Dine Brands Looks To Close Multiple IHOP and Applebee's Restaurants
With a hard look at its finances, the IHOP family restaurant chain will close nearly 100 restaurants in the next six months. Its casual dining sister brand, Applebee's Neighborhood Grilled, will shut down 15 stores permanently.
The next round of closures will come on the heels of 20 U.S. Applebee's and 16 U.S. IHOP restaurants closed in the third quarter.
Dine Brands, while making its financial results public, failed to mention how many IHOPs were significantly underperforming and would close for good. Suspicious mount that the number could be less than 100. Same-store sales for the pancake chain dropped 30 percent for three months, but the week ending Sept. 27 saw a 23.5 percent drop.
In a statement from a Dine Brands spokesperson, the company believes it will close under 100 underperforming restaurants sometime in the next six months. However, the optimism will be that sales numbers will continue to improve and are seeing some improvement in the off-premise business.
Closures are a normal part of business, especially for a company Dine Brands' size. They can occur for a multitude of reasons, such as a restaurant located in a lapsed trade area where traffic was once active or expiring leases.
The pandemic has taken a toll on the family dining restaurant. The breakfast daypart has had problems coping and adapting with takeout and delivery dominating the market during this time. On top of that, the late-night business IHOP and other restaurants offer have also suffered from bars closed and events canceled. The sales challenge has led to the bankruptcy of a 49-unit IHOP operator back in May.
Applebee's had a 13.3 percent drop in the third quarter before a 0.4 percent positive climb last week.
Dine Brands had a 58.2 percent drop in net income of $10 million in the last quarter.