8 Applebee’s restaurants close, franchisee files for bankruptcy

Eight Applebee’s locations in and around Kansas City, Kan., have closed, leaving just two in the market. According to the Kansas City Star, locations were abruptly closed in Kansas City, Mission, Overland Park, Raytown, Olathe, Lee’s Summit and Leavenworth.

The Blue Springs and Northland, Kan., locations remain open. All are operated by the same franchisee, Apple Central KC LLC, which filed for Chapter 11 bankruptcy protection in Kansas District this week.

In a statement, Applebee’s president Tony Moralejo told the Star that the decision to close was made by the franchisee and appears to be based on financial circumstances.

The franchisee has had a number of problems in the past. It was sued by its parent company in 2018 after it closed seven restaurants in the area without franchisor approval, the Star reports. One of these locations was permanently closed after two black women were falsely accused of not paying their bill. The women said they were racially profiled, and the manager and two other employees were quickly fired before the restaurant closed about a week later.

In 2022, a franchisee executive was terminated after he sent an email that went viral claiming the company could underpay its workers due to inflation, which would “increase application flow.”

The closings and bankruptcy come about two weeks after another Applebee’s franchisee — Louisiana Apple — filed for Chapter 11 protection. Louisiana Apple operates 14 locations in Kentucky, Oklahoma, Indiana and Arkansas, and its bankruptcy filing followed a lawsuit filed by one of its creditors, claiming the franchisee is owed approximately $8.3 million dating back to September 2020.

The bankruptcy filings by Apple Central KC and Louisiana Apple join a growing number of restaurant concepts — from Red Lobster and BurgerFi to franchisees Arby’s, Dickey’s and Pizza Hut — that have sought protection this year amid a challenging environment created of expensive debt and slowing down. sales and traffic. Especially there only 31 franchisees in the Applebee’s system of more than 1,500 units.

Applebee’s has spent the past two years closing underperforming stores and has been navigating negative same-store sales for just over a year. Tony Moralejo came in as president last year and implemented a new strategy to eventually return to net growth, including smaller, more cost-effective prototypes and a stronger focus on volume growth unit averages. The chain has also stepped up its promotional offerings and recently struck a deal with the NFL. Parent company Dine Brands will report third-quarter results on Nov. 6.

Contact Alicia Kelso at (email protected)