Wendy’s is taking a hard look at its weakest restaurants in a bid to lift itself out of a sudden slide in sales and could close hundreds of locations as it shifts its attention to service improvements and unit-volume growth.
Speaking to investors on Friday, the Dublin, Ohio-based fast-food chain said it is working with franchisees to develop plans for their struggling restaurants.
Executives suggested a range of possibilities for those locations, from investments into the assets, service and operational improvements or the sale of stores to other franchisees. Some stores could close, too, and the company suggested that this could start happening this year.
Ken Cook, the chain’s interim CEO, told analysts on Friday that a “mid-single-digit percentage” of U.S. restaurants could end up closing in the aftermath of that review. Wendy’s operates just under 6,000 locations. A mid-single-digit cut implies eventual closure of under 300 locations.
“When we look at the system today, we have some restaurants that do not elevate the brand and are a drag from a franchisee financial performance perspective,” Cook said. “The goal is to address and fix those restaurants. So in some cases that’s going to mean deploying operational improvements, deploying additional technology or equipment. In other cases, it will mean transferring those restaurants to a different operator who’s better suited to be successful in that restaurant.
“And in other cases, we ultimately will close that restaurant, which will put money back in franchisees’ pockets and enable them to reinvest both capital and resources in their remaining restaurants.”
Cook said that, as a whole, the Wendy’s franchise system is “healthy,” but added that “there are pockets of more acute financial pressure," and the company is working with those operators.
Wendy’s same-store sales declined 4.7% in the U.S., which underperformed rivals McDonald’s and Burger King by at least 710 basis points. Its sales have deteriorated all year and weakening breakfast sales is hurting that daypart. The departure earlier this year of former CEO Kirk Tanner, less than 18 months after his hiring, sent the company for a loop.
That said, the performance bested Wall Street’s relatively low expectations for the company, sending its shares up more than 4% in morning trading Friday. In addition, its recent introduction of chicken tenders, or “Tendys,” was deemed successful and could build sales momentum toward the end of this year.
But executives were not exactly running victory laps Friday. “We are acting with urgency to return U.S. comp sales to growth,” Cook said.
Wendy’s has already announced “Project Fresh,” which amounts to be a shift in focus away from unit count growth domestically to building sales within restaurants, which should improve the health of the franchisee base and could spur growth over the long term.
The company has some evidence that improving operations inside its restaurants will help. Wendy’s invested in training and hospitality at company-operated restaurants, which outperformed the system by 400 basis points. Customer-facing employees are getting additional training to improve customer experiences.
The company has also taken steps to improve its digital and delivery businesses, which has led to improvements in customer satisfaction and app store ratings, along with declines in cancellation rates, missing items and refunds, Cook said.
Wendy’s last month launched a customer segmentation study to understand what drives customers’ purchase decision to guide its marketing efforts. “We now have visibility to how consumers behave both inside the Wendy’s system, and with the competition, which will enable us to focus our media efforts on high-value audiences, and allow us to adapt quickly to shifts in consumer behavior,” Cook said.
Improving marketing could prove crucial to Wendy’s strategy to build unit volumes. Closing locations could also do that, by shifting some customers to nearby restaurants. The company already closed 140 underperforming restaurants last year.
Wendy’s unit volumes averaged $2.1 million last year and the weakening sales performance in 2025 suggests that number has dropped. A typical McDonald’s does nearly twice that.
By shifting that focus from unit growth to unit economics, executives believe that franchisee profits will improve and that will spur unit growth over the long-term. And Cook emphasized that Wendy’s is not focused on “short-term wins” but on long-term growth.
“If we improve AUVs, we are going to significantly enhance franchisee profitability, improve the overall restaurant-level economics and drive better customer experience and more demand for Wendy’s and Wendy’s restaurants,” Cook said. “That’s ultimately what we’re after here, and what we think we can achieve.”
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