Battle of the Burgers: Wendy's plans to close more than 100 branches by the end of the year

The latest headlines from our reporters across the U.S. are delivered straight to your inbox every weekday

Your briefing on the latest headlines from across the US

Another popular restaurant chain has announced that it will be closing its branches.

Wendy's announced Thursday that it will close 140 underperforming locations during the year.

The company hopes that by closing stores it will be able to expand better in the future and improve overall health, it said Restaurant business online.

Wendy's expects to open 250 to 300 new locations worldwide this year. The company, which operates 7,292 locations worldwide, has already closed 111 locations in the first three quarters of 2024. These stores included 78 franchise stores and six corporate locations across the United States. The stores selected for closure only generated $1.1 million or less in sales each year.

The decision comes following an internal site review by Wendy's. According to Kirk Tanner, the company's CEO, stores had to demonstrate that they “meet our sales expectations, have the profitability to drive growth and deliver the Wendy's brand experience to customers.”

“We designed this initiative to ensure that many of these units are replaced over time with new restaurants in better locations with significantly improved sales and profitability,” Tanner said. In an earnings call, he added that by year's end, Wendy's will have actually added 500 new restaurants over the past 24 months.

While store closures are usually not a good sign, Wendy's has seen sales increase since the last quarter. This is partly due to the “Krabby Patty” commercials associated with “SpongeBob SquarePants.” According to Restaurant Business Online, the cartoon gimmick, which appeals to children and offers a nostalgic nod to younger adults, has performed better than the company expected.

Fast food restaurants have had a tough time this year. As Americans' wallets shrink, so do the profits of quick-service restaurants like Wendy's and McDonald's.

Both burger joints and competitor Burger King have introduced value meals this year to bring customers back. A survey earlier this year found that around 80 percent of respondents viewed fast food as a luxury purchase.