Popular breakfast diner chain closes over 150 locations

Breakfast dining chain Denny's continues to reduce its restaurant footprint as some of its underperforming franchisees close locations amid weaker customer traffic and higher operating costs.

Fewer customer visits and lower sales can lead to underperforming restaurants, which was the case with iconic breakfast diner chain Denny's, which closed another troubled location at the corner of Rosecrans and Jarvis Street in the Point Loma area of San Diego, according to KFMB-TV.

The closing follows at least three other shutdowns and a franchisee bankruptcy filing this year, after the chain closed 150 Denny's locations in 2025.

Denny's closes San Diego location

Diners trying to enter the Point Loma Denny's on June 22 were met by a big red professionally made sign that seemed to have been produced days ahead of time for the closing that read: "Thank you, Rosecrans. We're moving down the street!" according to KFMB.

The sign proclaimed: "The Legacy Breakfast. Enjoy breakfast on us. Saturday, June 20. Come in for a flyer."

Another hand-written sign in ink outside the front door read, "Closed. Visit Denny's at 3920 West Point Loma Blvd."

Restaurant property advertised for-lease

The 1601 Rosecrans Denny's location was advertised for-lease by Strategic Real Estate Inc. in early June while the restaurant was still operating, according to SanDiegoVille.

The Point Loma Denny's opened in 1966 at a time when the area was rapidly growing, along with nearby military installations, the fishing fleet, and expanding tourism. The location was a favorite of Navy personnel, San Diego International Airport travelers, late-night diners, college students, and families seeking breakfast all day long, SanDiegoVille reported.

Denny's traces its roots to the founding of Danny's Donuts in Lakewood, Calif., in 1953, which later became Danny's Coffee Shop and finally Denny's in 1959.

Chain sold to private equity

Denny's Corporation sold the company to a group led by private equity firm TriArtisan Capital Advisors LLC, alternative asset investor Treville Capital Group, and one of Denny's largest franchisees, Yadav Enterprises Inc., for about $620 million in an all-cash transaction, that closed on Jan. 16, 2026.

The company became a privately-held corporation at the close of the sale. It operated 1,459 global restaurants, consisting of 1,397 franchised and licensed restaurants and 62 company-operated locations, according to the company's last quarterly report ending Sept. 24, 2025.

The San Diego restaurant is not the only Denny's location to close this year. The restaurant chain closed locations in Grand Rapids, Mich., and in Kalamazoo, Mich., in February 2026, WOOD-TV 8 reported.

Franchisee owner of the locations, Denn-Ohio, which owned 10 Denny's units, filed for Chapter 11 bankruptcy in 2023.

Also, a Denny's franchise in Midland, Texas, closed its restaurant in early January 2026, according to Mashed.

Franchisee filed for bankruptcy

Denny's restaurant franchisee DBJ US Corp. filed for Chapter 11 bankruptcy protection on Jan. 27 to restructure its financial obligations.

The Miami Beach, Fla.-based operator of seven Denny's restaurants in South Florida filed its petition on Jan. 27 in the U.S. Bankruptcy Court for the Southern District of Florida but did not indicate a specific reason for filing its case and did not say whether it would close any locations.

Among the causes for underperforming restaurants has been a decrease in diner visits, as 45% of restaurant owners claim customer traffic declined between May 2025 and May 2026, while only 29% claimed traffic rose in that period, according to the National Restaurant Association's Industry Tracking survey released on June 29.

It was the 15th time in the last 16 months that restaurant owners reported a net decline in customer traffic.

The declining traffic observed by the National Restaurant Association over the last year also affects same-store sales, as 33% of restaurant owners reported a decline in same-store sales it the same period, according to the survey. About 50% of restaurant owners, however, reported an increase in same-store sales in the same period, which was slightly higher than the 48% reporting an increase in the period ending April 2026.

The remaining 27% of restaurant owners reported no change in the period ending in May.

Labor costs have become prohibitive for running a 24-hour diner operation, such as Denny's, according to TheStreet advisor and RTMNexus CEO Dominick Miserandino.

"You can't run 24-hour operations on 2026 labor costs when food prices are up 34%. The all-day breakfast used to be a superpower. Now, with 9% of full-service spots at risk of closing this year, it's a liability," Miserandino told TheStreet's Daniel Kline.

Denny's closings in 2026:

• Denny's, 1601 Rosecrans, San Diego, closed June 2026. Source: KFMB-TV.
• Denny's, 3127 Plainfield Ave. in Grand Rapids, Mich., closed February 2026. Source: WOOD-TV.
• Denny's, 3817 Cork St. in Kalamazoo, Mich., closed February 2026. Source: WOOD-TV.
• Denny's, 3701 W. Wall St., in Midland, Texas, closed January 2026. Source: Mashed.

Related: Popular fried chicken chain franchisee closes 39 locations

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This story was originally published July 3, 2026 at 12:47 PM.