New data has shown resilience in the global restaurant sector, especially fueled by strong growth in the QSR market, according to Black Box Intelligence.
Roughly 85 percent to 90 percent of the restaurant sector continues to show resilience, according to Black Box Intelligence, leaving only about 10 percent to 15 percent of operators facing serious risk. While closures may sound negative, they often create openings for other brands to grow.
A number of chains, such as First Watch and Dine Brands, are actively pursuing second-generation sites, existing restaurant spaces, to reduce both startup expenses and ongoing operating costs.
Quick-service and limited-service outlets generally face lower closure risk, but some major names, including Wendy’s, Papa John’s, Jack in the Box, and Pizza Hut, have still announced plans to shut down hundreds of underperforming locations. Importantly, these closures don’t always signal deeper systemic issues. For example, Noodles & Company has previously noted that closing weaker outlets can actually boost performance at nearby stores, as customers shift their visits rather than disappear entirely.
Black Box Intelligence supported this idea, emphasising that customer demand doesn’t simply evaporate; it tends to migrate to nearby operators that deliver consistent quality and value. In that sense, targeted closures can strengthen an overall brand network. By trimming weaker-performing units, companies can refocus their efforts and resources more effectively.
Victor Fernandez, vice president of insights and knowledge at Black Box Intelligence, highlighted this advantage, noting that a smaller, more efficient portfolio can ultimately outperform a larger, less focused one.
Redirecting investment, leadership attention, and marketing spend toward high-performing locations allows brands to maximise growth potential. This “traffic transfer” effect is expected to play a key role in helping businesses remain competitive in 2026.
Casual dining chains have also been adjusting their footprints. Brands like Red Robin and Denny’s have closed locations over the past year. Red Robin, for instance, announced plans in early 2025 to close up to 70 restaurants over five years, although that figure remains flexible. After improving performance at several previously underperforming sites, the company has already reconsidered some closures. Meanwhile, Red Lobster has indicated it may also reduce its footprint to manage costs more effectively.
Rising expenses remain a central challenge. With cumulative inflation pushing costs up by nearly one-third since 2019, maintaining profitability has become increasingly difficult, especially for locations experiencing significant sales declines. For full-service restaurants that have lost more than half their peak revenue, the outlook is particularly stark, with closures increasingly seen as inevitable rather than avoidable.
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