DineEquity Inc. is expecting to close 105 to 135 Applebee’s locations worldwide. DineEquity’s quarter fiscal 2017 report showed that stores are expected to close because of customers, lease expirations and changing trade areas
In the past few years, businesses serving comfort food have hit slumps. DineEquity, the company that franchises and operates Applebee’s and IHOP restaurants, calculated that Applebee’s was losing $26.4 million because of the drop in revenue.
DineEquity has decided a closure of 75 restaurants worldwide would be ideal. DineEquity can not directly close franchised stores because they are individually ran, but can offer guidance towards better investments.
“For brands as large as ours a certain percentage of closures is expected and healthy for the system. So for IHOP we anticipate growing (expected more than 4% growth) for Applebee’s a bit higher closure rate than normal or to be expected,” said Patrick Lenow, Vice President, communications & public affairs DineEquity Inc.
The DineEquity report ran by Richard J. Dahl, chairman and interim chief executive officer of DineEquity, said they were closing stores due to dependence on information technology, inability to properly fund expenditures, consistency failures and more.
The Applebee’s franchises have not stated about the decisions of closing locations. In place of the Applebee’s closure, DineEquity expects to expand on current restaurants, such as IHOP.
“IHOP remains on solid ground, despite soft sales this quarter. I am optimistic about the growth in both franchise restaurants and system-wide sales,” said Richard Dahl, interim CEO and chairman.
There are currently fewer than 80 IHOP restaurants in the US, but recently, DineEquity announced that it intends to open 85 to 90 restaurants in the United States alone.
The organization stated they wanted to regroup and re-establish its franchises to make them more successful in the future.