Wendy’s to Close 300 Restaurants in 2026 as Turnaround Plan Accelerates

The primary purpose of Wendy’s Project Fresh turnaround plan is to prioritize growth of AUVs and profitability. One way to achieve that? Removing restaurants that aren’t beneficial to the system.

Starting later this year and into 2026, Wendy’s expects U.S. closures in the mid-single-digit percentage. Given the chain ended Q3 with 5,979 domestic stores, that means 200 to 300 units—or possibly higher—will shutter. The brand closed nearly 200 U.S. locations in 2024.

Interim CEO Ken Cook said shutting down these restaurants will give franchisees more opportunity to invest in the rest of their portfolio, like upgraded kitchen equipment, digital menu boards, or even opening new units. The closures should also result in sales transfer to nearby locations.

The announcement is a departure from earlier this year, when Wendy’s claimed it wanted to add 1,000 global net new restaurants through 2028, 300 of that coming in the U.S.

But not every underperforming restaurant will close. In some cases, these stores will be handed to a better-suited franchisee. Other times, the focus may be improvements in operations, technology, or productivity. Cook gave one example of an operator who was struggling at breakfast because his store was close to a mall that didn’t open until 10:30 a.m. In this scenario, the franchisee was able to opt out of breakfast and adjust his operating hours to open later.

“In terms of franchisee financial health, overall, the U.S. franchisee system remains healthy, although there are pockets of more acute financial pressure,” Cook said during Wendy’s Q3 earnings call. “We’re working with those franchisees on a case-by-case basis to figure out the best path forward.”

Project Fresh was first unveiled in October. In addition to optimizing the footprint, the framework also touches on brand revitalization, operational improvements, and capital reallocation.

To create more relevancy, Wendy’s partnered with a consultancy firm led by Greg Creed, the former CEO of Taco Bell and Yum! Brands. The two sides kicked things off with a consumer survey to gather feedback on what motivates guests’ purchasing decisions. The company will then use that information—along with some advanced data analytics—to re-imagine how it communicates value to customers.

Operationally, Wendy’s has implemented more hospitality training, leading to better scores around accuracy, friendliness, and employee turnover. Refining the off-premises business has been crucial too. Cook highlighted increases in digital-based conversions, satisfaction, and app store ratings, while also seeing declines in cancellation rates, missing items, and refunds. At the drive-thru, digital menu boards and automated voice ordering have proven fruitful in promoting upselling and productivity.

As for capital spending, Wendy’s will redirect funds from net unit growth into strategies that drive AUV, such as technology and marketing. In pursuit of this, the chain cut its build-to-suit development program by $20 million. The program minimizes financial barriers by providing franchisees support through startup phases, including site selection and construction.

“While these changes will take time to deliver their full impact, we believe that the actions we are taking today will build momentum and deliver sustainable long-term growth, creating value for all key stakeholders,” Cook said.

Amid this comeback strategy, U.S. same-store sales declined 4.7 percent in Q3, falling well short of QSR burger peers McDonald’s and Burger King. The negativity was fueled by a decline in traffic, partially offset by a higher average check.

Meanwhile, corporate store comps declined just 0.7 percent because of the aforementioned investments in operations and technology.

“We’ve outperformed the franchise system for the last couple of quarters,” Cook said. “Obviously, that differential has been growing, which has significantly increased interest from franchisees. So now this becomes a pull, not a push. They’re interested. We’re going to be rolling that out, and we think that will help in a big way in 2026.”

In the near term, Wendy’s is hoping to reignite sales by simplifying its marketing calendar. In Q3, the brand focused on a meal inspired by Netflix TV show “Wednesday,” along with new drinks and a value offer featuring two Jr. Bacon Cheeseburgers, fries, and a drink for $8.

The meal deal helped with bringing back some customers, but Cook said it didn’t do enough with attracting new guests.

“That tells me we have an opportunity to tell our value story in a different way by focusing on both price and the quality of the ingredients we get,” Cook said.

The chain then began Q4 with the release of chicken tenders and six sauces. Some restaurants sold out of the product, even before national advertising, which starts this week.

“Customer feedback has been very, very strong,” Cook said. “We’re pleased with the way that promotion is going. We think it will provide momentum as we move through the fourth quarter and into 2026.”

In Q3, Wendy’s U.S. business earned $3.004 billion in sales, down from $3.141 billion in Q3 2024. Digital sales rose 14.9 percent year-over-year, bringing mix to a record 20.3 percent.

Internationally, comps lifted 3 percent. During the third quarter, Wendy’s opened its first store in Ireland and opened its second unit in Australia, which experienced the highest opening day sales in company history. Also, the Canadian market—having gained traffic share in the QSR burger category for 17 consecutive quarters—is on pace to open its highest number of openings in the past decade. The future pipeline remains strong, with Wendy’s signing deals for over 320 locations year-to-date, including a recent agreement to build 50 new restaurants in Central Mexico.