Denny's Is Closing About 150 Restaurants Nationwide — Here's Why

A major shake-up is quietly unfolding at one of America's most iconic diner chains, prompting questions about what’s driving the sudden strategic shift.

Denny’s is closing around 150 restaurants across the U.S. by the end of 2025, citing underperformance, not its recent multi-million dollar acquisition, as the reason.

The decision is part of a broader plan to eliminate low-volume units and focus on long-term profitability.

Acquisition Announcement

The closures coincide with a separate announcement: a $620 million all-cash acquisition by TriArtisan Capital Advisors, Treville Capital Group, and Yadav Enterprises, one of the brand's largest franchisees.

The timing led to speculation that the closures were linked to the acquisition. Denny's rejected that claim.

"Recent media reports about Denny’s restaurant closures as a result of recent acquisition news are completely false," the company said. "Denny's currently has more than 1,300 restaurants in the U.S. and almost 1,500 worldwide and continues to open new restaurants."

Closures Confirmed Following Internal Review

In a 2024 investor presentation, Denny's Corporation confirmed that about 50 locations will close by the end of this year. The closures follow an internal review that evaluated restaurant demand and cash flow.

The company used a Quintile 5 Assessment to identify its weakest-performing restaurants. Of those, 60% will close, while the remaining 40% may be improved through operational upgrades.

A chart from the presentation outlines the company's strategy: close low-performing stores, open stronger ones, and invest in staff training, marketing, and lease evaluation. These initiatives are designed to improve average unit volumes (AUVs) and support future growth.

"By closing lower volume restaurants and opening higher volume restaurants, the overall health of the brand is improving," Denny's stated in its investor presentation.

One Denny's Branch Closes Abruptly Amid Staffing and Sales Issues

One of the recent closures occurred in North Platte, Nebraska, where the local Denny's abruptly shut down, according to KNOP News 2 on October 28. Employees were notified that morning, with district managers citing poor sales and financial losses.

"Today the district leaders came in to tell us they are shutting the store down effective immediately. Leaving several people without jobs," said manager Ashlee Fisher.

She explained that the restaurant had struggled for the past year to staff overnight shifts, resulting in rising labor costs and declining profitability.

With low sales and increasing expenses, the company ultimately determined the location was no longer financially viable. Within hours, the signage was removed, and the restaurant was emptied. Former employees reportedly began seeking new jobs.

The Denny’s closures come as other national retailers, including Joann Fabrics, also face widespread shutdowns driven by financial challenges and restructuring efforts.

As reported on February 25, Joann Fabrics shut down all locations following an auction that placed the struggling retailer under new ownership. The fabric and craft chain, which had filed for Chapter 11 bankruptcy for the second time in a year, saw its remaining assets auctioned off.

Retail liquidator GA Group and Joann's term lenders placed the winning bid for the struggling business during an auction on Saturday, February 22. According to federal court records, the results of the sale were expected to be approved on Wednesday, March 5, in the U.S. Bankruptcy Court for the District of Delaware.

In collaboration with its new owners, the Hudson, Ohio-based company confirmed that all locations would close following storewide liquidation sales.

In its restructuring website, the company stated that it was working with the winning bidder to ensure a structured closure that would minimize the impact on employees, vendors, and customers. Going-out-of-business sales have already begun at some locations and will continue at all stores.

The company leadership stated that they had exhausted all efforts to find a more favorable solution that would allow Joann to remain in business. However, no viable alternative emerged.

The closure marked the end of an era for the longtime fabric and craft retailer, which had served customers for more than 80 years. The company had not yet announced a final timeline for store closures.

Scott Carpenter, CEO of GA Group's Retail Solutions and Wholesale & Industrial Solutions, said the company had a long-standing relationship with Joann. He noted that GA Group had previously helped the retailer acquire its competitor, House of Fabrics, in the late 1990s and played a role in expanding its store footprint between 2006 and 2016.

As Joann prepared to shut down, Carpenter stated that the new ownership group had planned to implement a multimillion-dollar retention plan for its approximately 19,000 employees.

The plan included organizing job fairs and allowing workers time off to interview for new positions. He added that GA Group intended to handle store closures with empathy, professionalism, and efficiency.

According to the company’s FAQ page, some sales had already begun, and store closure dates were set to be announced on Joann's website and app. Customers were able to use gift cards through February 28, while discounts on fabric, sewing supplies, and home décor were already available online.

Joann had not yet provided a timeline for when all locations would officially close, but previous statements suggested the process could take several weeks.

The retailer faced ongoing financial struggles, with Creditsafe data showing delays in supplier payments. At the start of last year, about 30% of Joann's outstanding bills were overdue, and by April 2024, more than 40% were past due by up to 30 days.

The fabric and craft retailer had previously announced it was closing hundreds of stores, affecting 49 states. The closure followed Joann's second filing of bankruptcy in early 2025, after it had initially filed in early 2024 before going private.

Founded in Cleveland, Ohio, Joann started as a single store and grew into a major player in the sewing, fabric, and craft industry with a strong online presence. At the time, the decision to close "approximately 500" of its 850 locations marked a significant downturn for the company.

Store Footprint Review and Performance Analysis

In a statement to USA TODAY, the company said it aimed to "right-size its store footprint," adding, "This was a very difficult decision to make, given the major impact we know it will have on our Team Members, our customers and all of the communities we serve."

To decide which stores to close, Joann looked at performance and potential. "A careful analysis of store performance and future strategic fit for the Company determined which stores should remain operating as usual at this time," the statement read.

Bankruptcy Filing Reveals Scope of Closures

Although the company did not release an official list to the public, it had submitted the locations set to close to the court as part of its Chapter 11 bankruptcy proceedings. The filing reportedly revealed that 533 locations were marked for closure, with Hawaii standing as the only state spared.

California had been set to lose 61 stores. Florida faced 36 closures, while Michigan, Ohio, and Pennsylvania each lost 33 locations. Illinois saw 26 stores shut down, followed by New York with 24, Washington with 21, Indiana with 20, and Massachusetts with 19.

The closures were part of Joann's Chapter 11 bankruptcy proceedings, which the company had voluntarily initiated on January 15 in the U.S. Bankruptcy Court for the District of Delaware.

Joann stated that the filing was intended to "facilitate a sale process to maximize the value of its business." Despite the bankruptcy, Joann stores and Joann.com remained open, and employees continued to receive wages and benefits.

Stalking Horse Bid and Leadership Response

As part of the process, Gordon Brothers Retail Partners, LLC was designated as a "stalking horse" bidder, meaning it set a baseline offer for Joann's assets. However, the company was still actively soliciting higher and better bids, which could lead to an auction if qualified offers were submitted.

Interim CEO Michael Prendergast acknowledged the difficult decision, citing "significant and lasting challenges in the retail environment," along with the company's financial struggles and inventory constraints.

"After carefully reviewing all available strategic paths, we have determined that initiating a court-supervised sale process is the best course of action to maximize the value of the business," Prendergast said. "We hope that this process enables us to find a path that would allow JOANN to continue operating as a going concern."

Prendergast acknowledged the dedication of Joann employees, recognizing their efforts in serving customers and supporting the company's mission. He expressed gratitude for their commitment, especially amid the company's challenges in recent years.

He reassured employees and customers, including sewists, quilters, crocheters, and crafters, that despite the restructuring, Joann would remain committed to serving its creative community as it has for over eight decades.

To uphold this commitment, Joann filed motions to continue paying employees' wages and benefits while keeping operations running. The company also sought court approval to use cash collateral to maintain liquidity during restructuring.

As part of its Chapter 11 restructuring, Joann set up a dedicated site for further information. The company's customers and creditors could find more details at JOANNRestructuring.com.

Guiding the company through the process were legal powerhouse Kirkland & Ellis, financial advisor Centerview Partners LLC, and restructuring specialist Alvarez & Marsal North America, LLC.