13 Signs Denny's Is Struggling To Stay In Business

Few restaurant chains feel as part of the fabric of the United States as Denny's. The quintessential 24/7 restaurant known as "America's Diner" started as a single location back in 1953. Over the latter half of the 20th century, it grew to enormous proportions. As of this writing, over 1,300 locations are in operation. With such a large footprint, it seems wild to think that this well-worn restaurant franchise could be struggling. However, if you take a look behind the massive number of branches, you see a picture of a business that seems to be in freefall, struggling to keep up with an ever-changing culinary landscape and a world of new consumer tastes.

The appeal of Denny's lies in its traditional, all-American cuisine — but that's also part of the problem. Many of the things you can order at Denny's are pretty unhealthy, which doesn't quite fit in with the current desires of most diners. Plus, these meals make it easier to disguise sub-par ingredients — the use of which is a telltale sign that a business is struggling. When you couple those factors with declining restaurant numbers, staff layoffs, rising prices, and continual attempts at rebranding, it's pretty clear that Denny's is at risk of disappearing entirely before we know it.

While a significant number of Denny's restaurants still operate in the United States, the chain revealed wide-scale closures in 2024. Denny's first announced 150 closures in late 2024, stating that 50 restaurants were to shut their doors by the end of that year and another 100 would follow suit in 2025. 

Then, a few months into 2025, the diner chain announced it was closing dozens more locations. In an earnings call with its investors, it increased the target for its 2025 closures to cover approximately 30 more restaurants. While the restaurant did mention on the call that it had opened four franchised restaurants throughout 2024, it was a drop in the ocean compared to the amount it was closing. It's probably no surprise that all of these closure announcements have had a significant impact on the Denny's stock prices. By February 2025, stock was down approximately 50% compared to the previous year.

Like pretty much everyone and every business out there, Denny's has been significantly affected by various price increases throughout the last few years. However, its recent problems have been shown in the amount it's had to raise its own prices in response. In February 2025, the chain restaurant announced it was adding an egg surcharge to meals that include the ingredient. "This pricing decision is market-by-market, and restaurant-by-restaurant due to the regional impacts of the egg shortage," Denny's explained in a statement to CNN.

Now, we can kind of understand why Denny's did this. After all, it specializes in breakfast items — many of which contain eggs — and it's likely the case that it's been hit harder than some other restaurants as a result. Plus, Denny's isn't the only restaurant that's had to raise its prices because of the egg situation: Waffle House has done the same. It's worth pointing out, though, that there are plenty of restaurants that haven't added an egg surcharge, and are likely able to swallow the cost due to being in a healthier financial situation. Denny's doesn't seem to be as blessed and passing its cost onto the customer is a clear sign that it's in trouble.

Restaurant businesses are funny things, folks. On the surface, a restaurant can appear to be doing well, with a location on every street corner — but look at the bottom line and you'll get a different picture.

In an earnings call in February 2025, the Denny's Corporation revealed that its total operating revenue was down for 2024 by over $10 million compared to 2023. Its operating income was also lower, and its restaurant sales were also down in the fourth quarter of 2024 compared to the same quarter of the previous year.

In case you're wondering what any of this means, it's basically a sign that things aren't looking too good. This downturn in Denny's fortunes has also been reflected in its stock prices. Shortly after the call, Denny's stock plummeted 22% to almost its lowest price in a decade. In the earnings call itself, Denny's CEO Kelli Valade attempted to pin issues on "macroeconomic factors," and while that may certainly be true, it's also the case that this is a picture of a restaurant that's not operating at its best.

One of main signs that Denny's is struggling to stay in business is, quite simply, the larger presence of other restaurants. Although you might not think that one restaurant's success is another restaurant's failure, the growth of other, similar brands that offer something a little different is a clear sign that customers are turning elsewhere to get their morning meals. "Denny's continues to be a victim of increasing competition from breakfast/lunch concepts like First Watch and Snooze, and A.M. Eatery," FoodserviceResults CEO Darren Tristano told Costar News. "They are challenged by the efforts to maintain breakfast, lunch and dinner day parts."

Tristano also went on to point out that part of the issue is that its core customers are now more aware that they can get better grub elsewhere. "Although they continue to provide value pricing, their customer base, with a strong boomer generation, continues to age and look for better quality offerings," he stated. 

Perhaps they're flooding to First Watch, which saw a nearly 14% increase in its total revenue in 2024 compared to 2023. Denny's revenue, on the other hand, dropped during those same 12 months.

A business that's working is a business that's sticking to what it does best. Just look at McDonald's: This restaurant chain knows what it offers and it doesn't deviate from that. Now take a look at Denny's. In recent years, its customers have faced an almost relentless onslaught of rebranding efforts, thanks to Denny's attempts to breathe new life into the franchise and keep up with the times.

In 2017, it activated a new online ordering platform, basically negating the specific charm of Denny's (which is to dine in during the dead of night). It then followed this with the launch of a new "concept," The Den By Denny's, aimed at college campuses, and creating two new virtual brands, The Meltdown and The Burger Den, which people could order via DoorDash.

Denny's also tried to rejig its restaurant's designs coming out of the pandemic, with a so-called Heritage 2.0 design that would give the brand a bit of a refresh. This followed an earlier redesign of its restaurants back in 2014, which yielded a small boost in sales. Now, innovation and redesigning when it comes to restaurants isn't exactly unique to Denny's, but what's notable here is how many times it's attempted this over just a handful of years. This could reflect a lack of confidence in its core offerings, which may now feel outdated.

You know that a business is in trouble when it starts to let its staff members go. Unfortunately, in 2025, Denny's announced that it was doing just that. In its Q4 2024 Earnings Call, Denny's executive vice president and CFO Robert Verostek said that the company was taking part in ongoing "headcount reductions," which is corporate speak for layoffs.

Verostek stated that administrative expenses at the company have seen a "reduction of approximately 3.5% to 4% moving towards our long-term goal of 5% to 6%," according to a transcript of the sales call (via Seeking Alpha). "This reduction is attributable to recent headcount reductions and the consolidation of our support centers." Essentially, Denny's has been paring down its employees in a bid to save money, and it's likely going to be doing even more of that in the future. If the current trend of Denny's closing its restaurants to keep afloat continues, you can bet that even more employees will be losing their jobs. Plus, if it carries on "consolidating" its support centers, that may make its operations more simple and streamlined, but streamlined generally means fewer people. If Denny's were in a better financial state, layoffs would be unexpected.

The problem with Denny's is that it's a bit of a relic. Sure, there's obviously a market for pancakes, hash browns, burgers, and fries, but generally speaking the restaurant is flailing in a sea of healthier choices that better reflect modern tastes. "In addition to full-service competition, fast-casual restaurants like Panera offer healthy options and drive-through convenience," FoodserviceResults CEO Darren Tristano told Costar News. More and more, people are opting for lighter breakfast and lunch options that will keep them satisfied without making them feel sluggish or otherwise choosing healthy options at fast food restaurants that have adapted to offer more nutritious menu items.

Denny's, on the other hand, really hasn't changed its menu to become healthier. Instead, its famous Super Slam and other signature breakfasts, along with its starters and burgers are all predominantly fried and dripping in grease or syrup. While Denny's does offer salads, the majority of them come with a generous handful of cheese or are adorned with pieces of fried chicken. It's not moving with the times, and people are looking elsewhere.

Few things are more cringeworthy than when someone starts trying to keep up with the kids. Oh, wait, no, we know what's more cringeworthy than that: When a business that doesn't understand its core audience tries to do so. Unfortunately, Denny's is a prime example of this, as a restaurant chain that's trying to incorporate new technology as a way to appeal to a younger audience, but in doing so it makes itself seem out of touch and prone to gimmicks.

A good example of this was when Denny's unveiled its new augmented reality menu experience. Back in 2023 the restaurant decided that it was a good idea to implement an AR menu that jumped out of your phone at you, rolling it out at the same time as some pretty wacky, lurid menu items like Strawberry Pancake Puppies. It's not the only restaurant that's used AR technology, but it stands out as an example of one doing so to stay relevant.

More recently, Denny's unveiled its utterly bizarre NVIDIA Breakfast Bytes, a dish that was designed to honor NVIDIA CEO (and former Denny's server) Jensen Huang. We like the sentiment of the restaurant doing this, but it feels like its jumping on the AI trend in a way that feels a little clunky.

Look, Denny's has never exactly been known for its high-quality cuisine. However, in recent years, people's enjoyment of its food has taken a serious downturn, and it's pretty clear that its quality is suffering. Customers have reported their recent experiences of dining at Denny's on Reddit, with one talking about their experience of ordering a Grand Slam, noting that the gravy was terrible and the meal was soaked in grease. They went on to point out that the store was "absolutely filthy, the other side of the booth I was sitting in, all the woodwork and walls needed a good scrub down."

Other customers have been particularly scathing about the quality of steaks from Denny's, noticing their lack of sear and terrible flavor. Unfortunately, all of this paints a picture of a restaurant that's struggling and perhaps caring less and less about the taste of its food and the restaurant environment. This could be because it's having to cut corners, or it could just be because it's given up the ghost.

The commitment Denny's makes to staying open 24/7 has been an integral part of its brand identity. However, in recent years, that commitment has been scaled back pretty considerably. Denny's branches pulled back from 24/7 service during the height of the COVID-19 pandemic in 2020. In the following years, it attempted to re-establish full-time opening hours in its restaurants. By 2023, about three-quarters of its restaurants had returned to 24/7 hours, with Denny's CEO Robert Verostek stating that the chain was attempting to establish 90% of its branches as being open around the clock.

By the end of 2024, though, it seemed like the brand had made little progress on this front. A quarter of its restaurants still weren't operating 24/7 hours and Denny's was no longer aiming for those branches to do so in future. This might seem like flexibility on Denny's part, but what it really looks like is a cost-saving measure to save a flailing business.

When a restaurant starts limiting its options, it's likely signaling trouble. In early 2024, the chain took the step of cutting some of its customization and build-your-own options from its menu, in a bid to simplify its offerings, speed up operations, and increase its profits. While off-menu customizations are still available upon request, Denny's intentionally deprioritized them.

"This new menu also led to margin improvements, given our strategic approach to highlighting our most profitable items and ones we know to be guest favorites," CEO Kelli Valade explained to investors (via Business Insider). Now, this may be a worthwhile endeavor for Denny's, but you have to ask: Would they feel the need to do this if business was booming? Probably not. Customization at quick-service restaurants is well-documented as hugely appealing to customers as it gives them the opportunity to do their own thing and curate their experience. If a restaurant is actively taking that away, well, it's probably having to do a lot of thinking about its bottom line.

You know things are bad when restaurant chains are trying to bring back former talent to steady the ship. That's exactly what's been happening at Denny's. Toward the end of 2024, Denny's announced that its former chief operating officer Chris Bode was to be rejoining the company, replacing former COO Alex Williams, and taking on an increased share of responsibilities.

However, Williams had only been in the role since May 2023, and it's hard to ignore how quickly he left the company — especially given that Bode had been at Denny's before him for over a decade. It's difficult to ignore the implication of this all, which is that Bode was being brought back to restore the company to its former success after a rocky few years. Furthermore, Denny's brought on several new executive team members in 2024, with Monigo G. Saygbay-Hallie joining as executive vice president and chief people officer, and Patty Trevino becoming Denny's senior vice president and chief brand officer. Is this a perfectly normal changing of the guard, or a sign that Denny's needed to sink or swim?

Denny's has faced a huge amount of pressure in recent years over its sourcing of meat from unethical sources, and the fact that it appears to be making pretty slow progress may indicate that it's putting cost over responsibility. Its sourcing of pork products from suppliers that use gestation crates, in which pigs are kept confined while pregnant, has been a longstanding controversy. In 2012, the restaurant announced that it would aim to stop buying products from companies that do this and encourage its current suppliers to end the practice. So far, so good, right? Except cut to over a decade later and nothing seems to have changed.

While other competitors like IHOP and Cracker Barrel have worked to lay out steps as to how they plan to stop using products from unethical companies, Denny's has dragged its feet. This left shareholders feeling frustrated enough in 2024 to pressure leadership into setting out realistic targets for ethical and sustainable sourcing. Denny's has now set a target of the end of 2030 to stop the practice. Still, the fact that it made no progress since its first commitment may give many pause, and it causes us to question whether these ethical moves have always been a bit too expensive for Denny's to fulfill. Now that it's made this promise, it'll likely have to shell out even more cash that it may not even have.