Applebee’s Closes 8 Locations in Same State Following Franchisee Bankruptcy Filing

According to The Sun, Eight Applebee’s locations are set to close after their franchisee, Apple Central KC, filed for Chapter 11 bankruptcy protection in Kansas this week. According to Applebee’s President Tony Moralejo, the decision to shut down these restaurants stemmed from ongoing financial struggles faced by the franchisee.

Locations Affected by the Closures

The affected locations include Applebee’s branches in Kansas City, Mission, Overland Park, Raytown, Olathe, Lee’s Summit, and Leavenworth. However, Applebee’s locations in Blue Springs and Northland, Kansas, remain open for the time being.

History of Financial Challenges

This is not Apple Central KC’s first struggle. The franchisee previously encountered issues in 2018 when it closed seven local restaurants without approval from its parent company, Dine Brands. One of these closures followed a highly publicized incident involving racial profiling, in which two Black women were wrongfully accused of skipping out on their bill. The incident led to the firing of three employees.

In 2022, a franchise executive gained viral attention for a controversial email that suggested inflation could be used to reduce wages, prompting the executive’s dismissal. These incidents have highlighted ongoing management challenges within Apple Central KC.

Additional Closures Across the Franchise

These closures come only two weeks after another Applebee’s franchisee, Louisiana Apple, also filed for bankruptcy. This franchisee, which operates in states including Kentucky, Oklahoma, Indiana, and Arkansas, reportedly has $8.3 million in debt.

In recent months, other Applebee’s locations have closed, including a branch in Hudson, New York, in May, and another long-standing location in Antioch, California, earlier this year. Dine Brands, Applebee’s parent company, previously indicated that there would be a range of closures in 2024, potentially leading to a net loss of 25 to 35 restaurants across the franchise.

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Applebee’s Strategy for a Turnaround

Applebee’s President Tony Moralejo, who joined the company last year, has been focused on turning the brand around through a strategy that includes smaller, more cost-effective locations and partnerships, such as a recent collaboration with the NFL. However, the closures of these struggling locations were deemed necessary to address ongoing financial difficulties.

Nationwide Restaurant Closures Reflect Industry Trends

Applebee’s is not alone in its struggles, as several other major restaurant chains have faced closures amid financial pressures. TGI Fridays, MOD Pizza, Boston Market, Red Lobster, and Tijuana Flats have all announced shutdowns in various locations. Rising inflation, shifts in consumer behavior, cost-cutting measures, and underperforming stores have been cited as common reasons for the closures.

In February, Bloomin’ Brands, the parent company of Outback Steakhouse, also revealed plans to close 41 locations across its portfolio. The challenges faced by Applebee’s and other chains reflect broader trends in the restaurant industry, where chains are reevaluating operations to adapt to current market conditions.