A McDonald’s rival with 500 locations is now making unexpected closures in a few major states this month, sources are confirming.
While McDonald’s often takes the limelight as the iconic burger chain, Shake Shack offers a compelling alternative with its rich milkshake menu, appealing to many fast food enthusiasts.
However, fans of Shake Shack have some disappointing news: the chain will be closing several locations.
In September, Shake Shack’s leadership announced the permanent closure of at least nine stores, impacting customers in Texas, California, and Ohio, as reported by Nation’s Restaurant News.
According to the company, these closures are due to underperformance, influenced by changes in the surrounding trade areas.
Some locations were reportedly cannibalizing sales from nearby Shake Shacks, which contributed to the decision, as noted in a filing with the Securities & Exchange Commission.
Shake Shack representatives stated that these closures would allow the company to better allocate resources to its remaining 500 locations across the country.
They reassured fans that no further closures are planned at this time.
Employees at the affected locations will be given the option to transfer to nearby restaurants or receive a severance package equivalent to two months’ pay.
Shake Shack enthusiasts in the three states should enjoy their favorite spots before they close later this month.
In Texas, two locations in Houston—at the Galleria Mall and Montrose—will shut down.
Several Shake Shack outlets in the Los Angeles area, including those in Bunker Hill, Downtown Culver City, Koreatown, and Silverlake, are also on the chopping block.
Additionally, a location at the Westfield Topanga Mall in California will close, as will the Shake Shack at Polaris Mall in Columbus, Ohio.
While these closures aim to save the company money, they are expected to incur significant costs, with an estimated $28 million in fees related to the shutdowns, plus additional cash and employee-related expenses.
Shake Shack had previously raised hopes for expansion by opening 20 new locations last quarter.
However, the fast food industry as a whole has faced challenges recently.
McDonald’s reported a global sales decline last quarter and a 15% drop in sales for the previous year.
Although the introduction of a $5 meal deal in June helped increase sales by 4%, it hasn’t completely offset the downturn.
Wendy’s has also seen a dip in profits after gradually raising menu prices.
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Also Read: Another Mall Clothing Retailer Now At High Risk of Bankruptcy
Other Economy News Today
A massive rental company with 34k locations now shuts down its operations after filing for bankruptcy and 22 years in business.
Users of movie rental company Redbox were left saddened after it was announced that it would be shutting down operations.
The announcement comes after the rental company’s parent company, Chicken Soup for the Soul Entertainment, filed for Chapter 11 bankruptcy.
According to court documents obtained by the Washington Post, the Connecticut-based company claimed to be one billion dollars in debt.
As a result, Redbox, which was a staple of many grocery stores including Walgreens, and CVS will be shuttered.
Many fans took to social media to express how upset they were with the loss.
“I knew it was coming, sadly,” UltraVada wrote in a post on X, formerly Twitter.
“It was inevitable,” a second person mourned.
“I knew this would happen when I heard they filed for Bankruptcy but its still sad to hear. I have a lot of fun memories of Redbox,” a third person lamented.
“I still don’t think this will be or ever be the end of physical media as we do still get remasters of some movies in 4k/Bluray.”
One person revealed that they had forgotten the rental service had existed.
Some users were not surprised by the announcement.
“Not surprised since nobody really rents videos anymore with the rise of streaming and what not,” one user admitted.
“Also kinda remember getting into a feud with them on here.”
One user also pointed out that the last remaining Blockbuster, located in Bend, Oregon, managed to outlive Redbox.
Redbox was acquired by Chicken Soup for the Soul Entertainment (CSSE) in 2022 and became one of the company’s flagship video-on-demand streaming services.
At its peak, CSSE operated more than 20,000 DVD rental kiosks across the country.
The company’s filing means that the company’s more than 1,000 employees will be laid off, per The Wall Street Journal.
It was also reported by Deadline that many employees at CSSE hadn’t received their paychecks and had medical benefits cut in late June.
Also Read: This Massive Mall Retailer Is Now Closing In California
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