The parent company of Applebee’s and IHOP could close as many as 135 Applebee’s restaurants, and 25 IHOP restaurants this year due to poor sales, according to a statement released Thursday.
DineEquity’s interim CEO Richard J. Dahl said in the release that 2017 will be a “transitional year” for Applebee’s, adding, “we are making the necessary investments for overall long-term brand health and expect to see improvement over the next year.”
DineEquity noted that the numbers are revised expectations – the number of Applebee’s restaurants set to close is more than double what was previously expected. The number of expected IHOP closures is between two and seven more locations.
“IHOP remains on solid ground, despite soft sales this quarter,” Dahl said. “I am optimistic about the growth in both effective franchise restaurants and system-wide sales.”
Company officials said in the release that “the expected closures will be based on several criteria, including franchisee profitability, operational results and meeting our brand quality standards.”
The press release notes a 7 percent decline in sales for Applebee’s during the first six months of 2017.
Additionally, IHOP’s sales declined 2.6 percent for the second quarter of 2017. Applebee’s sales declined 6.2 percent for the second quarter of 2017.
The announcement boosted DineEquity’s stock 4 percent Thursday morning.