MJP –
Several large states are experiencing the sudden closure of a McDonald’s competitor with 500 sites this month, according to sources.
Fast food fans aren’t only drawn to McDonald’s because of its famed burgers; Shake Shack’s rich milkshake selection is a tempting option.
But bad news for Shake Shack fans: many locations will be shutting down.
As stated by Nation’s Restaurant News, Shake Shack’s leadership announced the permanent closure of nine restaurants in September, affecting consumers in Texas, California, and Ohio.
The business claims that bad performance, caused by shifts in nearby trade sectors, is to blame for these closures.
The decision was influenced by reports that certain locations were eating into the business of neighboring Shake Shacks, as mentioned in a filing with the Securities & Exchange Commission.
The spokespeople for Shake Shack said that the chain could then devote more resources to its 500 other restaurants around the nation.
SEE MORE –
Massive Fraud! Cyberattack on McDonald’s Results in $700K Gain for Hackers in Solana
They put fans’ minds at ease by saying there are currently no plans for any such closures.
Staff members at the impacted restaurants will be offered two months’ pay as severance or the chance to shift to other adjacent properties.
The three states’ Shake Shacks will be closing later this month, so customers should savor their last meals there.
The Galleria Mall and Montrose, two Houston locales in Texas, will close their doors.
Los Angeles region Shake Shacks in Bunker Hill, Downtown Culver City, Silverlake, and Koreatown are among those that could be shuttered.
The Shake Shack in Columbus, Ohio’s Polaris Mall and the one in Westfield Topanga Mall, California, will both be closing their doors soon.
Even though these closures are meant to save money for the corporation, they are anticipated to cause a lot of expenses, including around $28 million in shutdown-related fees, along with other cash and employee-related costs.
The announcement of 20 additional Shake Shack restaurants in the previous quarter had stoked expectations of an expansion.
Still, there have been some recent setbacks for the fast food sector generally.
In the most recent quarter, McDonald’s worldwide sales fell, continuing a 15% year-over-year loss.
A $5 lunch bargain that was introduced in June did help boost sales by 4%, but it hasn’t been enough to reverse the decline.
The steady increase in menu prices at Wendy’s has also reduced the chain’s profit margin.
