Applebee’s International Inc. will be moving its headquarters from its original location in Kansas City, Missouri to Glendale, California. The relocation is part of the company’s acquisition by DineEquity Inc. (formerly IHOP Corporation), which has made an impact not just on the employees but on the community as well.
As part of the headquarters relocation, many employees will either be offered the opportunity to relocate to California or be handed the pink slip. Of the approximately 220 employees in the Kansas City headquarters, only 10 to 20 percent will be offered the opportunity for relocation while between 80 and 90 employees will remain in the old headquarters. These workers belong to departments in backend support, guest relations, help desk, and accounting.
According to Kevin Mortesen, DineEquity’s vice president of communications, the final tally is still in the process of determination. The layoffs are considered necessary for cost-cutting purposes, too.
Steven R. Layt, Applebee’s President, has rejected the offer for relocation and has handed in his resignation, which took effect on 4 September 2015. In the meantime, Julia A. Stewart, DineEquity’s chairwoman and chief executive officer, will become the company’s interim president.
DineEquity, formerly known as IHOP Corporation, is an American company operating and franchising both Applebee’s and IHOP (International House of Pancakes) restaurants. Currently, it has franchises with approximately 3,600 restaurants in 18 countries but it only owns 36 restaurants.
The corporation has also announced its potential plans to rent more office space in a nearby building as well as hire more local employees.
In her official statement, the relocation is designed to make the company become more nimble, effective and efficient in the future. The consolidation of Applebee’s brand’s most brand-centric, consumer-facing and franchisee aspects are a crucial step in this direction. The associated costs of the relocation have been carefully considered so that free cash flow to Applebee’s shareholders will be substantially returned in the future.
DineEquity’s management has also issued a statement regarding the expected costs for the relocation – $13 million before taxes until the fiscal year 2016. The bulk of the costs will be used for lease and facility as well as severance packages and personnel expenses.
Mortesen, furthermore, emphasized that the relocation decision was neither driven nor determined by economic motives. The relocation is a strategic plan designed to inspire more integration and collaboration between the Applebee’s and IHOP brands mainly by having their functions as near as possible.
While Mortesen has declined to disclose the exact time for the relocation, he said that it will be a phased approach.
Before its acquisition by DineEquity, Applebee’s International, Inc. is an American company that develops, operates and franchises the Applebee’s Neighborhood Grill and Bar restaurant chain.
The Applebee’s dining concept is characterized by a casual atmosphere and mainstream American dishes that are typically served at home, too. The dishes on its extensive menu include salads, chicken, pasta, shrimp, and riblets, the last of which is considered as the restaurant chain’s signature dish. Every Applebee’s restaurant has a bar area with alcoholic beverages for sale except in areas where the practice is prohibited by law.
DineEquity’s acquisition of Applebee’s was announced on 29 November 2007; on 16 July 2007, the deal was announced to the public. The acquisition was valued at $2.1 billion.
As a result of the acquisition, Applebee’s stockholders received $25.50 cash per share. IHOP also changed its name to DineEquity with the new entity asserting that its franchising model will also be applied to Applebee’s restaurants.
At the time, Stewart said that the DineEquity has the excellent opportunity to re-energize the Applebee’s brand by getting its employees, franchisees, and customers to look at it in a different way. DineEquity also has the opportunity for differentiation for Applebee’s and the future appears bright.
With the merger of the two companies, IHOP and Applebee’s became the world’s largest full-service restaurant entity with over 3,250 locations. Suffice it to say that you will find at least one Applebee’s or IHOPs in your area no matter where you may be on the East or West Coast of the United States, even in its territories.
While the majority of the former Applebee’s employees in its Kansas headquarters may not be happy about the development, customers can at least expect positive developments in the restaurant chains.