Franchisee Bankruptcy Leads to Closure of 8 Applebee’s Locations in One State

According to The Sun, Eight Applebee’s locations will be closing after their franchisee, Apple Central KC, filed for Chapter 11 bankruptcy in the District of Kansas this week. Applebee’s President Tony Moralejo confirmed that the closures were due to ongoing financial difficulties faced by the franchisee.

Affected Locations

The closures will impact several branches in Kansas City, Mission, Overland Park, Raytown, Olathe, Lee’s Summit, and Leavenworth. However, the Blue Springs and Northland locations in Kansas will remain open for now.

Applebee’s Ongoing Challenges

This is not the first time Apple Central KC has experienced issues. In 2018, the franchisee closed seven restaurants without approval from the corporate office. One of these closures followed an incident involving racial profiling, in which two Black women were wrongly accused of skipping a bill, leading to the termination of three employees. More recently, a franchise executive was dismissed after an email that circulated in 2022 suggested inflation could be used as an opportunity to cut wages, which sparked further controversy for the franchise.

Additional Franchisee Closures

The latest closures follow another recent Applebee’s bankruptcy case. Two weeks ago, the Louisiana Apple franchise, which operates locations in Kentucky, Oklahoma, Indiana, and Arkansas, filed for bankruptcy with $8.3 million in debt. Earlier in 2024, locations in Hudson, New York, and Antioch, California, also closed, marking an end to over 25 years of business in Antioch. Applebee’s parent company, Dine Brands, has projected that it may close between 25 to 35 restaurants by the end of the year.

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Turnaround Strategy in Place

Applebee’s President Tony Moralejo, who assumed the role last year, has been steering the brand toward a turnaround strategy focused on smaller, cost-effective locations and promotional partnerships, including a recent collaboration with the NFL. However, financial pressures proved insurmountable for the closing branches.

Broader Industry Challenges

Applebee’s is not the only restaurant chain affected by recent financial challenges. Other well-known chains, including TGI Fridays, MOD Pizza, Boston Market, Red Lobster, and Tijuana Flats, have closed locations in response to inflation, changing consumer habits, and cost-cutting pressures. In February, Bloomin’ Brands, the parent company of Outback Steakhouse, announced plans to close 41 restaurants across its portfolio.