Applebee’s parent company DineEquity Inc. said Thursday it has signed an agreement to sell 17 corporate restaurants across six states in the mid-South to franchisee Apple Investors Group LLC.
The transaction, which includes locations in Tennessee, Illinois, Mississippi, Missouri, Kentucky and Arkansas, is expected to net proceeds after taxes of about $15.9 million, and reduce DineEquity’s sale-leaseback-related financing obligations by $11.3 million, the company said.
Once closed, as expected in the first quarter of 2012, the Applebee’s Neighborhood Grill & Bar brand will have reached its goal of becoming 95-percent franchise owned, the company said.
Julia Stewart, chair and chief executive of Glendale, Calif.-based DineEquity, said the deal is the company’s third with Apple Investors Group, which is owned by Anand “Andy” Patel.
“DineEquity’s business fundamentals remain strong as we continue moving closer towards achieving our long-term strategic goal of becoming a predominantly franchised system,” Stewart said in a statement.
To date, DineEquity has sold 259 Applebee’s locations since the brand was acquired in 2007. DineEquity is also parent to the IHOP family-dining brand.
In November, DineEquity plans to close a transaction to sell 66 Applebee’s in New England to another franchisee, Apple American Group LLC.
Apple Investors Group currently owns and operates 27 Applebee’s in New Mexico and Virginia. Patel is also principal owner of a multi-brand franchise operation that includes 18 IHOP locations, four Stevi B’s restaurants and two hotels in Florida.
At the end of the second quarter, DineEquity operated 244 Applebee’s and franchised another 1,767, for a total of 2,011. The 1,512-unit IHOP chain is almost totally franchised.