Denny’s rival closes dozens of restaurants, changes menu
Denny’s rival closes dozens of restaurants, changes menu
Daniel KlineSat, May 9, 2026 at 2:48 PM UTC
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When Americans look to save money, restaurant dining tends to be one of the first things to go. Compared to cutting a streaming service, downgrading your car, or even moving someplace cheaper, it's an easier sacrifice to replace restaurant meals with eating at home.
"Although dining out remains a staple for Americans, economic pressures have made consumers more cost conscious. Seven in ten consumers say they eat out at least once a month, yet more than a third report doing so less frequently compared to last year, citing rising costs and a greater need to save financially," said YouGov America Senior Sales Director Nora Hao.
YouGov leveraged consumer research panel, which has 30 million registered members from over 55 markets to create the report.
37% of U.S. diners say they are dining out less frequently than they used to a year ago.
Of these, 69% cite a perceived rise in expensiveness as a reason for them visiting restaurants less often.
More than half of U.S. diners say they have altered their dining preferences with a view to saving money.
Of these, 60% say they are choosing cheaper restaurants, while 53% say they look to use discounts or coupons to cut costs.
It's a market that has led to a number of restaurants struggling, and Huddle House, a diner-style chain, has not been immune. The chain has closed over 50 restaurants and made major menu changes as it attempts to attract younger customers and increase traffic.
Huddle House part of a restaurant closing trend
Huddle House has been shrinking as consumers have opted for cheaper dining choices.
“We expect trade downs to resume at a larger scale from middle income consumers shifting down from Casual and Family Dining in response to inflationary pressures, favoring those brands in Quick Service and Fast Casual,” said Black Box Intelligence Chief Insights Officer Victor Fernandez.
While some restaurants announce closures, Huddle House has simply shrunk its portfolio without public comment.
Denny's, for example, was open about its plans to close between 70 and 90 locations in 2025, adding to 88 closures from 2024.
“I also want to take a moment and provide an update on our previously communicated strategy to close underperforming restaurants and return to pre-pandemic growth of flat to slightly positive in future years. The surgical and methodical approach, which began in 2023 and will be completed by the end of this year, was specifically designed to optimize and enhance the overall health of the franchise system with the goal of returning to net flat to positive growth by 2026,” Denny’s CEO Kelli F. Valade said during the chain's second-quarter earnings call.
Huddle House did not make a similar announcement, but it has been closing restaurants.
The chain’s footprint has shrunk from 313 locations in 2021 to roughly 250 today, based on location counts from the company’s website.
Huddle House changes its business model
In response to its struggles, Huddle House has pivoted from being a sit-down chain to adopting more of a fast-casual or quick-serve model.
"Value, convenience and food quality are the three big drivers that will draw consumers into a restaurant for breakfast. No big surprise there, but priorities differ on weekdays vs. weekends," according to Technomic’s recent Breakfast Consumer Trend Report.
Huddle House has made changes to lean into those trends.
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The company has been testing "a reimagined brand identity and positioning based on months of guest research, new menu innovation improving on the quality of core products for current guests and developing new products for new guests, and a trio of new restaurant prototypes to accelerate the brand’s geographic expansion," the company shared in a press release.
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The chain has its logo in a way that modernizes its signature "HH" — a nod to the signature imprint on every fresh-cooked waffle.
"At the heart of Huddle House’s transformation is a bold redesign of Huddle House restaurants, crafted to maintain the brand’s welcoming heart while attracting new and younger guests," the company shared.
The changes include:
In addition to a totally redesigned and improved new small-town mainline restaurant, Huddle House has developed two new restaurant concepts designed to accelerate growth in urban, suburban, and non-traditional settings.
The QSR conversion format focuses on drive-thru and walk-up ordering, catering to busy urban and suburban areas with a menu packed with Huddle House classics and portable options like sandwiches, burgers, burritos, and waffle tacos.
The Huddle House non-traditional format targets high-traffic locations such as airports, colleges, malls, and travel centers.
The non-traditional concept is designed for convenience, with portable, off-premise dining options in a smaller space of 500 to 1,200 square feet.
The chain has also made changes to its menu.
"After 18 months of rigorous development and testing, Huddle House is currently rolling out significant upgrades to its core offerings — a key pillar of its transformation. Guests can now enjoy the new soft and buttery Southern Country Biscuit, all-new crispy and juicy Chicken Tenders, the new Smashed Huddle Burger, a reimagined Huddle Burger with a soft buttery potato bun, and all-new crispy crinkle fries," the chain shared.
Huddle House offers a diner-style menu.Maslova Valentina via ShutterstockHuddle House needs to grow its sales
"Huddle House’s low unit volumes — $818,000 per its 2024 franchise disclosure document — mean the brand may have little room to maneuver in a tight consumer environment," according to Restaurant Dive.
Huddle House, however, believes it can adapt to meet current market needs.
"The brand’s goal is to preserve the nostalgic, small-town vibe that’s core to the HH identity while updating it for the modern era. The prototype features a warm, inviting interior with booths, counter seating, and open kitchens, paired with contemporary finishes and personalized touches — like city-specific signage — to reinforce its role as a community gathering place," FSR Magazine shared on the chain's efforts to modernize.
The chain has also embraced value by adding a $3.99 breakfast menu.
“We’re that magnet in a sea of quick-service options and much more expensive full-service options,” James O’Reilly, CEO of parent company Ascent Hospitality Management, which also owns Perkins American Food Co. told FSR. “We’re that magnet for communities where everybody knows your name, the food is fresh off the grill, and we’re a place for you, whether it’s you and your friends or your family … and that’s what makes Huddle House just so special.”
Related: McDonald’s rival closes 729 more restaurants
This story was originally published by TheStreet on May 9, 2026, where it first appeared in the Restaurants section. Add TheStreet as a Preferred Source by clicking here.
Source: “AOL Money”
