DineEquity Inc. said Monday it planned to sell 30 corporate Applebee's restaurants in the Washington, D.C, area as part of its ongoing refranchising plan.
Glendale, Calif.-based DineEquity said it entered into an asset purchase agreement with Potomac Family Dining Group for the 30 restaurants. The deal is expected to generate after-tax proceeds of about $27 million and to reduce sale-leaseback obligations associated with 10 properties by about $20 million.
The transaction is scheduled to close in the first quarter of 2011.
Potomac Family Dining Group was established earlier this year by investment banker Timothy George, who served as a financial adviser to DineEquity when it acquired the 2,000-unit Applebee’s Neighborhood Grill & Bar chain in 2007. The company said Nicolas Barquin, who served as a financial adviser to Potomac Family Dining Group, will serve as a consultant for the group.
Julia Stewart, DineEquity’s chairman and chief executive, described Potomac Family Dining Group as "an excellent franchise partner who is new to the Applebee’s system and possesses significant operating, development and financial capabilities."
DineEquity has sold 193 corporate Applebee’s locations since it acquired the casual-dining chain, including 63 units in Minnesota and Wisconsin in the fourth quarter of this year, as well as 20 in Virginia. The company also recently announced the sale of another 36 units in Missouri and Illinois in a deal expected to close in the first quarter 2011.
As of the Sept. 30-ended quarter, DineEquity’s 3,500 restaurants under the Applebee’s and IHOP brands were more than 88 percent franchised. The D.C.-area deal and others expected to close early next year will bring the franchise rate to 93 percent, the company said.
Contact Lisa Jennings at [email protected].