Eight Applebee’s locations in and around Kansas City, Kan., have closed, leaving just two left in the market. According to the Kansas City Star, the locations were shuttered abruptly in Kansas City, Kan., Mission, Kan., Overland Park, Kan., Raytown, Mo., Olathe, Kan., Lee’s Summit, Mo., and Leavenworth, Kan.
Blue Springs and Northland, Mo., locations remain open. All are operated by the same franchisee, Apple Central KC LLC, which filed for Chapter 11 bankruptcy protection in the District of Kansas this week.
In a statement emailed to Nation's Restaurant News, Applebee’s president Tony Moralejo that the decision to close was made by the franchisee and appeared to be based on financial circumstances.
"Applebee's restaurants are independently owned and operated by the franchisees. The closure of eight restaurants in the Kansas City market look to be the result of financial circumstances and decisions made by the franchisee," he said. "This situation is unfortunate, and we continue to believe the Kansas City area isa great neighborhood for Applebee's restaurants. We are exploring options about the future of these restaurants."
Apple Central KC's bankruptcy filing shows that its total liabilities fall between $10 million and $50 million to between 200 and 999 creditors, while its assets are between $1 million and $10 million. Its list of creditors include state sales and liquor tax entities, real estate and development entities, and foodservice distributor Sysco, which it owes more than $339,000.
The franchisee has had a spate of issues in the past. It was sued by its parent company in 2018 after it closed seven area restaurants without the franchisor’s approval, the Star reports. One of those locations was shut down permanently after two black women were falsely accused of not paying their bill. The women said they were racially profiled, and the manager and two other employees were swiftly fired before the restaurant closed about a week later.
In 2022, an executive with the franchisee was terminated after he sent an email that went viral claiming the company could pay its workers less because of inflation, which would “increase application flow.”
The closures and bankruptcy come about two weeks after another Applebee’s franchisee — Louisiana Apple — filed for Chapter 11 protection. Louisiana Apple operates 14 locations in Kentucky, Oklahoma, Indiana, and Arkansas, and its bankruptcy filing followed a lawsuit issued by one of its creditors, claiming the franchisee owes about $8.3 million in debt dating back to September 2020.
The bankruptcy filings from Apple Central KC and Louisiana Apple join a growing number of restaurant concepts — from Red Lobster and BurgerFi to franchisees of Arby’s, Dickey’s, and Pizza Hut — that have sought protection this year amid a challenging environment created by expensive debt and slowing sales and traffic. Notably, there are just 31 franchisees in Applebee’s 1,500-plus-unit system.
Applebee’s has spent the past couple of years closing underperforming stores and has navigated negative same-store sales for a little over a year. Tony Moralejo came on board as president last year and has put a new strategy into place to eventually get back to net growth, including smaller, more cost-efficient prototypes and a sharpened focus on growing average unit volumes. The chain has also ramped up its promotional offerings and recently entered into an agreement with the NFL. Parent company Dine Brands will report third quarter results on Nov. 6.
Contact Alicia Kelso at [email protected]
