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Applebees, IHOP to close dozens of locations

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There could soon be fewer places to grab an app or order a stack of pancakes: Dine Equity, the company behind Applebee’s and IHOP, will close up to 160 locations of the chain restaurants this year in an attempt to trim costs and boost sales, according to a Consumerist report.

A list of closures has not yet been announced, leaving the future of Wausau-area locations unclear.

“We are long overdue in rationalizing the size of our system and closing poorly performing restaurants,” Dine Equity CEO Richard Dahl said in a call with investors. 

In March, Applebee’s said that it planned to close 40 to 60 locations in 2017, according to a Business Insider report. In 2016, Applebee’s closed 46 locations.

Executives blamed financial difficulties in part on Applebee’s attempt to win over millennial diners.

“Over the past few years, the brand’s set out to reposition or reinvent Applebee’s as a modern bar and grill in overt pursuit of a more youthful and affluent demographic with a more independent or even sophisticated dining mindset, including a clear pendulum swing towards millennials,” John Cywinski, Applebee’s brand president, said Thursday.

“In my perspective, this pursuit led to decisions that created confusion among core guests, as Applebee’s intentionally drifted from its what I’ll call its Middle America roots and its abundant value position,” he continued. “While we certainly hope to extend our reach, we can’t alienate Boomers or Gen-Xers in the process.”

In 2016, Applebee’s launched what it called a “comprehensive business transformation” in an attempt to modernize the chain. Changes such as installing fire grills in all 2,000-plus locations across the US — a $40 million investment by the chain’s franchisees — and redesigning locations were supposed to distinguish Applebee’s from other casual dining chains.

Moving foward, Cywinski said that Applebee’s will focus on “routine traditionalists” who actually enjoy casual dining chains and have favorite menu items, as well as “value seekers” who are looking for deals at sit-down restaurants.

Restaurants slated for closure are either in areas with declining traffic, such as restaurants near once bustling but now dead malls, or locations with low sales that offer customers a “substandard experience,” according to executives.

Cywinski said that the closures relate to two types of restaurants. First, those that are older and located where high traffic is no longer present. The second group consists of restaurants that are underperforming, or “brand-damaging.”

“In either case, these restaurants need to close and perhaps should have closed long ago,” he notes. “We’ve had too much restaurant variability across our system, as well as a rather high percentage of guests not satisfied with their experience.”

In other Dine Equity news, the company announced Thursday a new CEO: Stephen Joyce, the former CEO of Choice Hotels, will take the helm at the company after Julia Stewart resigned in February.

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