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Fast Food and Restaurant Chains that are Downsizing in 2020

Fast Food and Restaurant Chains that are Downsizing in 2020

: So far, 2020 has been an unlucky year for the restaurant business, even for established chains.

Whether it’s steep competition, higher rent, or a raging global pandemic, fast food and chain restaurants shut down for all sorts of reasons. While many dining establishments faced closures before COVID-19 hit, the pandemic has had a devastating effect on the industry.

Steak ‘n Shake, established over 80 years ago, recently announced it’s shuttering 51 branches. Some restaurants, such as Applebee’s and Ruby Tuesday, relied on diners eating meals in their establishments, so they’ve had to make the sudden switch to delivery and takeout. Here are some of the fast food and restaurant chains that are downsizing in 2020.

Related: Food Inspections and Recalls Drop As COVID-19 Tests America’s Food Safety Net

1. Subway

Despite its “Eat Fresh” slogan, Subway isn’t quite fresh enough for increasingly health-conscious consumers. In 2016, the sandwich chain closed more US locations than it opened, 359 to be exact. It continued to struggle in 2017 and shut down 866 shops. That ballooned to more than 1,100 in 2018, and about the same number vanished last year.

The company’s website shows that Subway still has around 21,3000 restaurants in the US and thousands of international locations. Its efforts to bring back customers include rolling out kiosk ordering and more comfortable seating.

2. Pizza Hut

The experience of having a meal at Pizza Hut will soon be nothing but a memory because the chain is getting out of the sit-down restaurant business. It’s becoming a strictly carryout and delivery pizza chain, like Domino’s and Papa John’s.

As part of the transition, the number of Pizza Hut locations would fall from around 7,450 to about 7,000, executives told analysts on an August 2019 conference call. It will be closing over 500 underperforming restaurants over a two-year period.

3. Burger King

The home of the Whopper has been closing at least 100 restaurants per year, but more than double that number (250) were set to close in 2019. Two more have closed so far in 2020, perhaps on track to have a more predictable cutback this year compared to other fast food outlets.

Lagging locations have been on the chopping block to make way for the “Burger King of Tomorrow:” the company’s now incorporating technology such as self-order kiosks inside and digital menu boards at the drive-thru.

4. Starbucks

Your local Starbucks may have disappeared in the last year or so — but there are still close to 30,000 other locations worldwide to choose from. The coffee titan planned to close 150 of its shops in 2019. Most were in large cities that have numerous Starbucks locations.

The stores being targeted were performing poorly, which CEO Kevin Johnson said was unacceptable. Johnson wants Starbucks to do a better job of anticipating the ever-changing needs and preferences of its customers. The company is focusing on healthier options and promoting its app to boost sales.

5. Applebee’s

Owner Dine Brands admits this neighborhood bar and grill is a little behind the times. So, the company has been doing a lot of pruning. In 2018, the number of Applebee’s locations dropped by 90 (from 1,936 to 1,846), and the plan was to close another 20 in both 2019 and 2020.

The idea is not to kill off Applebee’s entirely but fine-tune it. There will be a greater focus on off-premises catering, takeout and delivery services. The leadership also is tinkering with healthier menu items and more ethnic food choices.

6. TGI Fridays

Older sit-down restaurant chains like TGI Fridays are being squeezed by America’s generational and economic divides. TGI Fridays has been retooling its menu and trying to return to its singles-bar roots, but those efforts didn’t help much last year. Sales plunged, so the company is scaling back.

In 2019, 34 company-owned and franchise restaurants had their very last “last call,” and at least another four have either closed or will be shutting down in 2020, including the only Fridays in Rhode Island.

7. Perkins

Customers raved about their buttermilk pancakes, and within a few short years, they were franchising their concept. But by the 2010s, Perkins faced a tall stack of financial trouble. It filed for bankruptcy in 2011 and again in 2019.

The chain has weathered several rounds of closures, the most recent of which took place in January 2020 in Waterloo, Iowa and Johnson City, Tennessee. Perkins’ website says there are currently 317 locations in 32 states and Canada, which suggests more than 30 have closed since the start of 2019.

8. Boston Market

Last year, Boston Market closed about ten percent of its more than 450 rotisserie chicken restaurants — including the last two in Boston, the city that gave the chain its name. Five more have closed in 2020, from Kansas to New Jersey.

Boston Market has been through tough times before. In 1998, it filed for bankruptcy, and two years later the company got taken over by McDonald’s. The fast-food giant flew the coop when it sold the chicken chain in 2007.