Applebee's is now an entirely franchised brand following the sale last week of the remaining 23 company-owned locations in the casual-dining chain’s headquarters of Kansas City, Mo.
Applebee’s parent DineEquity Inc., based in Glendale, Calif., confirmed Tuesday that control of the remaining company-owned locations shifted on July 23 to American Franchise Capital LLC, or AFC, a private fund established to make controlled investments. Terms were not disclosed.
Through two corporate entities, AFC now operates 56 Applebee’s, along with 28 Taco Bell restaurants, in eight states.
Officials at DineEquity, which is scheduled to report second-quarter earnings on Wednesday morning, disclosed in February that an opportunity to refranchise the remaining company-owned locations had presented itself, without going into detail.
Previously the 23 company units were used as a test market to experiment with new menu items and operational changes.
Kevin Mortesen, a DineEquity spokesman, said that now, as a 100-percent franchised system, “successful franchisees allow for excellent testing partnerships.”
DineEquity acquired Applebee’s in 2007 for $2.1 billion. At the time, the intention was to transform the casual-dining chain into a nearly all-franchised brand with an asset-light model, much like sister brand IHOP.
The sale of nearly 500 company-owned Applebee’s over the years also helped pay down the company’s considerable debt, which was refinanced last year.
At the same time, DineEquity has worked to revitalize both Applebee’s and IHOP. The company has also said it is looking for a third franchise brand to acquire, one that will likely be in the fast-casual space.
DineEquity still owns about 10 IHOP locations in Cincinnati and Mortesen said there are no current plans to sell those units.
DineEquity ended its first quarter with 2,015 Applebee’s and 1,649 IHOP units.