Under performing restaurants are gone and bad debt is nonexistent. What’s coming next for Applebee’s?
Beginning in 2020, the chain will start introducing server tablets across its footprint. The benefits of this includes ease of ordering, enhanced tips, and satisfaction and labor savings.
Tablets have generated revenue benefits, especially with beverages which are more likely to be entered.
Applebee’s believes tablets can meaningfully enhance the guest experience.
The chain also recently activated catering across its footprint, expecting a significant incremental sales layer—and one Applebee’s will begin leveraging aggressively next year.
Catering will target both residential for family get togethers and social occasions, and businesses.
In 2019 it closed roughly 200 low-volume stores. This coming year will bring a normalized closure rate of less than 1 percent of Applebee’s current base.
Dine Brands completed eight franchisee transactions over the past two years resulting in the exit of several underperforming operators while introducing new and deeply experienced franchisees to the Applebee’s system.
Dine Brands will seek high-performing new franchisees that are interested in growing with them.
Applebee’s has no material royalty or advertising delinquencies for the first time in three years. This is a significant development, one that ensures a far more stable and predictable income stream.
To-go currently represents about 70 percent of Applebee’s off-premises mix. Delivery makes up the balance. Roughly 65 percent of the brand’s off-premises orders are now placed digitally.
When looking at trends from 2017–2018, Applebee’s saw an improvement in margins, while cost of goods remained flat. Total operating expenses, including labor costs, decreased slightly for four-wall profits that start in the low double-digit margin range.
With respect to franchisee entity debt leverage, they have seen dramatic improvement since 2017.