The largest restaurant chain in the United States is slamming the brakes, shuttering hundreds of stores in a move that’s rattling the fast-food world. McDonald’s, the golden arches that dot nearly every highway and small-town corner, announced a sweeping plan to close underperforming locations across the country, with estimates pegging the number between 400 and 600 by the end of 2025. This isn’t a quiet trim—it’s a full-on retreat, driven by cold, hard numbers and a shifting economic landscape.
On April 16, during a tense earnings call, McDonald’s CEO Chris Kempczinski laid it bare: same-store sales were down 2.3% in the first quarter, the worst drop in five years. Foot traffic has been sliding since late 2024, with customers pinching pennies as inflation bites. The company’s filings with the Securities and Exchange Commission confirm the closures are part of a “strategic realignment” to cut losses and focus on high-performing markets. Rural areas and low-income urban pockets are getting hit hardest, where stores have struggled to pull in enough sales to justify sky-high operating costs.
The math is brutal. A typical McDonald’s needs about $3 million in annual revenue to break even, but dozens of locations—especially older ones built in the ’80s and ’90s—are barely scraping $2 million. Rising wages, up 30% since 2020 according to Labor Department data, and food costs that haven’t stopped climbing are squeezing margins. Beef prices alone jumped 8% last year. Add in leases that haven’t been renegotiated in decades, and you’ve got a recipe for red ink.
The closures aren’t just numbers on a spreadsheet. In places like Springfield, Ohio, where a McDonald’s on Main Street served its last Big Mac on April 30, locals are reeling. That spot had been a fixture for 42 years, a hangout for teens after school and retirees nursing $1 coffees. Now, it’s a boarded-up shell, with 45 workers out of jobs. Similar stories are unfolding from Bakersfield, California, to Bangor, Maine. The company’s own reports admit that 80% of the targeted stores are in regions with unemployment rates above the national average, meaning laid-off employees face a rough road.
Franchisees, who run about 95% of McDonald’s 13,500 U.S. locations, are feeling the heat. A March 2025 memo from the National Owners Association, obtained by Bloomberg, warned that “hundreds of operators” risk bankruptcy if closures don’t stop the bleeding. Some franchisees are stuck with leases on shuttered stores, paying rent on empty buildings while corporate shifts focus to drive-thru-only “McCafé” models in wealthier suburbs.
The chain isn’t alone in pulling back. Industry filings show competitors like Burger King and Wendy’s also axed over 200 locations combined last year. But McDonald’s, with its massive footprint, casts the longest shadow. Its stock dipped 6% after the April announcement, and analysts are buzzing about a “fast-food recession.” The company’s latest 10-Q filing projects $1.2 billion in write-offs for the closures, a hit that’s got investors jittery.
For now, McDonald’s is doubling down on tech to stem the tide—think AI-driven menu boards and delivery apps—but it’s not enough to save the struggling stores. By December 2025, the company expects to operate fewer than 13,000 U.S. locations, the lowest in two decades. More closures could follow if sales don’t rebound.