Applebee’s Forced to Close 35 More Locations Across US in 2024
The popular American restaurant chain Applebee’s has announced plans to close over 30 locations across the states in the coming year.
The news comes after a challenging year for the chain, which closed 46 locations in 2023 due to significant underperformance last year.
Applebee's Feels the Effects of a Turbulent Economy
Applebee’s has been a popular restaurant chain for several decades. It started as a small location in 1980. In 1986, Abe Gustin and John Hamra franchised it, and just three years later, 100 restaurants were spread across the states.
![An image of a woman seated at a desk working on finances](https://images.savvydime.com/2024/05/91eaea75-img9.jpg)
Source: Freepik
However, like many franchises and restaurants, Applebee’s has been greatly affected by the turbulent economy of recent years.
Applebee's Announce Closures
Due to underperformance, Applebee’s has announced they plan to close around 35 locations across the U.S. this year, which showcases how difficult the past few years have been for the grill chain.
![Store closed sign hangs on the front door of a building](https://images.savvydime.com/2024/05/a1f56f3a-img12.jpg)
Source: Freepik
Many were not surprised to hear that the chain will close more locations after shutting down 46 locations in 2023.
Dine Brands Global
Dine Brands Global, the parent company of Applebee’s and IHOP, has experienced a significant revenue decline in recent years. The company’s stock is down 30% this year alone.
![A photograph taken of the exterior of an IHOP restaurant](https://images.savvydime.com/2024/05/d584035d-img16.jpg)
Source: Wikimedia
According to The Daily Mail, Dine’s sales at all its restaurants dropped to around $206 million during this year’s first quarter.
Three Locations Already Close in 2024
According to a statement from Applebee’s president, Tony Moralejo, the restaurant has already closed three locations this year and plans to close many more.
![An image of a closed sign hanging on a door](https://images.savvydime.com/2024/05/8e1c9d6f-img20.jpg)
Source: Freepik
Moralejo said that the decision to close was “an incredibly difficult decision” and a “last resort” for the company.
Not All Bad News for Dine Brands Global
During a fourth-quarter earnings call several months ago, Moralejo revealed, “We’re expecting 25 to 35 net fewer domestic Applebee’s restaurants.”
![A photograph of an IHOP restaurant](https://images.savvydime.com/2024/05/26090725-img24.jpg)
Source: Wikimedia
However, it’s not all bad news for the restaurant chain, as the president confirmed they also plan to open around 25 new IHOP restaurants.
New Development Strategy in Place
Speaking on future prospects for Applebee’s and Dine Brands Global, Moralejo explains that the company has new plans in place to continue its growth.
![A photograph of several people gathered around a table](https://images.savvydime.com/2024/05/8afe09c3-img27.jpg)
Source: Freepik
“With our new development strategy in place, we feel confident in our ability to continue to open up new restaurants and scale the footprint of our brands over time.”
Hudson Location Has Been Struggling
Unfortunately, one location in Hudson, over 100 miles north of New York City, will be included in the recent string of closures. The Applebee’s here will officially close its doors for good in mid-May.
![A photograph of a busy street in Hudson, New York](https://images.savvydime.com/2024/05/3d68dfc8-img30.jpg)
Source: Freepik
“We greatly appreciate our neighbors’ patronage for the past 15 years and have loved being a part of this neighborhood,” a spokesperson for the local franchise said.
Applebee’s Employees Offered Another Job
Many of the workers from the Judson location have been offered employment at another Applebee’s.
![An image of a restaurant server taking a customer order](https://images.savvydime.com/2024/05/7cf72546-img34.jpg)
Source: Freepik
“We hope to see you at our neighboring restaurants throughout the Albany and Hudson Valley markets,” the spokesperson added.
A String of Closures Began in 2017
Applebee’s struggles appear to have peaked in 2017, a year in which the franchise closed over 100 restaurants.
![A photograph of a large Applebee’s logo outside of a restaurant](https://images.savvydime.com/2024/05/110ab586-img5.jpg)
Source: Scott Olson/Getty Images
Since 2017, Applebee’s has experienced a steady flow of closures across the U.S. in regions that appear to struggle with trade, Moralejo says.
Regions Struggling to Trade
“I’ll add that these closures aren’t a sign of struggling franchisees. They’re offering a sign of struggling trade areas,” Moralejo said.
![An image of a man drinking a beer in a quiet restaurant](https://images.savvydime.com/2024/05/624e9f0e-img41.jpg)
Source: Freepik
“And I can assure you that our leadership team, we’re pulling every lever we have to offset the downside of closings.
Closures Are Only Natural, Says Applebee’s President
Speaking with TODAY, Moralejo explained that Applebee’s is a well-established franchise, and it is only natural that specific locations will eventually lose favor with the surrounding residents.
![A portrait of Applebee’s President Tony Moralejo](https://images.savvydime.com/2024/05/5c40b274-img45.jpg)
Source: Wikimedia
“Applebee’s is a mature brand, and it is natural to have closures with changing trade areas and franchisee agreement expiration,” he said.
Brand Evolution
Applebee’s has a rich history, evolving from a single location in 1980 to a nationwide chain. Over the years, it has navigated various challenges and market shifts.
![A sign for an Applebee's in the city skyline.](https://images.savvydime.com/2024/05/2840318e-applebees-sign-nelson-ndongala-vyaafpela5g-unsplash.jpg)
Source: Nelson Ndongala/Unsplash
Despite recent struggles, the brand’s ability to adapt will determine its future success.
Impact on Local Economies
The closure of 35 more Applebee’s locations will undoubtedly impact local economies.
![Black and White License Plate](https://images.savvydime.com/2024/04/2cf8ceea-black-and-white-license-plate.jpeg)
Source: lil artsy/Pexels
Communities will face job losses, decreased foot traffic to nearby businesses, and reduced tax revenues. This trend mirrors a broader economic struggle affecting many regions.
Shifts in Consumer Dining Preferences
Consumer dining preferences have shifted dramatically in recent years. The rise of fast-casual dining, the convenience of food delivery services, and the demand for healthier, locally-sourced options have left traditional sit-down chains like Applebee’s struggling to keep up.
![A woman looks over the menu in the outdoor section of a restaurant while drinking a lemonade](https://images.savvydime.com/2024/05/660b33ab-img18.jpg)
Source: Freepik
These trends highlight the importance of adapting to evolving customer expectations to remain competitive.
The Role of Digital Transformation
Digital transformation is crucial in the modern restaurant industry. While some chains have successfully integrated online ordering, mobile apps, and digital marketing, others lag behind.
![A delivery cyclist wearing a helmet and a black jacket with an Uber Eats insulated backpack is waiting at a crosswalk](https://images.savvydime.com/2024/03/ff8f7b88-untitled-design-29.jpg)
Source: Mak/Unsplash
Applebee’s has faced challenges in this area, impacting its ability to attract tech-savvy customers and streamline operations. Embracing digital innovation is essential for survival in a rapidly changing market.
Competitive Landscape
The competitive landscape for casual dining chains is intense. While Applebee’s faces closures, other chains like Olive Garden are implementing innovative strategies to stay afloat.
![The exterior front entrance of the Olive Garden in the Fair Lakes Shopping Center in Fair Lakes, Fairfax County, Virginia during the evening.](https://images.savvydime.com/2024/05/9973dad2-2021-08-18_19_54_47_the_exterior_front_entrance_of_the_olive_garden_in_the_fair_lakes_shopping_center_in_fair_lakes_fairfax_county_virginia_during_the_evening.jpg)
Wikipedia, Creative Commons
These competitors are focusing on menu diversification, enhanced customer experiences, and aggressive marketing campaigns. Understanding these tactics can offer insights into potential paths for Applebee’s revitalization.
Impact of Rising Costs
Rising operational costs are a major factor in Applebee’s closures. Increasing food prices, labor costs, and real estate expenses have strained the chain’s profitability.
![An image of a man whos holding a small red arrow above a graph of figures](https://images.savvydime.com/2024/04/2e1bf3f7-1-8.jpg)
Source: Freepik
This financial pressure is a common issue across the industry, forcing many restaurants to reevaluate their business models and cost structures to stay viable in a competitive market.
Red Lobster Bankruptcy
Applebee’s isn’t alone in its struggles. Red Lobster recently filed for bankruptcy, highlighting the broader challenges in the casual dining sector. Economic pressures and shifting consumer preferences have taken a toll.
![A photograph of the Red Lobster Restaurant in the Cross County Shopping Center, Yonkers, NY. It is a red brick building with white accents.](https://images.savvydime.com/2024/05/94ffde54-red_lobster_restaurant_yonkers_ny_october_2012.jpg)
Wikipedia, Creative Commons
The company plans to restructure and streamline operations to regain stability, but the situation underscores the difficulties facing many established restaurant chains today.
Foster's Freeze Closure
California’s beloved Foster’s Freeze announced its closure, citing economic hardships and changing market dynamics. Known for its classic American fare, the closure marks the end of an era for many loyal customers.
![A hand is holding a paper cup with the logo of Foster's Freeze, filled with a swirl of soft-serve vanilla ice cream topped with a dollop of whipped cream and a drizzle of caramel](https://images.savvydime.com/2024/04/e0eef2dc-untitled-design-34.jpg)
Source: Fosters Freeze/Facebook
The company expressed gratitude for decades of support and hopes to leave behind cherished memories for the community.
Burger King Kiosks
Burger King has faced layoffs due to the introduction of self-service kiosks. This shift towards automation aims to reduce costs and enhance customer service efficiency.
![Inside a Burger King restaurant, customer feedback kiosks with colorful screens display positive messages from patrons](https://images.savvydime.com/2024/04/4c878583-untitled-design-31.jpg)
Source: Burger King/Facebook
However, it has resulted in job losses and concerns about the impact on the workforce. The company continues to try and balance innovation with employee relations.
Taco Bell Price Increases
Taco Bell has implemented price increases in response to rising ingredient and operational costs. While the chain remains popular, these changes have sparked discussions about affordability and value.
![A Taco Bell location seen in the daytime in California.](https://images.savvydime.com/2024/04/8f05cdfe-img24.jpg)
Source: TaurusEmerald/Wikimedia Commons
Customers are adjusting to higher prices, and Taco Bell is exploring ways to maintain its appeal amidst economic challenges.
Brocato’s Sandwich Shop Bankruptcy
Brocato’s Sandwich Shop, a local favorite, recently declared bankruptcy. The small business struggled to cope with economic pressures and competition from larger chains.
![Brocatos exterior patio](https://images.savvydime.com/2024/05/af80b923-brocatos.jpg)
Source: chowjudge/TripAdvisor
Loyal patrons expressed their sadness, and the owners thanked the community for years of support, marking the end of a cherished local establishment.
Future of Casual Dining
The future of casual dining is uncertain. Industry experts predict a continued shift towards fast-casual and delivery-focused models. For traditional chains like Applebee’s, innovation and adaptation are crucial.
![A woman in a floral blouse sitting at a table in a sunlit restaurant, looking at a menu while a waiter takes her order](https://images.savvydime.com/2024/05/40f08648-untitled-design-36.jpg)
Source: Fraser Cottrel/Unsplash
Developing new concepts, revamping menus, and leveraging technology can help these restaurants remain relevant and attract a new generation of diners.