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Wendy's is preparing to close hundreds of its restaurants across the United States after revealing that a significant number of outlets have been 'consistently underperforming'.

The fast-food giant confirmed that between 200 and 350 of its 6,000 US locations will shut their doors from late 2025 as part of an aggressive turnaround plan.

The closures mark one of the most sweeping restructurings in Wendy's history, following years of lagging sales and growing competition from rivals such as McDonald's and Burger King.

Project Fresh: The Drive to Fix a Faltering System

The closure plan forms part of a new initiative known internally as Project Fresh, launched in October 2025 to revitalise the brand. The company said it will identify and either upgrade or close restaurants that are weighing down overall performance.

According to Wendy's third-quarter earnings call, the company intends to shut a 'mid-single-digit percentage' of its US restaurants as part of Project Fresh, targeting outlets that are 'a drag from a franchisee financial performance perspective' and 'do not elevate the brand'.

While some locations will close permanently, others may be remodelled or re-franchised to meet Wendy's updated design and technology standards.

The Real Reason Behind the Closures

Industry analysts say the decision stems from a pattern of outlets consistently failing to meet sales benchmarks.

As reported by CNN, Wendy's US same-store sales fell by about 4.7% in the third quarter of 2025, underlining the company's struggle to maintain momentum in a fiercely competitive fast-food market.

Wendy's reported total revenue of around $549.5 million (£417.5 million) for the quarter and a net income of $44.3 million (£33.6 million), signalling mounting pressure to improve profitability.

Many of the restaurants earmarked for closure are located in lower-traffic areas or older sites with limited drive-through capacity. These factors have been blamed for weakening performance compared with newer, tech-enabled branches that better support digital orders and third-party deliveries.

The latest move follows a smaller wave of closures in 2024, when roughly 140 restaurants were shut for similar reasons.

Impact on Franchisees and Employees

The closures are expected to affect hundreds of franchise owners within Wendy's network, many already grappling with shrinking profit margins as labour and food costs rise.

The company has yet to release a full list of affected locations or confirm how many workers will lose their jobs, but reports suggest closures will take place nationwide throughout 2025 and 2026.

Wendy's said some employees may be reassigned to nearby outlets, while others could face redundancy as part of the restructuring. Franchise groups have been asked to work closely with corporate management to identify sites that can be refurbished rather than shuttered.

Wendy's Faces Fierce Competition

The decision comes amid intensifying competition in the fast-food sector. Both McDonald's and Burger King reported positive same-store sales growth over the same period that Wendy's saw declines.

Analysts believe the chain has struggled to retain customer loyalty in an inflationary environment where diners increasingly prioritise value and convenience.

Rivals have rapidly expanded mobile ordering, loyalty schemes and delivery partnerships, areas where Wendy's has been slow to catch up.

The company says Project Fresh will prioritise these upgrades in remaining stores to better align with changing consumer habits.

A Strategic Reset for Survival

Wendy's leadership insists the closures are part of a long-term strategy to strengthen its remaining outlets rather than a retreat from the market.

The company's focus is now shifting towards boosting average unit volume instead of expanding store count.

Interim chief executive Ken Cook said: '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.'

He added that Project Fresh was aimed at system optimisation, brand revitalisation and capital reallocation to ensure Wendy's remains competitive in a rapidly evolving market.

Originally published on IBTimes UK