McDonald's and Burger King rival Wendy's closes 100s of restaurants

Rising prices, falling incomes, and economic uncertainties force consumers to make choices.

For wealthier consumers, that might mean downgrading, or even skipping, a vacation, holding onto a car for a little longer, or not making high-end discretionary purchases. Consumers in lower-income groups might have to make some more immediate sacrifices.

"Less affluent consumers are most vulnerable to the impact of inflation, and one of the first areas where they'll cut back is dining out," EMarketer analyst Sky Canaves told Reuters, as FoxBusiness reported.

That has hit the fast-food industry hard, with McDonald's CEO Chris Kempczinski addressing the slowdown a year ago.

"On our last call, we shared that the QSR sector had meaningfully slowed in many of our markets, with industry traffic declining in several major markets, and that consumers, especially those in the low-income category, were choosing to eat at home more often. This trend continued in the third quarter," he said during the chain's third-quarter earnings call.

The Big Mac giant responded by leaning into value, which delivered positive growth in 2025 after some down quarters in 2024.

"McDonald's delivered system-wide sales of nearly $140 billion, up 5.5% in constant currency for the full year. This reflects solid comp sales growth of more than 3% for the full year and over 5.5% in the fourth quarter with strong growth across all segments," Kempczinski said during the chain's fourth-quarter 2025 earnings call.

But the impact has not been evenly distributed. Weakening lower-income traffic is filtering through the most vulnerable franchise systems, forcing some chains, including Wendy's, to shrink their footprint instead of relying solely on pricing or promotions.

Wendy's is shuttering hundreds of U.S. restaurants

As part of its Project Fresh revitalization plan, Wendy's is taking a close look at its operations.

"The third pillar of Project Fresh is system optimization, which is about having the right restaurant footprint in each market to maximize profitability for our franchisees and deliver exceptional food and experiences for our customers," Interim Wendy's CEO Ken Cook said during the chain's third-quarter earnings call.

Cook made it clear that closing locations was not the first choice for the chain.

"We are working with our U.S. franchisees to evaluate each and every underperforming restaurant in our system from both a financial and a customer experience perspective, and developing action plans for how to improve both," he said.

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The CEO noted that some locations can be fixed by operational changes like aligning operating hours to better match demand, particularly in the morning and late-night dayparts.

"In other cases, the solution will be to close consistently underperforming restaurants," he added.

The goal, he said, was to "return U.S. comp sales to growth."

Wendy's starts closing locations

Wendy's has begun closing locations.

Multiple states have seen net store declines in the double digits, according to a review of Wendy's store locator tool.

As of May 1, the tool showed 5,675 locations in the United States.

"That's roughly 200 fewer locations than what it showed at the end of September 2025, an archived capture of the tool reveals," according to Fast Company.

Wendy's does not share what stores it plans to close.

As of the beginning of May, the following states have seen the biggest net declines in restaurants since the fourth quarter of last year.

• Florida: 475 locations (net loss of 24)
• Texas: 431 locations (net loss of 23)
• Illinois: 175 locations (net loss of 18)
• Arizona: 90 locations (net loss of 15)
• Colorado: 115 locations (net loss of 10)
• Ohio: 388 locations (net loss of 10)
• New Mexico: 33 locations (net loss of 8)
  
  Source: Fast Company

Wendy's plans to close around 300 stores as part of Project Fresh.

Cook commented on the challenges Wendy's faces in a media event discussing Project Fresh.

"Global system-wide sales declined 8.3%, driven by our U.S. business, where marketing spend was down significantly," he said.

Project Fresh's restaurant optimization includes closing 5% to 6% of U.S. locations, with 28 closures in Q4 2025 and the remainder expected in H1 2026, according to the company.

Wendy's joins Burger King in turnaround efforts

Wendy's rival Burger King began a simlar turnaround plan, "Reclaim the Flame," in Sept. 2022.

"The plan includes Burger King investing $400 milllion over the next two years, comprised of $150M in advertising and digital investments to 'Fuel the Flame' and $250 million for a 'Royal Reset' involving restaurant technology, kitchen equipment, building enhancements, and high-quality remodels and relocations," the company shared in a press release.

BTIG analyst Peter Saleh believes in Wendy's product, but believes the chain's messaging and restaurant presentation could be improved.

"We continue to believe that Wendy's has a superior product offering to most quick-service hamburger competitors, but think recent promotions haven't always reinforced this, and see a longer-term need for franchise investment to fully modernize the restaurant portfolio," he told Street Insider.

JPMorgan downgraded Wendy's stock to neutral in late 2025, according to Investing.com.

"The downgrade highlights investors' concerns that Wendy's must lift average unit volumes to keep franchisees profitable and reignite U.S. expansion," noted Simply Wall St.

Related: McDonald's rival closes 729 more restaurants

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This story was originally published May 6, 2026 at 5:03 PM.