Business Strategy

Wendys is closing 140 restaurants in the coming months, the fast food chain announced this week. But the company said it would open an equal number of new locations in areas it believes can generate better business for Wendys.Related video above: Rossen Reports: Save money on fast food with these app tricksThe restaurants targeted to close are outdated and located in underperforming areas, Wendys CEO Kirk Tanner said on an earnings call Thursday, adding that their financial performance is well below the system average.The company didnt provide a list of locations slated to close. Tanner said that its not one particular area.Wendys conducted a robust review of individual restaurants to ensure they meet our expectations for sales, have the profitability to fuel growth, and deliver the Wendys brand experience for customers, he said. Overall, Wendys system is incredibly healthy.This round of closures is in addition to 100 closings that Wendys announced in May.Despite the rounds of closures, the overall number of Wendys, which stands at about 6,000 in the U.S., isnt shrinking. The chain is building about 250 to 300 new locations, which are based on the technologically enhanced design revealed in 2022 that have new pick-up windows, updated kitchen appliances and a spruced up interior.Other chains recently announced closures of underperforming locations, including Dennys and Shake Shack.Wendys earnings were mixed, with same-store sales coming in below analysts expectations at 0.2%.The company remained upbeat about this quarters performance because its SpongeBob SquarePants-themed meal is resonating with consumers, generating a powerful response that is driving significant sales growth, Tanner said.