In all, Glendale, Calif.-based Dine Equity plans to close up to 135 Applebee’s restaurants and about 25 IHOP locations. “They want this to be a go-to place for Americans on a Friday or Saturday night - maybe not in urban markets where you’ve got a lot of restaurants and higher incomes, but certainly in many parts of the country.” “They’re going back to the roots of their business, which is Middle America,” said Brian Vaccaro, an analyst for Raymond James. Even IHOP, which has traditionally been a source of stability for the company, has seen sales slip in recent quarters. (“We wouldn’t want to tip off our competitors,” he said.)Īpplebee’s is also assessing “whether the brand truly gets credit for hand-cutting steaks in the restaurant and whether we should continue with this approach,” Cywinski said.Īnalysts said these changes are part of a broader turnaround effort at Dine Equity’s 3,700 locations, all of which are franchised. And it is bringing back old favorites, Lenow said, though he declined to say what those were. Now the company is taking items off the menu, including a turkey sandwich with sriracha chile lime sauce and a pork-ham-bacon sandwich. “That left some of our fans shaking their heads, asking ‘What happened to Applebee’s?’”
“I think, in retrospect, we may have tried too hard to attract new guests,” he said.
Longtime regulars balked at new menu items and modern decor, said Patrick Lenow, a spokesman for DineEquity. Those efforts, he said, included “a clear pendulum swing toward millennials.”īut that turned out to be a bad idea. “Over the past few years, the brand’s set out to reinvent Applebee’s as a modern bar and grill in overt pursuit of a more youthful and affluent demographic,” John Cywinski, president of Applebee’s said in a call with analysts this week. The chain’s parent company, DineEquity, is also bringing on a new chief executive and closing up to 160 Applebee’s and IHOP locations in a bid to boost profits. It’s bringing back all-you-can-eat specials and doubling down on discounts like its “2 for 20” menu. Applebee’s says it’s made a mistake: It’s been trying too hard to be cool.Īfter years of working to brand itself as a modern millennial hangout, the family-friendly chain is reversing course.
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