When a restaurant offers a limited menu, it must execute well on its signature item, especially if its rivals offer that product and many more.

Any dining chain operating in the casual sit-down space has to battle chains like Chili’s and Applebee’s, which have focused their menus on both value and diversity of choices.

Part of the reason those chains succeed is that they offer something for everyone. A family may all want pizza on the same night, making a chain with a deep menu an easy answer to the fight over where to go for dinner.

Red Robin, with its hamburger-focused menu, has struggled in recent years. This is partially because it lost some of its perceived value as Chili’s built advertising campaigns around its burger deals, which often included an appetizer and a drink.

CEO David Pace, who is leading Red Robin’s turnaround efforts, has countered that by bringing back value as a marketing focus.

“First, our $9.99 Big Yummm value offer continues to resonate. Within our dine-in channel, it delivered 10% guest mix in the fourth quarter, strengthening our relevance with value-seeking guests and supporting incremental traffic and trial,” he said during the chain’s first-quarter earnings call.

As part of the chain’s turnaround plan, it has decided to close a number of underperforming locations. Thirty Red Robin locations have already closed down, and more will shutter in 2026, but the situation has somewhat improved.

Red Robin has leaned on value to bring back customers.

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Red Robin has struggled

Red Robin faces pressure from sit-down rivals such as Chili’s and Applebee’s, which have focused on menus that balance both value and variety. These chains succeed partly because they offer something for everyone.

The chain also struggles with customers trading down to fast-food chains such as McDonald’s and Burger King. Additionally, it competes with higher-end fast-casual chains, like Shake Shack and Five Guys, that offer lower prices.

We actually have a home within walking distance of Red Robin, but still choose the BJ’s next door, which has comparable burgers and a larger menu. Choosing Red Robin requires diners to know in advance that they want burgers and to feel that the product is superior to other options.

The chain, however, has made some progress in its turnaround efforts, sharing its full-year 2025 numbers in its fourth-quarter earnings report.

  • Comparable restaurant revenue, excluding the impact of deferred loyalty revenue, decreased 0.3%.
  • This included a 3.8% decrease in guest traffic, a 0.7% decrease in menu mix, and a 4.2% benefit from net menu pricing.
  • The benefit from net menu pricing decreased steadily throughout fiscal 2025, as Red Robin intentionally took limited pricing actions during the year to improve value for guests.
  • Restaurant-level operating profit margin of 12.7% was a 1.9% improvement from fiscal year 2024.
  • Adjusted EBITDA was $69.7 million, a 53% increase from fiscal year 2024.

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The company remains in a challenging cash position.

“As of December 28, 2025, the company had outstanding borrowings under its credit facility of $170.2 million and liquidity of approximately $56.9 million, including cash and cash equivalents and available borrowing capacity under its credit facility,” it shared.

Analysts see Red Robin progress

Analysts, however, do see upside in the chain.

“Jefferies upgraded Red Robin Gourmet Burgers to Buy from Hold, saying the casual dining chain offers a compelling risk-reward after signs of traffic stabilization and a low valuation heading into 2026,” Investing.com reported.

Zacks shared a research note in December that touted Red Robin’s efforts.

“The company continues to demonstrate solid progress as its ‘First Choice’ plan gains momentum, supported by improving traffic trends, strong operational execution, and ongoing menu innovation. RRGB’s enhanced marketing strategy, compelling value offerings, and disciplined cost-efficiency initiatives remain central to driving long-term, sustainable growth,” Zacks shared.

Red Robin trims its shutdown list

When Red Robin first shared its “First Choice” turnaround plan, the chain planned to close 70 restaurants. That list has been cut to 50.

Pace explained why that decision was made during the earnings call.

“Yes. Look, I think in terms of the restaurant size, we’re still trying to optimize the portfolio. Going back a ways, we found we’ve made improvements on about 20 restaurants that we had previously identified as potential problems for us or potential closures. We’ve moved them off the closure list to where we think we can operate them and are hopeful that we can get them back to a performance level that equals the rest of the system,” he shared.

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Red Robin closure timeline

Red Robin has already closed many underperforming locations, but has scaled back its shutdown plans, a sign that its turnaround efforts have been working.

  • Red Robin said it plans to close up to 70 underperforming restaurants over several years, largely by not renewing leases, as part of a turnaround and cost-cutting strategy, according to Restaurant Dive.
  • Red Robin has not published a full list of affected locations, but confirmed closures have occurred across multiple states, including California, Illinois, Minnesota, and Massachusetts, reported TheStreet’s Veronika Bondarenko.
  • Management has said future closures will depend on lease economics and unit-level profitability, with the goal of improving margins rather than pursuing bankruptcy, according to the company’s Investor Relations page.

AInvest.com shared just how challenging Red Robin’s situation is.

“The bottom line is a business in a fragile transition. The late inflection shows the plan can work, but the underlying sales weakness and the cost of fighting for it highlight how far the company still needs to go. For now, the catalyst is a positive headline that doesn’t change the fundamental weakness of the quarter,” the site reported after analyzing the chain’s fourth-quarter earnings.

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