MTY Food Group Inc., a major Canadian franchisor and operator of casual dining and quick-service restaurants, has announced plans to close 68 underperforming stores. The decision comes as the company seeks to streamline operations and strengthen its portfolio of brands, which include Manchu Wok, Thai Express, and many others.
Restructuring to Boost Profitability
Eric Lefebvre, CEO of MTY Food Group, stated that the closures are part of a strategic review aimed at improving the company's financial performance. “We are focusing on our core brands and locations that offer the best potential for growth,” Lefebvre said. “These closures will allow us to allocate resources more efficiently and enhance our overall profitability.”
The affected stores are located across Canada and represent a mix of company-owned and franchised locations. MTY has not disclosed which specific brands or regions will be impacted, but the company expects the closures to be completed within the next few months.
Impact on Employees and Franchisees
The closures will result in job losses for an unspecified number of employees. MTY has stated that it will work with affected franchisees and staff to minimize disruption. “We are committed to supporting our employees and franchise partners during this transition,” Lefebvre added. The company plans to offer relocation opportunities where possible and provide severance packages in accordance with Canadian labor laws.
Focus on Core Brands
MTY Food Group operates more than 80 restaurant brands, including popular names such as Valentine, Country Style, and Mr. Sub. The company has been expanding through acquisitions in recent years, but the current economic environment has prompted a reassessment of its portfolio. “We are prioritizing brands that have strong customer loyalty and growth potential,” Lefebvre explained. “This includes our Asian cuisine concepts like Manchu Wok and Thai Express, which continue to perform well.”
Financial Performance and Outlook
MTY reported a net income of $12.3 million in its most recent quarter, down from $15.1 million a year earlier. Revenue also declined, reflecting the challenges faced by the restaurant industry amid rising costs and changing consumer habits. The company expects the store closures to result in annual cost savings of approximately $6 million, which will help improve its bottom line.
Analysts have reacted cautiously to the news. “MTY’s decision to close underperforming stores is a necessary step to strengthen its financial position,” said restaurant industry analyst Sarah Thompson. “However, the company still faces headwinds from inflation and labor shortages, which could continue to pressure margins.”
Industry Context
The Canadian restaurant industry has been under strain due to rising food costs, labor shortages, and shifting consumer preferences toward healthier options. Many chains have been forced to close locations or scale back expansion plans. MTY’s move reflects a broader trend of consolidation and rationalization in the sector.
Despite the closures, MTY remains optimistic about its long-term prospects. The company is investing in digital ordering and delivery platforms to adapt to changing consumer behavior. “We are evolving our business model to meet the needs of today’s customers,” Lefebvre said. “These changes will position us for sustainable growth in the future.”
The 68 closures represent about 5% of MTY’s total store count, which stands at over 1,200 locations in Canada and internationally. The company expects to record a one-time charge of approximately $4 million related to the closures in its next financial report.
