Red Robin considers closing 70 US locations: Here's what to know
FILE - A sign is posted on the exterior of a Red Robin restaurant on Dec. 18, 2024, in San Bruno, California. (Photo Illustration by Justin Sullivan/Getty Images)
Restaurant chain Red Robin is the latest in a growing number of fast-food eateries that may be forced to close underperforming locations amid financial difficulties.
The chain this week announced that it’s weighing plans to potentially close dozens of U.S. locations.
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Here’s what to know:
Restaurant chain Red Robin may close 70 locations
What we know:
Red Robin said it's considering the potential closure of 70 locations once their lease expires, which is collectively over the next five years, and in the meantime is working to improve performance and build sales.
The company has already closed one location in the fourth quarter of fiscal 2024, and recorded a loss of $32.4 million in the quarter in large part from the "review of underperforming restaurants."
Red Robin, which has nearly 500 restaurants that are both company-owned and franchised, plans to sell three properties during the first quarter of fiscal 2025. The sale of those locations is expected to generate $5.8 million, which the company anticipates will be used in part to repay its debt.
Nearly 82% of restaurants are company-owned, while 18.3% are franchised, according to its website – located across 39 states and in one Canadian province.
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What we don't know:
Red Robin did not share which restaurant locations could potentially face closures.
What they're saying:
While financial results for fiscal 2024 "fell well below" the company's original expectations, CEO G.J. Hart said the company has made "substantial improvements to the guest experience" to try and drive traffic back to its restaurants. During its earnings call last week, Hart told analysts that the company saw a 600 basis-point improvement in traffic trends from the first quarter of the year to the fourth.
But "while our improvement has been substantial, we have not yet reached the potential of our iconic brand and expect to drive further traffic improvements in 2025," he continued.
Big picture view:
There has been a growing number of popular restaurants that have struggled after accumulating too much debt during the pandemic. The industry expected consumer spending at restaurants to return to pre-pandemic levels once things returned to normal, but the quick-service sector started facing slowing traffic in back-to-back quarters as inflation-wary consumers continued eating at home more frequently.
Dig deeper:
Some companies, such as TGI Friday's, Denny's, Ruby Tuesday, and Red Lobster, have filed for protection in bankruptcy court. However, others, including those that didn't file for bankruptcy protection, significantly reduced their footprint to position themselves better in the current environment. Wendy's, for instance, announced in November that it was shuttering 140 underperforming locations through the end of 2024 as it looks to improve its "restaurant footprint and overall system health."
The Source: This story was written based on information shared by Red Robin Gourmet Burgers, Inc. and CEO G.J. Hart in February and March 2025. It was reported from Cincinnati, and the Associated Press contributed.