- Denny's is closing dozens of underperforming locations—70–90 in 2025—aiming to improve franchise health and boost unit sales.
- Steak 'n Shake and Big Boy face massive declines, temporary closures, and legal woes as chains pivot to kiosks and refranchising.
- Industry-wide pressures—rising costs, labor shortages, delivery shifts, and sagging same-store sales—are driving hundreds of restaurant closures in 2025.
In the glow of neon signs and the sizzle of griddles, America’s diner chains have long been a comforting constant—places where families gather for endless coffee refills and stacks of pancakes that don’t judge your Saturday morning regrets.
But lately, those familiar booths are emptying out faster than a late-night rush after closing time.
From the Grand Slam breakfast haven Denny’s to the burger-and-shake joints like Steak ‘n Shake and Big Boy, these 1950s throwbacks are closing dozens of spots in 2025, squeezed by everything from inflation to shifting tastes.
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It’s a quiet crisis hitting the heart of casual dining, and it’s leaving loyal fans wondering if their go-to greasy spoon will still be there next road trip.
Take Denny’s, the 72-year-old chain that’s been slinging eggs and hash browns since Eisenhower was in the White House. The company, which operates about 1,600 U.S. locations, has been on a deliberate purge of underperformers.
In 2024 alone, they shuttered 88 restaurants—38 more than originally planned—as part of a broader strategy to trim fat and boost the brand’s health.
Heading into 2025, Denny’s upped the ante, announcing plans to close between 70 and 90 additional spots by year’s end, pushing the two-year total toward 180 closures.
The math behind it is stark: The axed locations were averaging just $1.1 million in annual sales, many after three decades in business.
“The surgical and methodical approach, which began in 2023 and will be completed by the end of this year, was specifically designed to optimize and enhance the overall health of the franchise system with the goal of returning to net flat to positive growth by 2026,” CEO Kelli Valade explained during the chain’s second-quarter earnings call in July.
It’s working, sort of—franchise average unit volumes jumped about 5%, or nearly $100,000 per store, post-closures.
But it’s a tough pill for communities where that corner Denny’s was more than just a meal stop; it was a landmark.
It’s Not All Doom and Gloom Though
Denny’s isn’t going down without a fight, though. To counter the losses, the chain aims to open 25 to 40 new restaurants in 2025, split evenly between Denny’s and its sister brand, Keke’s Breakfast Cafe.
Financially, Q2 brought mixed news: Operating revenue ticked up to $117.7 million, thanks in part to Keke’s growth, but domestic same-store sales dipped 1.3%.
Adjusted EBITDA held steady at $18.8 million, and net income came in at $2.5 million. Valade remains optimistic, pointing to cost-cutting wins like supplier negotiations and menu tweaks that shaved expenses on food waste and non-food items.
“One more important action we’re taking to improve not only the lower quintile restaurants, but the entire portfolio is protecting margins and leaving no stone unturned,” she added.
This isn’t just Denny’s story—it’s echoing across the diner landscape.
The Industry However, Is Taking a Beating
Over at Steak ‘n Shake, the 91-year-old burger chain born in Illinois during the Great Depression, the shrink ray has been on overdrive.
From 626 locations in 2018, the footprint has dwindled to around 426 by late 2024, with 200 closures in that span alone.
2025 hasn’t let up: The chain temporarily shuttered 44 spots early in the year amid a refranchising push, then permanently closed 51 company-owned units and six franchises in the first quarter, citing pandemic fallout and declining traffic.
Same-store sales dropped 7.9% in Q1, though company-operated spots saw a 6.4% uptick later.
Parent company Biglari Holdings, led by the outspoken Sardar Biglari, has poured $50 million into a makeover: Ditching table service after 78 years for kiosk ordering, embracing beef tallow fries (a move praised by Health Secretary Robert F. Kennedy Jr. as part of his “Make America Healthy Again” push), and even accepting Bitcoin payments at U.S. locations starting May.
“The new team is setting a new pace in 2025—fast and focused,” Biglari said, after overhauling leadership in operations and supply chain.
Q2 sales climbed 14.8% to $46.8 million, with profits doubling to $8.6 million, but eight more permanent closures hit this year, and 30 units remain temporarily dark for potential sales or flips to franchise partners.
It’s a high-stakes pivot from sit-down diner to quick-service contender, but locals in places like Jefferson City, Missouri—where a 38-year-old spot closed June 2—mourn the loss of that classic curb-side vibe.
Then there’s Big Boy, the 89-year-old double-decker burger icon that’s woven into Midwest nostalgia like a well-worn checkered tablecloth.
The chain’s woes exploded in Southwest Ohio this fall, where Michigan-based Big Boy Restaurant Group (BBRG) opened six locations in May under the temporary banner Dolly’s Burgers & Shakes— a nod to the mascot’s comic-book girlfriend—while locked in a nasty turf war with rival Frisch’s Big Boy.
Frisch’s, which holds exclusive rights in the region, slapped BBRG with a restraining order in March, halting the rebrand and expansion plans for over 50 stores.
The fallout? All six Dolly’s shuttered October 23, just five months after debut.
“After careful evaluation, Big Boy Restaurant Group has determined that continuing to operate under these conditions is no longer sustainable or beneficial for its employees or the brand,” BBRG stated.
They remain hopeful for a comeback post-litigation, but it’s a blow to an already battered brand.
Frisch’s itself is reeling: Down to about 30 locations from 80 in 2024, the chain faces eviction suits at over 20 spots for $4.5 million in unpaid rent.
“Due to unforeseen circumstances and various other factors, Frisch’s Big Boy Restaurants will be closing certain locations,” the company said in October, after abrupt spring closures in Ohio and Kentucky.
At least 20 more have padlocked since, leaving just 19 open statewide.
What is Causing Restaurant Chains to Close?
These aren’t isolated heartbreaks; they’re symptoms of a diner sector gasping under broader pressures.
Rising food costs, labor shortages, and a post-pandemic shift to delivery and quick bites have hammered sit-down spots.
Chains like these once thrived on nostalgia—”The reason brands are relying so heavily on blasts from the past is that nostalgic marketing campaigns offer consumers an escape from constant economic uncertainty,” notes Eric Yaverbaum, CEO of Ericho Communications—but that’s not enough when same-store sales sag and rents climb.
Across the board, 2025 has seen hundreds of closures: Red Lobster and TGI Fridays filed bankruptcy, Applebee’s lost 60 units, and even burger heavyweights like Jack in the Box plan 80-120 shutters by December.
For now, the survivors are adapting—kiosks at Steak ‘n Shake, new builds at Denny’s, maybe a truce for Big Boy.
But as another plate of hash browns scatters across America, it’s clear: The all-night diner’s golden era might be flipping to the graveyard shift.
Also Read: Experts Now Issue a Stark Recession Warning Amid Ongoing Shutdown
