Applebee’s Closing More Than 100 Locations, IHOP To Shutter 25 Restaurants

Image courtesy of Mike Mozart/Wes Dickinson

There could soon be fewer places to grab an app or order a stack of pancakes: Dine Equity, the company behind Applebee’s and IHOP, will close up to 160 locations of the chain restaurants this year in an attempt to trim costs and boost sales.

Dine Equity announced the closures Thursday evening during its second quarter earning call, revamping previously modest closure plans for the chains.

At Applebee’s the company said it would close between 105 and 135 restaurants across the country. That figure is up from the estimated 40 to 60 locations previously slated for closure in 2017.

As for IHOP, Dine Equity announced that it would close between 20 and 25 locations, up from the 18 previously scheduled to shutter.

Aggressive Closures

“We are long overdue in rationalizing the size of our system and closing poorly performing restaurants,” Richard Dahl, interim CEO and chairman for Dine Equity, said during the call.

The company says that the “aggressive” closures are part of its plan to simplify operations, while elevating the guest experience.

Applebee’s president John Cywinski said that the closures relate to two types of restaurants. First, those that are older and located where high traffic is no longer present. The second group consists of restaurants that are underperforming, or “brand-damaging.”

“In either case, these restaurants need to close and perhaps should have closed long ago,” he notes. “We’ve had too much restaurant variability across our system, as well as a rather high percentage of guests not satisfied with their experience.”

By closing the restaurants, Dahl said Dine Equity is “investing in the empowerment of our brands.”

While closing 160 or so locations of the two chains might seem like a lot, it’s just a drop in the bucket for Dine Equity, which currently operates more than 3,700 restaurants, including 1,811 Applebee’s and 1,646 IHOP locations.

A list of closing restaurants has not yet been released. Dine Equity notes that closures will be determined based on franchisee profitability, operational results, and meeting brand quality standards.

Consumerist has reached out to Dine Equity for more information on a timeline for the closures and details on which locations will be affected. We’ll update this post if we hear back.

Declining Sales, New Leader

As for Dine Equity’s financial results, the company reported net income of $20.9 million for the second quarter of 2017, a drop from $26.4 million one year ago.

At Applebee’s, comparable same-restaurant sales declined 6.2% for the second quarter, while IHOP saw sales decline 2.6% during the same time. For all of 2107, Applebee’s sales declined 7%, while IHOP’s declined 2.1% overall.

In other Dine Equity news, the company announced Thursday a new CEO: Stephen Joyce, the former CEO of Choice Hotels, will take the helm at the company after Julia Stewart resigned in February.