Delicious burgers. Limitless steak fries. Scrumptious milkshakes. There is a lot to love at Red Robin. However, the 57-year-old restaurant chain could close up to 50 locations nationwide.
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What's Going on at Red Robin?
As reported by the New York Post, Red Robin recently introduced a turnaround strategy dubbed the "First Choice Plan." The goal is to cut its debt, trim costs, and sell more of its restaurants to franchisees.
Although the chain once believed that 70 locations could be shuttered as part of the plan, 20 struggling locations experienced a turnaround, sparing them from closure.
"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," said CEO Dave Pace during a recent earnings call.
He added, "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."
Even so, 50 restaurants could potentially close, though a spokesperson for the chain says the actual number could change.
"At this time, there is no confirmed number for potential closures, as the company is continuing to work on performance and could continue to see that number decrease," they said.
Some Locations Are Getting New Owners
While some Red Robin locations could close permanently, others are just getting new owners. The chain has agreed to sell nearly 100 of its company-owned restaurants to franchisees.
Over the last few months, the company agreed to sell 86 of its locations to operators Op Burgers and Kuber for a combined $72.5 million. It also sold 30 locations to Evergreen Dining. The $96 million from the three deals will go toward paying down debt and turning the company around.
"Strengthening our financial foundation remains a key priority," said Pace in a statement.
This news comes as other restaurant chains struggle to keep their locations open. For example, Smokey Bones closed six of its locations without notice back in April. Earlier this week, pizza chain Papa Murphy's announced plans to close 50 of its restaurants.
