More Than 7,500 U.S. Restaurant Locations Closed in First Half of 2026 as Costs Rise and Sales Fall

More than 7,500 restaurant locations closed across the United States in the first six months of 2026. Rising costs and declining sales are forcing owners to make hard calls, CBS News correspondent Mark Strassmann reported.

That is the national number. The individual stories behind it are messier.

Wendy's: 240-plus stores gone and a franchisee in bankruptcy

Wendy's disclosed during its second-quarter earnings call that it closed more than 240 U.S. restaurants in the first half of the year. That left the chain with approximately 5,700 U.S. locations. (Mashed puts the first-half figure higher, at 289 closures, so the exact count varies by source.)

Same-store sales fell 7%. Customer traffic dropped 12.5%. It was the sixth consecutive quarter of declining same-store sales, and food and labor costs squeezed margins further.

John Gordon, principal at Pacific Management Consulting Group, told Inc. that Wendy's sales have been among the weakest in the industry. Gordon tracks weekly sales at about 60 restaurant brands using credit card data. He said Wendy's has ranked in the bottom five for at least a year.

The stock reflects it. Shares traded at $6.31 on Oct. 12, down 65.6% over three years. The company carries a $4.8 billion enterprise value, which highlights its debt burden.

Then there is Meritage Hospitality Group, one of Wendy's largest operators. Meritage filed for Chapter 11 bankruptcy in September and plans to close underperforming restaurants. Wendy's claims Meritage owes more than $146 million in unpaid royalties and fees, and says it terminated the franchise agreements before the bankruptcy filing. Meritage has challenged those terminations.

New CEO Bob Wright is focused on profitability. The company is expected to outline its recovery strategy on its Nov. 5 earnings call. Further closures are possible.

Sit-down chains went dark too

O'Charley's started as a Nashville restaurant in the early 1970s and grew to more than 250 locations. About 50 closed in 2023. The remaining 49 shut permanently in 2026, many with little warning. In Tennessee, employees were told the night before that their restaurants would close at 8 p.m. the next day.

The company declined to respond to media requests. Its social media accounts have been shut down. Its website now carries a thank-you message and contact information for creditors to file claims.

True Food Kitchen, the health-focused chain with Oprah Winfrey as an investor, filed for Chapter 11 and closed 12 of its 46 locations. The costs of its fresh-ingredient, grass-fed menu, along with several operational issues, were part of the strain, according to Mashed's rundown of 2026 closures.

The same rundown lists other pressures behind the shutdowns: inflation, a weakening employment market, over-expansion into saturated markets, and high interest rates that make financing harder for corporations and franchisees alike.

Customers are still eating out. They are just paying less to do it.

In California, diners are not disappearing. They are trading down.

Chef Alex Carballo of Grand Restaurant Group told Fox News Digital that happy hour once accounted for an estimated 5% to 8% of his business. It is now nearly 30%.

His regulars are also coming less often. Customers who visited four or five times a week now come three. Those who came three times a week now come once.

What was once a stop for drinks or appetizers before dinner is increasingly becoming the dinner itself, Carballo said.

The math is brutal for operators. "I'm still paying the same amount for food. I'm still paying the employees. My rent didn't change. Nothing changed. Only thing I'm doing is trying to discount my product to gain people to come here," Carballo said.

California has the highest overall price levels in the country, roughly 11% above the national average, according to 2024 data from the U.S. Bureau of Economic Analysis. Residents told Fox News Digital that housing, groceries and gas are all squeezing their budgets.

What the numbers say

A restaurant needs customers who spend enough to cover food, wages, rent and debt. When traffic falls and costs do not, the margin disappears. That is the pattern in the Wendy's figures and in Carballo's account of discounting to stay full.

The next hard data point is Nov. 5, when Wendy's is expected to explain how it plans to stabilize sales. The outcome of the dispute with Meritage, which is in Chapter 11, will shape how many more of that franchisee's restaurants close. By Oct. 16, Meritage had already closed 33 restaurants since filing, and court documents indicated additional closures could follow through November.