Struggling burger chain closing restaurants, won’t raise prices | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

The line between success and failure in fast-casual sit-down restaurants seems unbelievably narrow.

Chili’s, for example, has been flying high based on offering low prices and delivering good value. Applebee’s has struggled overall, but had success when country singer Walker Hayes name checked the brand in his song “Fancy Like.”

Many other chains in this space have struggled. Hooters remains under Chapter 11 bankruptcy protection while TGI Fridays and Red Lobster went through that process and came out the other side.

In some cases, like Hooters and TGI Fridays, you can blame the product. Hooters offers a dated business model that’s more than a little sexist. Fridays let its menu get stale and lost its feeling of being a step ahead of other players in the same space.

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Consumers have also gotten a little more careful with their cash. They might trade down from sit-down to fast casual or even opt for a fast-food meal deal.

It’s a tough market and surviving requires an aggressive plan of action.

Red Robin will close about 15 locations in 2025.

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Red Robin closing up to 70 locations

While no business wants to get smaller, it’s important to be decisive in cutting locations that don’t contribute to the bottom line. It’s more a situation of cutting out the cancer so the rest of the body can be healthy.

Along those lines. Red Robin will close up to 15 underperforming restaurants in 2025. The chain could close up to 70 locations over the next several years.

Red Robin has been closing stores on an efficient basis, largely waiting until their leases expire. That minimizes the financial hit the company takes when it shuts down a restaurant.

Closing unprofitable locations is only part of the chain’s turnaround plan. It’s also doing two big things improve its relationship with its customers.

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First, it’s making a key pricing promise.

“We’ve also included a cost headwind based on current tariff policies. I would note, we are not planning any menu price increases in the remainder of 2025. We anticipate absorbing the current expected impact of tariffs as we prioritize maintaining value for our guests. The great work of our operators to capture cost savings greater than we initially planned supports this approach,” CFO Todd Wilson said during Red Robin’s first-quarter earnings call.

Red Robin improves its loyalty program

Holding prices level, after they increased by about 6% in the previous year, should help Red Robin’s relationship with its customers. The chain has also made meaningful improvements to its loyalty program.

That has already produced some meaningful results.

“I would tell you that we are seeing the same kind of increase that we talked about last quarter. And I’ll also tell you that some of these numbers, like 22% of our visits are from lapsed users, that’s a really good number in terms of our visits overall. And we’re holding fairly close to new guests being 20% of our visits. So this program is really working,” Wilson said.

He also expects the momentum to continue.

“And I think as we dial this thing up further, there’s further opportunity here,” he added.

CEO David Pace agrees with his CFO.

“I think there’s still significant opportunity in the program, the strength of it to grow it and also to how we use it. I think there’s an opportunity for us to be smarter about how we implement and use pieces of the program. Not that we’ve been bad at it, I think we’re just learning and we’re getting better as we go. So I think there’s still significant upside there,” he shared.

The revamped loyalty program allows members to earn rewards faster in order to encourage more frequent visits. Membership crossed 15.3 million people at the end of the first quarter.