America has new favorite grills and bar chains.
According to Technomic, Chile has surpassed Applebee for the first time in regards to system-wide sales in 2024.
Data from the restaurant tracker shows Chilean sales increased from around $3.6 billion to $4.6 billion between 2021 and 2024, while Applebee’s $4.1 billion US sales remained pretty flat over that same period.
In the recently reported fiscal quarter, Chile saw sales at the same store at 31%, while sales at the same store in the country fell 2.2%. The first quarter of 2025 was Applebee’s eighth consecutive quarter decline.
“Looking at the long-term historic performance of the brand and its future potential, the stock at this point is not anticipating what we think is the foundation of the company and the growth potential,” said John Peyton, CEO of Dine Brands, Applebee’s parent company.
Dine Brands The stock has fallen by about 40% over the past year.
“Bringing back to sales in the same store can be a huge catalyst for stocks,” said Eric Gonzalez, senior restaurant analyst at KeyBanc Capital Markets.
The Dine brand, which also owns IHOP, is considered a “asset light business” as almost all restaurants are franchised.
“Investors tend to prefer the asset light business because of very little income volatility,” Gonzalez said. “So, the Asset Lite model works in public companies, but from a Dine brand perspective, there’s not much attention given to it because there aren’t many full-service franchise businesses that compare it.”
Unlike Applebee, Chilean restaurants are almost entirely owned by the company. This made the parent company easier. Brinker Internationalquickly implement system-wide turnaround initiatives. In 2024, it increased its labour spending by 34% and it increased its expenditure on restaurant expenses, including advertising, maintenance and repairs by 28%.
“The franchisee model is great when it comes to financial engineering. This allows the company to get very low funding. It allows franchisees to securitize revenues. But the downside is that there is no operational control.”
Dine Brands is working to get back to growth. The company said it plans to remodel all locations over the next three years. It offers economic incentives to franchisees who are early adopters of its remodeling initiative.
“We have the contractual ability to force things,” Payton said. “But when it comes to renovations, I think the best thing we can do is demonstrate that a refreshed restaurant makes more money. So, since we’re renovating 30 this year, we spent so much money on our franchisees and renovated it.
Dine Brands also offers a combination restaurant of IHOP and Applebee. The first US location opened in Seguin, Texas in February.
“IHOP’s sales were $2 million a year, but now runs at a rate of $6 million a year, adding Applebee.
Dine Brands cut roughly $1 million from the cost of building a new restaurant to encourage franchisees to open new locations.
“The traffic was softer than we would have hoped for in 2024. That’s very excited about where the future holds us,” said Tim Doherty of Applebee’s franchisee Doherty Enterprises. “We understand that and really believe that it will be successful in the long term.”
Watch the video to learn more about what Applebee is doing to turn things around.
