How Many Restaurants will Close in 2026?

February 2025 Monthly Second Helping: Highlighting Hot Topics in the Industry

What BBI Data Tells Us About: Unit Closures in 2026

BBI data shows that we should expect more unit closures this year.

The past several years have been difficult for the restaurant industry. As a result, many restaurant chains have shuttered sizeable portions of their units. Unfortunately, that trend is likely to continue in 2026.

The Closure Risk Landscape

To measure what portion of units are at risk for closure, Black Box Intelligence analyzed all of the restaurant units it tracks and calculated their sales in 2025 as a percentage of their peak annual sales since 2019. Any unit that was at 70% or below from their recent historical peak year (the year with the highest sales during the 2019-2025 period), we categorized as “at-risk” in 2026. In other words, if a restaurant unit lost 30% or more of its peak sales in 2025, they are likely going to be under scrutiny this year when reviewing the brand’s portfolio for cuts to be made.

While about 85-90% of the industry is holding strong at peak or near peak performance, 9% of Full Service units are at-risk. Casual Dining units made up a significant percentage of that number.

Meanwhile, only 4% of Limited Service are considered at risk.

This is in line with an October 2025 Black Box Intelligence study which found that Fast Casual and Quick Service had the highest percentage of net unit growth since 2022 (15.5% and 5.8%, respectively), while Casual Dining had a deficit of 3.3% of units, with restaurant closures outpacing any openings.

Which Areas Are Most at Risk?

The DMAs most at risk (listed below) tend to have high restaurant density (high supply) and lower median incomes. After several years of higher than usual inflation rates, median income families have more often traded down to Limited Service restaurants or stayed home entirely.

A map of the United States highlights eight cities with most at-risk units for 2025 peak sales, reflecting how factors like restaurant popularity in holidays may impact Fresno-Visalia, Harlingen, Tulsa, and others on the list.

Additionally, many of these DMAs also have high diabetes rates, a good proxy for GLP-1 adoption, which has further exacerbated the decline in restaurant demand.

What to Expect This Coming Year

In an environment where inflation has increased costs by nearly a third since 2019, it’s virtually impossible to stay open with such major drops in sales. This is especially true of those units most at risk: the 3% of Full Service restaurants and 1% of Limited Service ones that lost more than 50% of their peak sales in 2025. Within this group is where we are most likely to find those on the chopping block.

Unless these units can quickly change course, the question is not if these units will close but when.

While no one in the industry is celebrating unit closures, there is a silver lining. Restaurant closures in a saturated market can mean a shift in traffic to other nearby units in the market and improve financial results for those that remain, as well as better financial results for those brands that are making the cuts.