Times are certainly changing as business owners are becoming more set on catering to millennials. Those who were born between the mid-eighties and the mid-nineties are more likely to dine at restaurants that offer healthy and ethnic options instead of the classic burger and fries offered at the majority of well-known chain restaurants. It is for this reason that 60 to 80 Applebee’s Neighborhood Grill & Bar and 30 to 40 more IHOP restaurants will be closed.
The goal is simple: fewer conventional comfort-food restaurants and more fast-casual ethnic or health-focused restaurants. This is what millennials are driven to and it’s what the restaurants’ parent company, Dine Brands Global is looking to acquire. They have even taken it a step further and changed their name to DineEquity, hoping to broaden the scope of the mission.
The Glendale, California based business is hoping to fine-tune both of its brands which is why it will close some of the Applebee’s and IHOP locations while opening others. The company has declined to release a list of the changes, however; they did share that Applebee’s will open 10 to 15 new locations and IHOP will open 55 to 70 new locations.
“Dine Brands plans to spend as much as $100 million on its first acquisition near the end of 2018 or in early 2019,” CEO Stephen Joyce said.
The chains it’s considering have 100 or fewer locations. In addition to the location changes, the company is hoping to include the use of technology and analytics to enhance the customer experience and up the number of customer visits and check size.
The company reported fourth-quarter net income of $13.1 million with adjusted earnings per diluted share of 74 cents on total revenues of close to $148.8 million. It’s obvious that things have changed drastically for the chains, as the net income for the same period the previous year was $24.5 million with EPS of $1.37 on total revenues of $154.1 million.
Dine Brands beat Thomson Reuters I/B/E/S expectations of net income of $12.2 million, EPS of 69 and revenues of $148 million.
Commenters shared their opinions on whether or not this is the right move for the parent company…
“I think IHOP should close in most states due to the horrible service and quality of food.”
“We visited an IHOP near the Pittsburgh airport twice and it was great – perfect service, fast kitchen, really a very good experience all the way around. The next time we were in the area, they were permanently closed. More recently, we visited the new one in Erie – multiple problems with food, poor service, will not return – and somehow they remain open.”
“An IHOP at an airport would be great. Some place that serves breakfast food for passengers now that food is limited and costly on the planes. Loved Applebees but the quality of food at the one in Hawaii is not up to the quality of the ones I have eaten at on the mainland.”
The parent company is definitely on the right track when it comes to providing restaurants that provide healthier and more ethnic options considering millennials are more health conscious than generations before and allowing for diversity is something that will only become more popular.