Red Robin Cuts Up to 70 Stores as Debt Restructuring Accelerates

Red Robin Gourmet Burgers is accelerating its restructuring plan, closing underperforming locations and shifting 116 company-owned restaurants to franchise operators. The 57-year-old chain closed 23 restaurants in 2025 and plans up to 20 more closures in 2026 as it works to pay down approximately $170.2 million in debt. CEO Dave Pace said operational improvements allowed the company to remove about 20 locations from the closure list, signaling some stabilization.

Why Red Robin is closing restaurants

Red Robin identified roughly 70 underperforming locations with weak sales and expiring leases in late 2024. The company launched its First Choice Plan in July 2025 to cut debt, trim costs, and sell restaurants to franchisees. The casual dining chain’s 2024 revenue fell to $1.25 billion, down $54.5 million from 2023, pressuring the company to restructure its footprint of nearly 500 U.S. and Canadian locations.

Refranchising deals bring in $96 million

Red Robin agreed to sell 86 company-owned restaurants to Op Burgers and Kuber for $72.5 million in June 2026. An earlier deal sold 30 locations to Evergreen Dining. Combined, the three agreements generated roughly $96 million in cash Red Robin is directing toward debt repayment. Op Burgers acquired 69 restaurants across Kentucky, Indiana, Maryland, Ohio, North Carolina, Pennsylvania, South Carolina, and Virginia. Kuber Oregon and Kuber Washington took 17 locations in those two states.

Confirmed closures and what comes next

The Cary, North Carolina Red Robin location is closing after Red Robin sold the property for $3.3 million. Confirmed closures have also occurred in Illinois, California, and New Jersey. The company has not released a complete list of 2026 closures, saying decisions depend on individual restaurant performance and lease terms. Red Robin has not filed for bankruptcy and continues introducing menu improvements and operational changes to boost sales at remaining locations.

Stock impact and investor outlook

Red Robin stock (RBRK) fell 0.7% on July 16 to $79.82, trading near its 52-week low of $42.25. Meyka grades the stock a C with a Sell recommendation, citing weak profitability metrics and negative cash flow trends. Analyst consensus remains bullish with 16 Buy ratings and no Sell ratings, though the 12-month price target of $98.76 implies limited upside from current levels given execution risk on the turnaround plan.

Final Thoughts

Red Robin’s restructuring is slowing the bleeding but not reversing it. With debt still above $170 million and revenue declining, the company faces a narrow path to profitability. Investors should watch Q2 2026 earnings for proof that operational improvements are sticking.

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