According to Business Wire, Hy-Vee commands the Midwest with over 285 stores across eight states, generating more than $13 billion annually as an employee-owned corporation.
The Iowa-based grocery giant employs 75,000 people under its “helpful smile in every aisle” motto. But beneath this folksy reputation lies a corporate machine that makes tough business decisions when partnerships fail to deliver expected returns, even for brands with familiar faces.
Empire Collapse
Celebrity restaurant chains used to attract customers, but in 2025, they are failing at unprecedented rates. Chains like Planet Hollywood have been reduced to just two locations after three bankruptcies, according to The Street.
Jamie Oliver’s restaurant empire once boasted 25 locations, but it collapsed in 2019, shuttering 22 restaurants and costing 1,000 jobs, according to the BBC.
Grocerant Dreams
The “grocerant” trend promised to revolutionize grocery shopping by combining retail and restaurant experiences under one roof. Industry analysts predicted prepared food sales would transform supermarkets into dining destinations, according to Forbes in 2016.
Hy-Vee embraced this vision in 2017, partnering with Wahlburgers to create hybrid experiences designed to keep customers shopping longer and spending more on premium dining options. This led to Wahlburgers’ rapid expansion, which couldn’t be sustained forever.
Expansion Fever
According to Entrepreneur magazine, Mark Wahlberg’s restaurant empire grew from 30 locations in 2019 to 109 by 2023. The Massachusetts-based chain rode reality TV fame and aggressive franchising to establish footholds across multiple states.
Hy-Vee became their largest franchisee, operating kiosks in grocery stores from Iowa to Wisconsin while Wahlberg projected confidence about building entertainment complexes in Las Vegas.
The Reckoning
On January 21, 2025, Hy-Vee announced grim news for the franchise – the immediate closure of all 79 Wahlburgers locations across eight Midwestern states. This ended an eight-year partnership, according to Supermarket News.
In the wake of the closures, the grocery giant converted every location back to its Market Grille concept by February 4. This unprecedented mass closure reduced Wahlburgers from 109 total locations to approximately 34 remaining restaurants nationwide.
Midwest Exit
According to Marshall Independent reporting, Iowa bore the heaviest losses, with Wahlburgers disappearing from all Hy-Vee locations statewide.
Wisconsin, Illinois, Kansas, Minnesota, Missouri, Nebraska, and South Dakota customers discovered their local celebrity burger joints transformed overnight into traditional grocery restaurants. This left thousands of customers displaced as their favorite celebrity restaurant disappeared rapidly.
Response To Customer Feedback
Hundreds of Wahlburgers-trained staff faced immediate career changes as Hy-Vee transitioned workers to Market Grille operations. According to Axios Des Moines, Hy-Vee spokesperson Tina Potthoff acknowledged that “customers generally wanted a different selection,” explaining the decision to abandon the celebrity burger concept.
The transition represented a direct response to customer preferences built over years of underwhelming performance.
Industry Analysis
Restaurant failure rates reached new highs in 2025, with over 72,000 establishments closing nationwide due to rising costs and changing preferences, according to RestroWorks analysis.
The grocery store dining model was once seen as an innovative concept, but proved incompatible with modern dining expectations across multiple restaurant concepts.
Performance Issues
Poor financial performance, which had been brewing for years, was one of the driving forces behind Hy-Vee’s mass closure. Wahlburgers CEO Randy Sharpe acknowledged that “it’s not a full-service restaurant, and it wasn’t a significant revenue driver for either side,” according to Parade magazine.
The kiosk format within grocery stores generated disappointing returns compared to standalone restaurants, creating fundamental tension about operational standards and customer experience between the partners.
Corporate Takeover
Hy-Vee’s mass closure meant that Wahlburgers had to strategically retreat from franchising altogether. According to Star Tribune reporting in January 2025, CEO Randy Sharpe took direct corporate control of the prestigious Mall of America location.
This move represented the end of Wahlburgers’ expansion-through-franchising strategy, which had driven rapid growth since 2019. It signaled lost confidence in external operators’ quality standards.
Executive Frustration
CEO Randy Sharpe’s public criticism revealed deep organizational tensions brewing for months. “We are growing restaurants. We’re not going to be in the grocery business. It’s best that everyone stays within their skill sets and moves on,” Sharpe told Restaurant Business Online.
His blunt assessment indicated that Wahlburgers’ management viewed Hy-Vee’s operations as incompatible with restaurant quality expectations.
Menu Overhaul
Hy-Vee’s transition revealed deeper customer dissatisfaction with Wahlburgers’ offerings. According to Restaurant Dive, Tina Potthoff explained that the “selection wasn’t popular among shoppers” for both restaurant concepts.
The new Market Grille menus would offer more affordable options than Wahlburgers’ higher-priced items, directly addressing customer feedback about value and variety.
Rebuilding Strategy
After losing 72% of its locations, Wahlburgers made the surprising announcement to open 15 new company-owned restaurants in 2025, focusing exclusively on standalone locations.
According to Nation’s Restaurant News, the chain shifted its expansion strategy toward international markets while maintaining operations in Australia, Canada, and New Zealand.
Industry Context
Restaurant industry analysts note that approximately 17% of restaurants fail in their first year, with 49% closing within five years, according to RestroWorks data published in 2025.
The Wahlburgers-Hy-Vee partnership dissolution represents a broader trend of franchise concept failures, particularly in non-traditional locations where operational challenges compound financial pressures. In the modern restaurant landscape, celebrity backing alone cannot overcome fundamental business model misalignment and customer satisfaction issues.
Future Reality
As Wahlburgers attempts its comeback, the fundamental question remains whether celebrity endorsement can sustain a restaurant business without operational excellence.
With restaurant consolidation accelerating, Wahlburgers’ future depends on proving that the Wahlberg name represents genuine value rather than just celebrity appeal in an increasingly competitive marketplace.