We are amidst a restaurant recession and our favorite chains are taking a hard hit. It wasn't long ago that Starbucks announced it will be shuttering its Teavana stores and prior to that Ruby Tuesday, Subway, Outback Steakhouse and Papa Murphy's had already closed dozens of their restaurants.
According to Clark.com, the big restaurants are struggling because diner preferences have changed over the years and they now favor independently-owned restaurants, meal delivery services and fast-casual chains like Chipotle, which offer healthier options and better service.
By 2020, local eateries are predicted to grow by 5% while the big names are only expected to only see 3% growth. Unfortunately, even the most popular classic chain restaurants are not safe from loss of profit.
This week, DineEquity, the parent company that owns Applebee's and IHOP, announced that after months of financial hardships it will be shutting down more than 100 stores by the end of the year.
But don't despair just yet, click on the next page to read about the upside to this entire ordeal.
DineEquity released a statement on Thursday to address the closures, but unlike many of their competitors that close stores simply to cut back on costs, the parent company is actually taking this opportunity to improve their businesses. Once sales start to rise up, the company plans to open 125 new locations globally.
"We are investing in the empowerment of our brands by improving overall franchisee financial health, closing underperforming restaurants and enhancing the supply chain," interim CEO Richard Dahl said in a statement. "We believe 2017 will be a transitional year for Applebee's, and we are making the necessary investments for overall long-term brand health and expect to see improvement over the next year."
It turns out, the restaurants' losses were not just due to recession, it's partly because of their drop in quality of service. In the recent American Customer Satisfaction Index report based on multiple factors such as service times and food quality, Applebee's customer satisfaction dropped almost 4%.
On more than one occasion customers have taken to Twitter to voice their dissatisfaction with their not so friendly neighbourhood Applebee's:
Last time we were at Applebee's our service sucked. Thats the last time we will be there for awhile— Steph Johnson (@stephjhnsn) August 4, 2017
Last week I had boneless honey BBQ wings...they had almost so sauce on them... rate:3/10— Maria Rinta (@maria_rinta99) July 31, 2017
The last few times I have had a bad experience at Applebees. Will not return— Just Plain Liz (@MissyElspeth) May 28, 2017
Last time I swung by no service. Guy had to watch a film for his liquor license. Had to get my own silverware. I tipped myself though.— Doyel Helper Monkey (@DoyelsHelper) May 28, 2017
DineEquity plans to close about 105 to 135 Applebee's locations and at least 25 IHOP stores. The list of locations has not been released as of it so stay tuned. You can learn more about the closures by visiting the DineEquity website here.
Do you dine at Applebee's or IHOP? Let us know in the comments!