Applebee's Is Closing Even More Locations Nationwide
Applebee's brands itself as a "Neighborhood Grill and Bar," but it seems to be making an appearance in fewer and fewer neighborhoods nowadays. Known for its appetizers, meal deals, and cocktails, the casual dining chain had grand plans for a turnaround in 2023 after closing hundreds of restaurants since 2017. But unfortunately, Applebee's now expects to end the year even worse off than it started.
Applebee's parent company Dine Brands anticipates that the chain will have between 10 and 20 fewer restaurants in its roster when 2023 comes to a close, Restaurant Business Magazine reported. This would be an even larger decrease in store count for Applebee's than in 2022, when it ended the year with nine fewer stores after closing 13 and opening four new locations.
Applebee's president Tony Moralejo said during an earnings call this week that the brand will open more restaurants in 2023 than it did in 2022. Still, he admitted "it's not where we want to be in the future."
To make matters worse, Moralejo said that the return on investment (ROI) on new Applebee's locations was low because of elevated construction and land acquisition costs, "hampering our ability to ignite new unit growth." ROI measures the value of an investment, such as building a new restaurant location, by comparing the profits it brings in with the cost of establishing it.
Moralejo said that his past experience with restaurant brands has shown that the pace of developing new restaurants ultimately comes down to franchisees believing "there's an attractive value proposition." Moving forward, Moralejo said that his top priority is to make sure that the chain's franchisees are successful. He plans to "work closely with franchisees to create new financially attractive development opportunities for the entire Applebee's system."
In the meantime, Applebee's is trying to continue drawing in budget-sensitive customers with promotions and deals. Last month, for example, it brought back a fan-favorite deal that allows customers to add a dozen Double Crunch Shrimp to any steak entrée for $1. And just in time for St. Patrick's Day, the chain also brought back its themed Saintly Sips cocktails, the Tipsy Leprechaun and Pot O' Gold Colada. This time around, the drinks will go for $6 rather than their $5 price tag from when they first debuted in 2022.
Applebee's was contacted for further comment on its anticipated drop in store count in 2023 but did not immediately respond.