Dive Brief:

• Flynn Group, a major restaurant franchisee, committed to building 25 new Applebee’s units in seven years and has purchased 26 existing Applebee’s restaurants from Doherty Enterprises, Applebee’s announced Monday.
• The announcement did not specify where Flynn agreed to develop new restaurants, but the acquired units were located in Georgia and Florida, leaving Doherty’s Applebee’s holdings concentrated in the Northeast.
• The deal is part of Applebee’s plan to return to net new unit openings, the press release said.

Dive Insight:

Flynn Group has had a busy 2024. The franchisee is reportedly seeking a sale of a majority stake worth $5 billion, and last week the group announced it would start offering drone delivery from some of its Seattle-area Panera Bread restaurants as early as next year.

Greg Flynn, the founder and CEO of the massive franchisee, said “there is untapped potential in markets across the U.S.” for Applebee’s.

Tony Moralejo, Applebee’s president, said the deals represented a vote of confidence for the brand on the part of its largest franchisee. Flynn Group operates 450 Applebee’s restaurants in 23 states, or about 29% of the chain’s 1,536 domestic units, an exceptional level of concentration for a franchisee. According to its website, Flynn Group operates 2,600 franchised business locations from six restaurant and one gym brand.

Applebee’s has been working to make new development more attractive for its franchisees through the closure and relocation of underperforming stores, the conversion of second-gen restaurant spaces to Applebee’s and the development of an as-yet secretive new prototype. The closure of weak units sped up Applebee’s unit loss over the last year.

Weak traffic has plagued Dine Brands in recent quarters, as the casual dining segment as a whole faces consumer pullback due to pricing. To ameliorate this, Dine has turned to marketing stunts and is considering the development of co-branded Applebee’s-IHOP units in the U.S.