Sometimes, a business has to be small to grow, or at least that’s what executives, including Wendy’s CFO Ken Cook, say when they explain why they’re closing locations.
“We’re focused on improving the economics of the restaurant scale, taking a hard look at restaurants that are underperforming in our system from a financial and customer standpoint and working with franchisees to improve those, transfer those to another operator or potentially close,” he said during the third quarter earnings call.
Closing up to 350 restaurants, he said, would improve the cash flow of those that remain and leave franchise owners with cash to invest in their remaining locations.
Long John Silver’s, a fast-food chain similar to Wendy’s, has also been closing locations — dropping from more than 1,000 units in 2015 to less than 500 now, based on the Consumer Edge 2026 Restaurant Outlook report.
At its height, the chain operated more than 1,400 restaurants, according to Food Republic.
The company’s Senior Vice President Tony Ellis, like Cook, believes the closures, at least for the past three years, have actually put the seafood chain in a strong position to return to growth.
John Silver’s long streak has faded
Tony Ellis told SeafoodSource that Long John Silver’s has closed “about 110 to 120 locations in the last three years.” He said the company now has 214 company-owned restaurants and 262 registered units, which is the same as the total on the company’s restaurants page.
Long John Silver’s Chief Marketing Officer Laura Ellis said not all closings were due to financial efficiency.
“We want our restaurant experience to be as good as the taste of our food, so we’ve spent a lot of time fine-tuning our approach,” he said. “As you can imagine, our brand has been around since 1969, so some of the restaurants were in dire need of renovations. This means that some of those restaurants have been closed for a while, and some of them are moving from historical techniques.”
Tony Ellis explained that about 70 of the closings came from locations affiliated with Taco Bell, KFC, and A&W, which he said is in line with “a broader trend of large chain industries favoring single-brand locations.”
The chain also survived a Chapter 11 bankruptcy filing in 1998.
“The company listed $457.3 million in liabilities and $329.1 million in assets in a Chapter 11 filing Monday in US Bankruptcy Court in Delaware,” the Tampa Times reported.
That inclusion was due to its acquisition in 1989, which put the company in debt.
Why did Long John Silver lose weight?
QSR Pro published a comprehensive analysis of Long John Silver’s decline in March.
“There is no single villain in this story. Long John Silver’s experience is relatable, engaging, and instructive for anyone working or considering investing in valuable QSR franchises,” the website reports.
Food Costs, QSR Pro noted, created a problem for the chain system.
Other restaurants:
“Food costs are the first problem. Beef prices are volatile, but seafood is in another sector entirely. Wild-caught fish is subject to overfishing, weather conditions, changes in sea temperature, and international trade,” he shared.
Not being able to switch to chicken or beef at times when fish prices are high also created unique challenges for the chain.
“McDonald’s can quietly change its beef mix if prices go up. There’s no similar move if your entire product offering is fish,” added QSR Pro.
Seafood products also have a traffic pattern problem.
“Seafood has historically been a dinner, with a second spike during Lent. That leaves a large volume of breakfast and lunch sitting idle, structural waste that is solved by chains such as McDonald’s or Taco Bell by combining every three days.
Long John Silver’s has revamped some of its restaurants.Shutterstock
Restaurants are struggling
“The restaurant space has been tough. There’s a lot of competition, so it’s a very crowded market to begin with,” Black Box Insights CEO Victor Fernandez told Restaurant Dive.
A lot of bad news is hitting businesses at the same time, Ari Felhandler, a financial analyst who covers the consumer sector at Morningstar, told Restaurant Dive.
“In addition to ballooning food and labor costs, operators face higher insurance premiums, which continues to squeeze their finances, Felhandler added. “At the same time, the industry remains reliant on price increases, continuing to squeeze margins.”
Long John Silver’s is in the middle of a comeback
“The good news is we’re not struggling,” Laura Ellis told SeafoodSource.
He explained that the company recently celebrated 16 consecutive quarters of sales growth, marking a milestone “we are proud of as a brand.”
Tony Ellis added that the chain’s sales will increase from about $400 million by the end of 2022 to about $430 million by the end of 2025.
Four Oaks Partners bought Long John Silver’s in 2022, according to Franchise Times.
“Four Oaks Partners is focused on international expansion, with a special focus on the Southeast Asian market. It has continuously operated many locations in Singapore since 1983, and in recent years, it has opened new locations in Thailand, Indonesia and Malaysia,” according to Food Republic.
Laura Ellis, who spent eight years at Yum Brands, thinks the brand has potential to grow at home.
“Sometimes you work for a crappy company and people say, ‘I used to like that, but I don’t like it anymore.’ When I tell people I work for Long John Silver’s, that’s not the reaction I get at all. It says, ‘I like Long John Silver’s. I didn’t know there was one near me,’” he told Franchise Times.
“We’re raising awareness and reminding people that we’re here and we’re opening new places.”
Related: Discontinued Pepsi soda brand quietly returns to stores
This story was originally published by TheStreet on Jun 21, 2026, where it appeared first in the category Restaurants. Add TheStreet as a favorite source by clicking here.
