Iconic Chain Shuttering More Restaurants, Scaling Back Hours

Denny’s is closing dozens of restaurants and scaling back 24/7 service as it tries to cut costs and boost profitability after a difficult year.

Key Facts:

Denny’s closed 88 restaurants in 2024 and plans to close about 75 more in 2025.
The average closed location had been open for nearly 30 years with sales just under $1.1 million.
Operating revenue dropped from $463.9 million in 2023 to $452.3 million in 2024.
Same-store sales were down 0.2% for Denny’s and 1.7% for its sister chain, Keke’s.
Around 25% of Denny’s restaurants have stopped operating 24/7, a major post-pandemic shift.

The Rest of The Story:

Denny’s leadership says the closures are part of a long-term strategy to strengthen the brand.

CFO Robert Verostek explained that population shifts and aging restaurants made these shutdowns a necessary step.

Most of the closed stores had been operating for decades but were no longer drawing enough business to stay profitable.

Despite the drop in revenue and same-store sales, Denny’s still turned a profit in 2024, posting $28.6 million in adjusted net income.

CEO Kelli Valade has doubled down on the idea that closing underperforming stores and adjusting hours will ultimately help the chain survive.

The company has also taken a surprising step back from its plan to restore 24/7 operations nationwide.

About one-fourth of locations now close overnight during the week or no longer offer late-night hours at all.

Commentary:

Denny’s isn’t going out of business—but it’s also not thriving.

For years, the chain relied on 24/7 service and low-cost meals to attract customers.

Those days are fading.

Shrinking operations and cutting unprofitable stores is a smart business move if Denny’s wants to avoid deeper trouble down the line.

Some restaurant locations simply can’t justify staying open.

With shifting customer traffic, aging infrastructure, and higher operating costs, it makes sense to pull the plug where returns are low.

Trimming the fat now gives franchisees a better shot at reinvesting in stronger-performing stores.

Scaling back 24/7 hours may seem like a retreat, but it’s a practical response to changing habits.

Post-COVID, late-night dining isn’t what it used to be.

If customers aren’t coming in during those hours, it’s wise to stop paying the staff and utility bills needed to stay open.

Still, this is a gamble.

Denny’s brand has long been tied to round-the-clock service and a big national footprint.

Pulling back could alienate loyal customers if the company doesn’t clearly communicate why it’s making these changes—and what they can expect going forward.

But there’s also opportunity here.

Fewer stores and tighter operations could mean a cleaner, more consistent experience for diners.

If Denny’s invests those savings into menu upgrades and service quality, it could make a meaningful comeback.

The real question is whether this strategy will be enough—and whether it’s happening soon enough to keep Denny’s relevant in a crowded dining market.

The Bottom Line:

Denny’s is taking painful but necessary steps to stay alive.

Closing nearly 90 restaurants in 2024 and trimming 24/7 hours at many locations may help it tighten operations and boost long-term performance.

The brand isn’t finished yet, but the path forward requires smart execution.

If Denny’s can use this reset to focus on quality and efficiency, it still has a chance to rebuild stronger.