Even as Wendy’s prepares to close hundreds of restaurants across the U.S., the fast-food chain is accelerating its expansion abroad.
Facing declining sales in its largest market, the company is increasingly targeting Mexico, where rising consumer demand and strong brand awareness have created a major expansion opportunity.
The contrasting move underscores the company’s broader effort to rebalance its business after a challenging year in the U.S., which still represents the majority of its global footprint.
Wendy’s sales slump triggers mass U.S. restaurant closures
Wendy’s (WEN) reported that systemwide sales declined 5.2% in 2025, according to its latest financial earnings reports.
In response, the company revealed plans to close between 300 and 600 underperforming restaurants across the U.S. during the first half of 2026. The closures represent approximately 5% to 6% of its domestic locations, though no list of specific locations affected has been released yet.
“By closing consistently underperforming restaurants, we are enabling our franchisee partners to increase focus on locations with the greatest potential for profitable growth,” said Wendy’s CEO Ken Cook in the company’s latest earnings call.
Founded in 1969, Wendy’s remains heavily reliant on the U.S. market. As of the end of 2025, the company operated 5,969 U.S. restaurants out of 7,397 total locations worldwide, according to its financial filings.
Wendy’s confirms 60 new restaurants in Mexico
While it’s shrinking its U.S. footprint, Wendy’s is expanding in Mexico.
The company recently finalized two franchise agreements that will add more than 60 new Wendy’s restaurants in the country over the coming years as part of its international growth plans, according to the announcement.
Mexico franchise agreements
- Mexico City Region: Wendy’s plans to open 50 new restaurants through a partnership with AJ Group across Mexico City and surrounding states, including Hidalgo and Morelos.
- Northern Mexico Region: A separate agreement with WS Pacific will bring 12 additional restaurants to northern Mexican states, including Sinaloa and Durango, with openings expected by the end of the year.
“These agreements reflect the growing consumer demand for Wendy’s in Mexico and reinforce the brand’s accelerating presence across Latin America,” said Wendy’s Managing Director of the Latin American & Caribbean Region Carlos Ribas in a statement.
“By partnering with experienced franchise groups and continuing to invest in the right local resources, we have built a strong foundation for sustainable growth in the market,” he added.
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International growth leads amid weakening U.S. sales
Recent financial results show why Wendy’s is increasingly focusing on international expansion.
During the fourth quarter of fiscal 2025, global system sales decreased 8.3% year over year to $3.4 billion, according to the company’s financial statement.
Much of this decline came from the U.S., where system sales fell 10.5%, significantly affecting overall performance.
However, international system sales increased 6.2% during the same period, providing a key source of growth for the chain.
“We are making progress against our Project Fresh turnaround plan in the U.S. and continue to deliver strong growth internationally,” said Cook in the earnings release.
Mexico emerges as a key growth opportunity
Among Wendy’s global markets, Mexico is one of the company’s most promising expansion opportunities.
The chain has operated in the country for more than 30 years, and the local burger quick-service restaurant market reached $2.4 billion in 2024. The sector has grown at an average annual rate of 14.3% over the past five years, with continued growth projected at 7.1% annually.
Consumer awareness of the brand is already strong.
In areas where Wendy’s operates, 71% of consumers have tried the brand, reflecting high engagement.Even in regions without an existing restaurant, brand awareness reaches 92%, and 46% of consumers report having already tried Wendy’s.
Those figures suggest significant room for expansion as the company continues building its presence across the country.
Fast-food chains expand internationally
Wendy’s is not alone in pursuing international growth as the U.S. quick-service restaurant market becomes more competitive.
Major brands accelerating overseas expansion
- Chick-fil-A: Opened its first two overseas restaurants in Leeds, England, and Singapore in 2025, as reported by The Street.
- Dine Brands Global (DIN): Opened 18 international Applebee’s and IHOP dual-branded concepts in 2025, as reported by The Street.
- Chipotle Mexican Grill (CMG): Plans to open its first-ever restaurant in Mexico in early 2026, as reported by The Street.
- Taco Bell (YUM): Opened its first-ever restaurant in Ireland in mid-2025, as reported by The Street.
Wendy’s turnaround strategy
The U.S. closures are part of Wendy’s broader turnaround strategy known as “Project Fresh,” introduced in October 2025.
This plan aims to revitalize the brand, reignite growth, improve profitability across its franchise system, and strengthen long-term shareholder value, according to a company announcement.
Key actions
- Brand revitalization: Strengthening the Wendy’s brand by leveraging its heritage of quality, innovation, and distinction to attract younger consumers.
- System optimization: Reallocating resources to increase average unit volume (AUV) in the U.S. through labor optimization, adjusted operating hours, and targeted investments with franchise partners.
- Operational excellence: Increasing investments in hospitality, digital ordering, equipment efficiency, simplified operations, employee training, and restaurant technology to improve customer experience.
- Capital allocation: Reduce Build-to-Suit spending by around $20 million in 2025, with deeper cuts expected in 2026 to fund U.S. AUV growth initiatives while maintaining dividends and shareholder returns.
Analysts weigh in on Wendy’s strategy
Some industry experts say Wendy’s reset could be necessary as the company works to stabilize performance.
Peter Economy, an author and leadership expert, said companies sometimes need to slow down expansion to strengthen their core business.
“As a leader, you often feel pressure to continually grow your business, but not every season is an attack phase,” wrote Economy on Inc. Magazine. “Slowing your expansion and focusing on stabilizing your core can sometimes be your best strategy to protect long-term growth.”
More Restaurant Closures:
- 31-year-old Italian restaurant chain closing its final locations
- Applebee’s confirms more closures in 2026 as new concept expands
- 53-year-old restaurant chain is quietly closing locations nationwide
Others argue the company must focus on product quality in addition to operational changes.
David Moon, President of Moon Capital Management, said that operational improvements alone may not be enough.
“Wendy’s can close stores, remodel dining rooms and issue press releases about efficiencies, but operational cuts are not a real solution for a lousy product,” Moon wrote in the Knoxville News Sentinel. “Eventually you have to make something that people actually want to eat.”
Wendy’s stock performance
Wendy’s shares have fallen nearly 11% year to date as of March 6, 2026.
The stock currently carries a consensus “Hold” rating from 26 brokerages, with a one-year average price target of about $9.30, according to data by MarketBeat.
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