Applebee’s and IHOP in BIG Trouble; Closing 160 Restaurants

Applebees and IHOP in BIG Trouble Closing 160 Restaurants

Applebee’s and IHOP are icons of American dining, but they may be about to become a whole less common.

USA Today reports that DineEquity, the parent company of both restaurants, is slated to close as many as 105 to 135 Applebee’s locations and 20 to 25 IHOP locations. It is also opening 125 new locations for both restaurants, but they will be distributed globally.

The casual-dining segment, where both chains are positioned, is experiencing increased troubles as more customers have gravitated to the quick-service restaurants like Panera Bread or Chipotle Mexican Grill, many of which market themselves as offering healthier and more upscale food.

Analysts say Applebee’s, in particular, has had a hard time.

Applebee’s “remains out-of-favor with casual-dining consumers….Sister concept IHOP may be feeling the effects of DineEquity’s struggles as well,” said Instinet analyst Mark Kalinowski in a report released Friday.

But DineEquity officials say the painful job of closing restaurants will help in the long run.

“We are investing in the empowerment of our brands by improving overall franchisee financial health, closing underperforming restaurants and enhancing the supply chain,” interim CEO Richard Dahl said in a statement.

He said Applebee’s is in the middle if a “transitional year” and is “making the necessary investments for overall long-term brand health.”

The exact locations on the chopping block aren’t yet known, though interestingly the new Applebee’s spots will be mostly overseas, whereas the new IHOPs will be mostly in the United States. Both saw a decline in 2017’s second quarter, though Applebee’s 6.2% was notably worse than IHOP’s 2.6%.

“IHOP remains on solid ground, despite soft sales this quarter,” interim CEO Richard Dahl said in a statement meant to reassure the public. “I am optimistic about the growth in both effective franchise restaurants and systemwide sales.”

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What do you think of these restaurants? Would losing them be bad news for your family, or do you prefer other eateries? Let us know in the comments!