The Two Well-Known Restaurant Chains That Close Unexpectedly in the United States

The restaurant landscape in the United States is going through a period of uncertainty. Two major chains, Denny's and TGI Fridays, have announced the closure of multiple establishments due to financial problems and market changes.

Denny's Restructures Its Restaurant Network

Denny's, with more than 70 years in the sector, confirmed that it will close between 70 and 90 locations in 2025. This measure is part of an optimization plan with which the company seeks to get rid of underperforming units and improve its profitability.

According to a corporate report published in October 2024, the company plans to close a total of 150 restaurants before the end of its fiscal year. Of these, 50 have already ceased operations in 2024, and the rest will be closed in the coming months.

The chain has not detailed which locations will close, but it did explain the reasons behind the decision. Some restaurants will be eliminated due to expired lease contracts, high renovation costs in old locations, and decreased profitability in certain areas.

Despite these measures, Denny's has assured that it will continue to innovate and strengthen its business model. The goal is to remain in an increasingly competitive industry.

TGI Fridays Faces Financial Problems and Files for Bankruptcy

Meanwhile, while Denny's is undergoing a reorganization process, TGI Fridays has had to take more drastic measures. The casual dining chain, which at its peak operated more than 600 locations in the U.S., filed for Chapter 11 bankruptcy in November 2024 due to a debt of 37 million euros.

The company had faced difficulties for years, with a progressive decline in sales since the 2009 crisis. The impact of the COVID-19 pandemic and the increase in inflation in 2024 accelerated the loss of customers. This, coupled with the rising cost of supplies, made its operation unsustainable in certain markets.

To address this crisis, TGI Fridays implemented several restructuring strategies:

• In January 2025, it sold nine restaurants to Mera Corp., a franchisee based in Mexico, for 34.5 million euros.

• It also transferred 16 locations to Yadav Enterprises, which assumed part of the company's debt.

• It rejected lease contracts in six locations in New York, New Jersey, and Maryland.

• It abruptly closed the last four restaurants in Nevada, located in Las Vegas casinos.

Currently, TGI Fridays only maintains 39 corporate restaurants in the U.S., while its network of more than 400 franchises worldwide continues to operate unchanged.

The Decline of the Restaurant Sector in the United States

The difficult situation of these chains is not an isolated case. During 2024, inflation and changes in consumption habits have impacted the entire restaurant industry. According to the Administrative Office of the U.S. Courts, business bankruptcy filings increased by 14.2% compared to the previous year, especially affecting the gastronomic sector.

The increase in costs for food, leases, and operations has made it difficult for many companies to maintain profitability. Additionally, the decrease in customers in traditional restaurants has favored the rise of fast food and delivery options.

The Future of Denny's and TGI Fridays

Denny's is confident that its reorganization strategy will allow it to optimize its branch network and strengthen its market position. TGI Fridays, meanwhile, hopes that its restructuring process will help it balance its finances and regain stability.

Both companies face significant challenges in a market that continues to evolve. The key will be their ability to adapt to new consumption habits and offer attractive proposals that allow them to remain competitive in the restaurant sector.