Despite company-wide updates,
This article is free of bias, and is based on national statistics and accredited media reports. All listed facts within this article are fully-attributed to economic and media outlets, including QSRweb.com, KFC.com, National Restaurant News, SFGate.com, Fast Food Maven, RestaurantClicks.com, and The Hamtramck Review.
In the event of the three fast food chains as pictured above — KFC, Taco Bell, and Wendy’s — each has been scheduled for closings in the current calendar year.
However, while some of those planned closings have resulted from underperformance, others are reflective of certain strategic decisions and not of business failures.
Let us explore.
Brand Closings, 2022: KFC, Taco Bell, and Wendy’s
As the surviving restaurant industry recovers from the calamities of the Covid-19 pandemic, or otherwise strives to return to a level of pre-pandemic normalcy, business decisions have been made to ensure those goals.
KFC: According to a March, 2020 article in QSRweb.com, Yum Brands, Inc. — the owner of KFC as well as Taco Bell, Pizza Hut, The Habit Burger Grill and WingStreet — planned to close at least 900 U.K. KFC restaurants due to Covid-19 concerns. See here for “Yum Brands Closing 7000 Stores Globally Due to Covid-19.”
From the article, regarding an SEC filing on the matter: “As we have taken steps in response to the pandemic, our primary focus continues to be the safety of everyone who engages with our brands, including our employees, franchisees and their team members, and customers. … Because this situation is ongoing and because the duration and severity are unclear it is difficult to forecast any impacts on the company's future results," the Courier-Journal reported the filing as stating.
Though Covid-related KFC closures in the U.S. did occur, they were primarily temporary.
In 2020, according to KFC’s website, 4062 KFC restaurants operated in the U.S. in 2020, while 3980 are presently in business nationally. There has been no announcement by either Yum Brands or KFC corporate about further closings for 2022. There is, however, news of the first widespread KFC expansion in several years.
See here for National Restaurant News article, “Here’s How KFC is Planning an Urban Takeover,” which states: Although the drive-thru suburban restaurant is the bread and butter of KFC’s store portfolio, the Yum brand has big plans to increase its urban presence, starting in select markets. Starting in 2022, KFC is prioritizing an aggressive expansion strategy, particularly in cities like St. Louis, New York (Chinatown, Queens, and Harlem), and Baldwin Park, Calif.
KFC appears to be in good shape for the current calendar year.
Taco Bell: According to a September, 2021 article in SFGate.com entitled “One of the Oldest Taco Bell Locations in California is Closing,” a simple lease issue prevented the landmark from continuing.
From the article: The Laguna Beach restaurant at 669 South Coast Highway first opened in 1967 and is one of the last remaining locations built with the fast food chain's original design: stucco arches and a tile roof, designed to look like a Spanish Mission house. According to Fast Food Maven, the location's original lease — which was signed back in 1966 with Taco Bell founder Glen Bell — finally expired, and the landlord declined to renew.
As would be expected, social media picked up on the matter, which caused rumors to spread about the chain’s impending closure.
A February, 2022 article from RestaurantClicks.com, entitled “The Truth Behind Rumors of Taco Bell Closing,” addresses the issue: It all started at the end of 2020. A media outlet called Money Pop claimed that Taco Bell was wrapping up business for good and closing its doors. As with any internet rumor, the suggestion turned to panic quickly. Taco Bell goers went to the Google search bar in hopes of finding reassurance that their favorite menu items aren’t gone forever. In the end, the rumor was simply that—a rumor. It began due to confusion over an advertisement Money Pop was promoting on its social media pages. When readers clicked on it, they found out that Taco Bell was not in fact closing, but simply that the fast-food restaurant was losing profits, yet at a fast rate.
However, from the start of the rumor, the article goes on to state the chain increased profits by 3% in the following quarter. According to other outlets such as the aforementioned National Restaurant News, though Yum Brands also strategically closed some locations during Covid, this chain is also reported to be in solid financial shape for the current calendar year.
Yet other online rumors proclaimed the demise of this perennial chain. In fact, Wendy’s is coming off one of its most profitable years.
See here for March, 2022 QSRMagazine.com article, “Wendy’s ‘Breakthrough Years’ Sets the Stage.” The article states: Breakfast, digital, and the company’s highest net new growth in two decades, carried Wendy’s to what CEO Todd Penegor called a “breakthrough year” in 2021. So how will the encore unfold? Penegor doesn’t see much of a slowdown on the horizon. Wendy’s delivered 121 net new restaurants last year, which marked six consecutive calendars of positive gains and, as noted, the highest figure in nearly 20 years. But a detail that speaks to the future, and how COVID shaped it, is the fact roughly 50 percent of growth is coming via nontraditional means. In one example, Wendy’s opened 30 REEF Kitchens across the U.S., Canada, and U.K. in 2021. These delivery venues boast average-unit volumes in the $500,000 to $1 million range, with Wendy’s collecting about a 6 percent royalty rate income compared to its typical collection of 4 percent (the higher number results in similar economics for Wendy's, despite the lower AUV).
However, akin to the high-profile California Taco Bell closing as referenced above, Wendy’s too has lost a venerable location. See here for a March, 2022 piece from The Hamtramck Review, titled “After a 29-Year Run, Wendy’s Serves Up Its Last Meal.”
Excerpted from the article: The company-owned outlet closed on Sunday, said Kitty Munger, Director of Communications for the company. “The restaurant had seen declining sales for the past few years,” Munger said in an email to The Review. “The cost would be too high to remodel. The crew and managers were placed in nearby restaurants.” Munger said the site will be put up for sale… According to a report by the Columbus Dispatch newspaper, the Ohio-based company is closing about 130 of its restaurants that aren’t performing well. The company plans a major redo of its restaurants, much like Taco Bell has been doing in recent months.
It should be noted there is a difference between redoing or restructuring, vs. going out of business.
Individual restaurant closings aside, all three of the above chains appear to be in a good place for 2022. Should anything change, this article will be updated.
Thank you for reading.