The announcement of closures for up to 35 Applebee’s restaurants across the United States in the coming year marks a significant development for the beloved family-friendly chain and its parent company, Dine Brands Global. Amidst this decision, Tony Moralejo, the president of Applebee’s, shared insights during an earnings call, indicating an anticipated closure range of 25 to 35 locations.
This move reflects a larger trend of closures that Applebee’s has experienced in recent years. In 2023 alone, 46 locations were shut down, following a similar pattern in 2017 when over 100 restaurants were axed. While the closures are undoubtedly challenging, they are often part of strategic restructuring efforts aimed at optimizing operational efficiency and refocusing resources on high-performing locations.
Despite these closures, there is hope on the horizon for Applebee’s fans. Dine Brands Global has entered into a promising agreement with Flynn Group, the world’s largest restaurant franchise operator. This partnership aims to inject fresh energy into the brand by opening 25 new Applebee’s restaurants across the U.S. over the next seven years. Although the specific locations for these new establishments have not been disclosed, Flynn Group’s extensive presence in 23 states suggests potential expansion opportunities across diverse regions.
The decision to close some locations while simultaneously embarking on an expansion plan underscores Dine Brands Global’s commitment to revitalizing the Applebee’s brand and capturing new growth opportunities. This strategic approach acknowledges the challenges posed by closures while leveraging partnerships and market insights to drive future success.
The financial results for the first quarter of 2024, as reported by Dine Brands Global, revealed declines in sales for both Applebee’s and IHOP, the company’s other flagship brand. Applebee’s experienced a sales dip of 4.6 percent, while IHOP’s sales declined by 1.7 percent. Vance Chang, the chief financial officer of Dine Brands Global, attributed these declines to consumer price sensitivity and challenging weather conditions. However, Chang expressed confidence in the company’s underlying business model, citing solid cash flow and positioning to deliver on annual guidance.
As Applebee’s navigates these closures and executes its growth strategy, it reflects broader trends within the restaurant industry. Evolving consumer preferences, economic factors, and competitive pressures continue to shape the landscape, driving companies to adapt and innovate. The outcome of Dine Brands Global’s strategic initiatives, including its partnership with Flynn Group and efforts to address market challenges, will be pivotal in determining the future trajectory of Applebee’s and its role within the dynamic dining landscape.