The International House of Pancakes has purchased chain restaurant leader Applebee’s for $2.2 billion, according to the Wall Street Journal. So, what did they get for their money? And does this mean Applebee’s is going to start having sticky tables?
Applebee’s, the nation’s largest sit-down restaurant chain with about 2,000 locations, is trying to upgrade its menu to lure higher-income customers who are less sensitive to pressures on consumer spending. But a new menu it launched last year, with items like a bruschetta burger, have failed to reverse a slide in same-store sales. Analysts have said that Applebee’s needs to remodel its dated-looking restaurants, something that could require significant spending.
The move comes as mid-priced sit-down restaurants are trying to pull themselves out of one of the industry’s worst slumps in several years. A second consecutive summer of high gasoline prices, coupled with declining home values, has eaten into the wallets of the middle-class customers on which Applebee’s built its dining empire.
IHOP is planning on selling all 500 company owned Applebee’s and other real estate in the hopes of cutting costs and to offset some of the debt they had to take on in order to purchase Applebee’s.
We love how Applebee’s is trying to appeal to “upscale” customers. The day we are not good enough to eat at Applebee’s is the day we move back in with out parents and give up at life.