Wendy’s is closing 140 locations. It’s not all bad news

Fast food giant Wendy’s is closing 140 underperforming locations by the end of 2024 as it looks to improve its “restaurant footprint and overall system health.”

To counter the closings, however, the Ohio-based company is working to replace many of those units with “new restaurants in better locations with significantly improved sales and profitability,” Wendy’s CEO Kirk Tanner told analysts on its third-quarter earnings call.

The company thoroughly reviewed the individual restaurants to ensure they meet sales expectations and are profitable enough to support growth, and said the locations closing are “outdated and in underperforming areas,” with operating margins well below the system average. Tanner said.

“I think when you think about strengthening our system, you’re looking at a brand that’s 55 years old and some of these restaurants are just outdated,” Tanner said.

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This restaurant footprint optimization is part of a series of initiatives that Wendy’s is implementing to strengthen the brand and its operations across the company and its franchisees.

The company did not disclose where the closures will be, but Tanner noted that “it’s not a specific area.”

An exterior view of a Wendy’s restaurant. (Paul Weaver/SOPA Images/LightRocket via Getty Images/Getty Images)

Wendy’s expects the total closings in 2024 to be “offset by new restaurant openings this year, leaving our net unit growth roughly flat year-over-year,” Tanner said, adding that the company is confident it will achieve significant accelerated unit growth . of 3% to 4% in 2025.

By the end of 2024, the company said it will have opened more than 500 new restaurants over the past two years.

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A picture of a Wendy’s meal. (The Wendy’s Company via PRNewswire/Fox News)

Tanner said it is also “using data-driven insights to target high-growth trade areas” as it continues to open up new locations.

Globally, the company said it is on track to reach 250 to 300 openings for the full year.

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Wendy’s is among a growing number of chains that have tried to lure back customers through a series of promotions.

In the previous quarter, Wendy’s said it maintained “overall traffic and dollar share in the (quick-service restaurant) burger category.

Its revenue for the quarter topped analysts’ expectations, reaching $566.7 million, up 2.9% from a year earlier.