- Applebee's will take control of 69 restaurants in North and South Carolina from franchisee Apple Gold Group, parent company Dine Brands International announced last week.
- The restaurants will be operated by Applebee's COO Kevin Carroll.
- Applebee's will own and operate these restaurants for now, but would consider re-franchising them down the line, according to the press release.
For the first time in three years, Applebee's will no longer be fully franchised, according to Nation's Restaurant News. Owning restaurants outright can create a financial incentive, and brands that own or operate over half of their locations averaged higher sales last year, per NRN.
For example, Chili's, which fully owns more restaurants than it franchises, posted an increase of 2% in same-store sales for company-owned restaurants compared to a 1.5% increase in U.S. same-store sales for franchised restaurants during the first quarter of fiscal year 2019.
Owning outright also can alleviate some of the headaches that franchisors have suffered of late with Jack in the Box and McDonald's struggling to keep franchisees happy. Applebee's also recently settled a months-long dispute with its second largest franchisee RMH Holdings, which declared bankruptcy in May, according to NRN.
Both quick-service and casual dining, where Applebee's operates, have been pinched by the upswing of fast casual. Still, Applebee's has had a strong year — posting a 5.5% increase in same-store sales in the U.S. for the first nine months of 2018, driven in part by an increase in off-premise sales.
It will be interesting to see how much of an impact these 69 stores will have on Applebee's same-store sales — especially now that sales are improving — and whether or not fully owning locations could become a trend for the struggling casual dining segment.
Correction: In a previous version of this article, the headline and story misidentified the operator of the 69 restaurants Applebee's purchased on Dec. 13. Applebee's bought the stores from Raleigh, North Carolina franchisee Apple Gold Group.