U.S. restaurant chains plan widespread location closures in 2026

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U.S. restaurant chains closures 2026

Highlights

Wendy's plans to close roughly 298 to 358 U.S. locations in early 2026 after reporting a 5.2% drop in 2025 systemwide U.S. sales.
Pizza Hut will shut 250 underperforming U.S. locations by July 1, and Papa John's targets 200 closures in North America during 2026 as part of a larger cut by 2027.
Chains including Jack in the Box, Noodles & Company, Red Robin, and Red Lobster are accelerating store closures amid inflation, wage pressures, soft traffic, and margin challenges.

Closure plans across major chains

As first reported by Business Insider, several national restaurant brands are reducing their U.S. footprints this year as they respond to underperforming stores and softer operating trends.

Wendy's said in February it intends to close roughly 5% to 6% of its U.S. restaurant base in the first half of the year, equal to about 298 to 358 locations. The company already shuttered 28 restaurants in the fourth quarter of 2025, ending that year with 5,969 U.S. locations, while company data shows systemwide U.S. sales fell 5.2% in 2025 and same-store sales declined 5.6%. In May, Wendy's said global systemwide sales totaled $3.2 billion in the first quarter, down 5.5% year over year.

Pizza Hut, through parent Yum! Brands, said in a February earnings call that it intends to close 250 underperforming U.S. locations by July 1. Papa John's said in its February earnings call that it plans to close about 200 North America restaurants in 2026 as part of a broader effort to shut 300 underperforming locations by the end of 2027, mainly older franchise units that do not indicate long-term profitability.

Jack in the Box expects 50 to 100 closures by the end of June, alongside about 20 openings, as part of its "Jack on Track" turnaround plan. Noodles & Company said in January that it expects to close between 30 and 35 locations in 2026 to improve profitability and strengthen performance after already reducing its footprint in 2025.

Other brands are also trimming operations. Red Robin says 20 possible closures were referenced on its fourth-quarter earnings call, though the company says those are not confirmed and relate to corporate locations rather than franchise sites. Red Lobster says it will close its Times Square flagship on June 14 and continues to review leases after its 2024 bankruptcy restructuring, while Denny's has seen reports of additional store closures after completing a plan to shut 150 restaurants by the end of 2025.

Industry pressure and turnaround strategies

The closures follow a difficult period for restaurant companies as inflation, wage costs and shifts in customer spending weigh on traffic and margins. Chains are increasingly combining store rationalization with menu changes, value offers and operational upgrades aimed at reviving demand.

Wendy's says its first-quarter results reflect a business still in the early stages of a turnaround, highlighting burger upgrades, new chicken sandwiches and operational improvements. Papa John's reports a 3% decline in global systemwide sales in the first quarter, with North America comparable sales down 6.4%, even as international comparable sales rise 3.6% for a sixth straight quarter of growth.

Yum! Brands says Pizza Hut faces continued category and business challenges in the U.S., even though international same-store sales perform better. Jack in the Box says sales trends improve entering the third quarter despite weak first- and second-quarter figures, while Noodles & Company says it is shifting resources toward higher-opportunity restaurants to support long-term profitable growth.

In casual dining, Red Robin says its new value menu helps lift traffic, giving the company more confidence in 2026. Red Lobster says it remains focused on strengthening the business and guest experience after emerging from Chapter 11, though it is still closing or reviewing weaker sites as it reshapes its estate.

In our earlier coverage of the May 2026 U.S. jobs report, we highlighted that nonfarm payrolls increased by 172,000 and prior months were revised higher, underscoring a still-resilient labor market. We also noted that the stronger-than-expected data complicated the near-term outlook for Fed rate cuts and kept focus on inflation and wage pressures that can influence consumer spending and operating costs.

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