Hooters and Denny’s Announce Mass Closures Amid Declining Foot Traffic and Mounting Debt

A Double Blow to the Casual Dining Sector

For decades, Hooters and Denny’s have been staples in the American restaurant scene—Hooters, known for its sports-bar atmosphere and signature wings, and Denny’s, a 24-hour diner chain catering to late-night crowds and families alike. However, changing market dynamics have put both brands under pressure.

According to industry analysts, casual dining chains have struggled with rising labor costs, higher rent prices, and increasing food expenses, all of which have squeezed profit margins. Simultaneously, consumer preferences have shifted toward fast-casual and delivery-friendly dining options, leaving traditional sit-down restaurants with declining customer traffic.

With Hooters closing approximately 150 locations and Denny’s shutting down nearly 140, the mass closures represent one of the largest recent retrenchments in the restaurant sector.

What Led to the Closures?

The decision to shutter locations stems from multiple financial and operational struggles.

1. Declining Foot Traffic: Both brands have suffered from reduced in-person dining, with Hooters in particular struggling to attract younger customers. The chain, once a staple of sports fans and casual diners, has faced criticism over its branding, leading some to question whether its image is outdated in today’s evolving restaurant market.

2. Post-Pandemic Economic Realities: While many restaurants saw a post-pandemic boom in 2022 and 2023, that momentum has faded due to rising inflation, increased rent costs, and a tighter labor market. Denny’s, which thrived for years on affordability and late-night service, has struggled as operating costs have surged, making it harder to maintain 24-hour operations.

3. Debt and Financial Pressures: Both chains are burdened with substantial debt. Denny’s, which operates many franchise-owned locations, has faced financial strain among its franchisees, making it difficult to sustain underperforming locations. Meanwhile, Hooters has had difficulty competing with sports-bar alternatives like Buffalo Wild Wings and newer, trendier sports lounges.

Industry Experts Weigh In

Restaurant analysts see these closures as part of a broader shakeup in the casual dining industry, with major chains either adapting to new dining trends or facing contraction.

“Consumers are looking for more convenience, better value, and healthier dining options,” said restaurant industry expert Mark Callahan. “The old model of sit-down casual dining is under serious pressure, especially as younger generations opt for delivery, takeout, or fast-casual brands that provide quality food with quicker service.”

What’s Next for Hooters and Denny’s?

Despite the closures, both brands plan to continue operating with a streamlined footprint.

• Hooters has announced plans to expand its focus on international markets, where the brand has seen continued success. Additionally, some locations are experimenting with modernized menus and a digital-first approach, including app-based ordering and expanded takeout services.

• Denny’s aims to revamp its remaining locations to focus on breakfast and family-friendly dining while trimming operational hours in some markets to cut costs. The company is also exploring partnerships with third-party delivery services to enhance online orders.

The Future of Casual Dining

The closure of nearly 300 restaurants raises broader concerns about the future of sit-down chains in the United States. With a growing preference for quick-service and hybrid dining models, traditional restaurant brands will need to reinvent themselves or risk further contractions.

For now, loyal customers of Hooters and Denny’s will have fewer locations to visit—but whether these brands can successfully navigate a changing market remains to be seen.