IHOP to Close Almost 100 U.S. Locations Due to Financial Struggles amid Coronavirus Pandemic
The closures will occur over the next six months
Dine Brands Inc., which is the parent company of IHOP and Applebee's, announced on Thursday that almost 100 locations of the pancake chain will close across the U.S. over the next six months. The breakfast chain currently operates 1,683 restaurants, and 35 have shuttered so far in 2020.
"We're confident we will eventually replace these severely under-performing restaurants with better performing restaurants," Jay Johns, IHOP's president said on a call with investors on Wednesday according to Business Insider.
The pandemic previously forced many IHOP locations to close earlier this year, but since mandates have become more relaxed, a majority have reopened. Business Insider also reported at the end of September that 167 locations were operating as takeout only, while 91 have remained closed. It was also reported that sales at underperforming locations were down by 23.5% in the third quarter.
"These closures will allow us to remain focused on continuing to close the gap on sales, as well as focus on key priorities including expanding off-premise, ensuring restaurant safety and providing compelling value and innovation," a representative for Dine Brands Inc. said in a statement.
Earlier this year, CFRA Holdings, a franchisee operating 49 IHOP locations, filed for bankruptcy in May and cited the coronavirus as the primary reason, according to FSR Magazine. All employees working at the closing locations were paid and laid off prior to the bankruptcy filing, the outlet reported.
Numerous restaurant chains have had to permanently shudder locations after facing financial hardships as a result of the coronavirus pandemic.
In early July, NPC International, Pizza Hut's biggest franchisee that accounts for 20% of all the locations in the U.S., filed for bankruptcy, Restaurant Business Online reported. The company just announced that up to 300 Pizza Hut locations will be closing, while their remaining 927 locations they franchise will be sold.
McDonald’s is also closing 200 U.S. locations for good. The closings come as the fast food giant reported its lowest quarterly profits in 13 years, according to the Financial Times.