at improving profitability. The company’s Interim Chief Executive Officer and Chief Financial Officer, Ken Cook, confirmed the plans in a recent statement, indicating a thorough evaluation of underperforming locations is currently underway.

The Dublin, Ohio-based fast-food chain stated that it is collaborating with U.S. franchisees to assess each restaurant’s financial performance and customer experience. “We are working with our US franchisees to evaluate each and every underperforming restaurant in our system,” Cook noted. The evaluation aims to develop actionable plans to enhance both aspects.

During a quarterly earnings call on October 27, 2023, Cook mentioned that a “mid-single-digit percentage of U.S. restaurants” could be closed as part of this optimization effort. This could potentially result in the shuttering of several hundred locations nationwide. The closures may begin at the end of this year and extend into 2026, as part of the company’s broader strategy.

Project Fresh Aims for Growth

The potential closures are linked to Wendy’s recently announced initiative, dubbed Project Fresh, which aims to drive growth and create long-term value across its U.S. locations. According to the company, the initiative is designed to address concerns regarding its current market valuation. Art Winkleblack, Chairman of the Board, expressed dissatisfaction with the company’s valuation in a press release, emphasizing the need for substantial changes.

“Execution is underway, and we are confident that Project Fresh will position Wendy’s as the industry leader,” Winkleblack stated. He highlighted the commitment to creating value for franchisees, employees, and shareholders alike, aiming for a brand that resonates positively with customers and operators.

In 2024, Wendy’s previously closed 140 U.S. restaurants but offset these closures by opening 250 new locations within the same year. Currently, the fast-food chain operates just under 6,000 restaurants across the United States.

As Wendy’s moves forward with its plans, the focus remains on enhancing operational efficiency and customer satisfaction, ensuring that the brand remains competitive within the fast-food sector. The outcome of these evaluations and the effectiveness of Project Fresh will be closely monitored by stakeholders as the company strives to navigate the challenges ahead.