Cary, North Carolina — Red Robin’s nationwide restructuring effort continues to reshape the popular burger chain, with another restaurant now scheduled to close as the company works to improve its financial position and streamline operations.
The latest closure involves the company’s longtime restaurant in Cary, North Carolina, which is expected to shut its doors in the coming weeks after Red Robin agreed to sell the property for $3.3 million.
The closure is part of the company’s broader “First Choice Plan,” a strategy designed to reduce debt, improve restaurant performance and transition more company-owned locations to franchise ownership.
Red Robin Continues Reviewing Underperforming Restaurants
Earlier this year, Red Robin warned that as many as 70 restaurants could eventually close as part of its restructuring efforts.
However, company executives say operational improvements have helped several struggling restaurants avoid shutdown.
During the company’s fourth-quarter earnings call, CEO Dave Pace said approximately 20 locations previously considered for closure have improved enough to remain open.
“Going back a ways, we found we’ve made improvements on about 20 restaurants that we had previously identified as potential problems for us or potential closures,” Pace said.
“We’ve moved them off the closure list … and are hopeful that we can get them back to a performance level that equals the rest of the system.”
While the number of potential closures has decreased, company officials say no final total has been confirmed, and additional performance reviews are ongoing.
Franchise Sales Become Key Part of Turnaround Strategy
Not every restaurant affected by the restructuring is permanently closing.
Instead, Red Robin has increasingly chosen to sell company-owned restaurants to franchise operators, allowing the locations to continue operating under new ownership.
In recent months, the company reached agreements to sell 86 restaurants to franchise groups Op Burgers and Kuber for a combined $72.5 million.
Those deals followed an earlier agreement involving the sale of 30 additional restaurants to Evergreen Dining.
Together, the transactions are expected to generate approximately $96 million, funds the company says will primarily be used to pay down debt and strengthen its financial position.
“Strengthening our financial foundation remains a key priority,” Pace said. “Our partnerships with Op Burgers and Kuber introduce experienced operators into the Red Robin system.”
According to company officials, customers visiting franchised locations should notice little difference beyond changes in ownership.
Casual Dining Chains Continue Facing Financial Pressure
Red Robin’s restructuring reflects broader challenges facing the casual dining industry.
Restaurant chains across the country continue dealing with higher labor costs, inflation, increasing operating expenses and more cautious consumer spending, forcing many companies to reevaluate their footprints.
Several well-known restaurant brands have recently announced closures or restructuring efforts as they adapt to changing market conditions.
Although Red Robin no longer operates restaurants within New York City, the company continues serving customers at 14 locations across Long Island, the Hudson Valley and other upstate New York communities.
For now, company leaders say efforts to improve restaurant performance remain ongoing, leaving the final number of future closures uncertain.
Have you noticed changes at your local Red Robin? Do you think casual dining chains can recover from today’s economic challenges, or should they continue reducing their number of locations? Share your thoughts respectfully in the comments below.
