Peyton said Applebee plans to close less than 1% of its portfolio next year. The chain has made deals with a number of franchisees to build more than 15 restaurants in the short term, some being traditional and others being conversions.
He described the operators as having a “high level of enthusiasm” and he expects growth to accelerate in the future.
“We’ve been building this and putting the system in place for this new level of growth and this very modest shutdown rate for quite a while; the pandemic prevented us from activating it, ”Peyton said. “But we are ready now and moving forward from next year.”
The enthusiasm Peyton referred to is best exemplified by Sun Holdings, a major franchisee that recently acquired 131 Applebee in 14 states, becoming the brand’s second-largest operator. The company certainly has the resources and the scale to push for development; it operates over 1,000 locations in over a dozen states, including Taco Bueno, Burger King, Arby’s, McAlister’s, IHOP, Popeyes, T-Mobile, GNC and a number of airport restaurants.
“We are impressed with Applebee’s return and double-digit growth in same-store sales in the first quarter,” Guillermo Perales, president and CEO of Sun Holdings, said in a statement. Their long-term performance, combined with a plan for continued growth, not only strengthened Applebee’s leadership position, but also prepared the brand for an expanded leadership role in the segment.
“We see huge opportunities in this premium brand, supported by an innovative culture and a very attractive economy,” he continued. “This vertical significantly expands Sun Holdings’ infrastructure and its potential for future growth and expansion opportunities.”
READ MORE: IHOP unveils multi-faceted transformation strategy
For IHOP, development will become more strategic, said President Jay Johns. The executive explained that it will be less about hitting numbers and more about how the chain completes market planning for existing and new territories. Historically, IHOP has developed around 40 units per year, but the plan is to increase that number to 80 by 2023.
In August, Johns revealed a four-platform growth strategy of traditional units, non-traditional stores, a smaller prototype that will begin testing later this year, and the rollout of the fast-paced, casual spin-off Flip ‘. d by IHOP.
The company has already made progress on more than one of these fronts. Earlier this year, IHOP announced that it had signed an agreement with investment firm K2 Group to open at least five non-traditional restaurants across Ontario, Canada, over the next five years. The first will be a road stop at the beginning of 2022.
Additionally, in September, the first Flip’d by IHOP outlet opened in Lawrence, Kansas, after plans for the first casual were initially unveiled in late 2019. The next location is slated to open in New York City in the “Very near future,” Johns said. The initial strategy focused on metropolitan cities, but there are now plans to launch the concept in suburban areas and non-traditional places as well.