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Applebee's Is Shrinking & Closing Dozens of Restaurants This Year

The chain has closed hundreds of restaurants in recent years.

Applebee's has shuttered hundreds of locations over the past few yearsand sadly, the trend seems to be continuing in 2023.

The casual dining chain announced this week that it expects to end the year with 25 to 35 fewer restaurants than it had at the start. This will be an even bigger decrease than the 10 to 20 net closures that Applebee's initially expected to see in 2023. Applebee's net unit count hasn't taken such a major hit since 2020, when it ended the year with 67 fewer restaurants, according to Restaurant Business Magazine.

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Applebee's has been shrinking in size for years. The company has shuttered hundreds of locations in recent years to remove underperforming restaurants from its system and get back on the right track for growth.

After ending 2021 with just 1,578 restaurants in the United States, its lowest total in more than a decade, Applebee's was eyeing 2023 as the year when it would finally start growing again. However, higher development costs have slowed down new restaurant openings for the brand, while work is still underway to weed out the underperforming locations.

Applebee's president Tony Moralejo explained during an earnings call this week that the chain had to increase its projection for 2023 restaurant closures after a recent review identified additional locations that "are no longer in strong markets." Moralejo attributed the extra closures to factors like changing consumer behaviors after the COVID-19 pandemic. He also said that in some cases, Applebee's franchisees have been unable to renew their leases.

Moralejo wouldn't speculate about whether Applebee's can expect to see further closures next year, but did note that the company will "work closely with our franchisees to help identify closures and make sure that we always leverage our collective expertise and our knowledge to set them up for long-term financial success."

Moralejo also said that shuttering those underperforming restaurants will open doors for new restaurant openings in the future.

"Closing these underperforming restaurants opens up new trade areas. It opens up opportunities for growth especially when you consider our broader development strategy. Our new vice president of development is working closely with franchisees to take advantage of these opportunities."

Zoe Strozewski
Zoe Strozewski is a News Writer for Eat This, Not That! A Chicago native who now lives in New Jersey, she graduated from Kean University in 2020 with a bachelor’s degree in journalism. Read more about Zoe