FSR May 2023

FEATURE

umes increasing by more than $500,000 in the same time period. In November 2022, Cywinski argued the chain was in its “glory years” and in a better posi tion than ever before in the concept’s his tory. (When he joined in 2017, AUV was at $2.2 million.) VALUE, VALUE, VALUE During Dine Brands’ fourth quarter and 2022 full-year earnings call, Moralejo noted the importance of retaining Apple bee’s value proposition. Though he pre dicts the chain will open more stores in 2023 than it did last year, it will still see a net loss of 10-20 outlets. "It's not where we want to be in the future," Moralejo told investors. "Based on my experience across multiple global restaurant brands, the rate or the pace of development, it comes down to fran chisees believing there’s an attractive value proposition." Applebee’s same-store sales increased 1.7 percent in Q4, making it eight straight quarters of positive growth. It lapped the previous year's 9.1 percent increase versus the same period in 2019. Average weekly sales per restaurant in Q4 were $52,500, which is $2.73 million in annualized AUV. For the year, comps rose 5.1 percent. For context: Applebee’s began trad ing publicly in 1989, and quickly became one of the largest casual-dining restau rant chains in the U.S. with an impres sive ramp-up period. Applebee’s jumped from 250 stores in 1992 to more than 500 in 1994. By 1998, Applebee’s opened its 1,000th restaurant, and the follow ing year hit a record of $2.35 billion in systemwide sales. In 2007, IHOP (International House of Pancakes) Corporation announced it was acquiring Applebee’s for approx imately $2.1 billion. After closing the deal, IHOP Corp., under DineEquity at the time, began franchising most of Applebee’s 500 company-owned loca tions with a plan to revitalize the chain, and was renamed to Dine Brands Global in 2018. Prior to joining Dine Brands in 2020, Moralejo oversaw global development at

NEARLY EVERY MILLENNIAL can recall a story when they carpooled with friends or family over to their neighborhood Applebee’s Grill + Bar, likely after a high school football game or choir concert, to grab Late-Night Half-Price Apps like spinach artichoke dip and mozzarella sticks. Memories are etched onto the walls, and not just in a figurative sense; the vast majority of restaurants display pictures of regional high school sports teams, nonprofits, and local lore and his tory as a tribute to the communities the eateries serve.

Knowing the history of an organization helps give context to the challenges it has overcome, and enables leaders to learn from past mistakes to help shape its future. Though Applebee’s tallied 1,569 open locations in the U.S. as of year-end 2022, it all started in 1980 when co-founders Bill and TJ Palmer opened T.J. Applebee’s Rx for Edibles & Elixirs (quite a tongue-twister name) in Atlanta. And it wasn’t until 1986 that the name changed to Applebee’s Neigh borhood Grill & Bar. The founders’ vision for the concept— to create a restaurant with a neighbor hood setting, friendly service, and quality fare at a lower price point than competitors—hasn’t changed much at the casual-dining chain 43 years later, despite the business changing hands a number of times. “I’m a first-generation American, and because of that, I know the value of value,” says Tony Moralejo, who was named president of Applebee’s U.S. in January after serving at its parent com pany, Dine Brands, as president of inter national and global development for three years. “I came to this country as an immi grant with my parents and my brothers, and I went through the same struggles that our guests are going through today with high cost and adjustments,” he con tinues. “And so whenever there's a period of uncertainty, guests lean to the brands that they trust, right? And Applebee's is

a brand that they trust. And one of the reasons they trust us is because we are affordable, and we have a strong value proposition.” Moralejo succeeded John Cywinski, who served as Applebee’s chief mar keting officer in the early 2000s before returning in 2017 as president. Cywin ski left his position in January to become

TONY MORALEJO

CEO of Los Angeles-based Modern Res taurant Concepts, parent company of Qdoba, Lemonade, and Modern Mar ket Eatery. During his tenure at Applebee’s, Cywinski shuttered roughly 300 under performing U.S. stores across five years. The time spent optimizing the system and closing low-volume restaurants paid off, and led to average unit vol

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