Chili's Beats Applebee's Is This an Intergalactic Food Fight?

Trouble in Restaurant Galaxy

Alright people Agent J here reporting live from the front lines of… the restaurant business? Turns out Earth's got bigger problems than just rogue aliens. Chili's just smoked Applebee's in sales. Yeah you heard me. According to Technomic Chili's went from about $3.6 billion to $4.6 billion between 2021 and 2024 while Applebee's kinda just sat there. Reminds me of that time I tried to explain the internet to Zed. 'It's like a neural network but with cat videos,' I said. He just stared at me like I was speaking Rigellian.

Same Store Sales Spike! or Not...

Chili's same store sales jumped 31% while Applebee's took a nosedive of 2.2%. Eight straight quarters of decline! That's worse than trying to catch a Squirmian sandworm with chopsticks. John Peyton CEO of Applebee's parent company Dine Brands is trying to stay positive but the stock price is down 40%. Looks like someone needs a Neuralyzer to forget their troubles. Or maybe just a good margarita.

Franchises: The Good the Bad and the Hungry

Dine Brands is considered an "asset light business" because almost all of its restaurants are franchised. According to KeyBanc Capital Markets senior restaurant analyst Eric Gonzalez. But here's the kicker: "it just doesn't have a lot of attention because there aren't many franchised full service businesses to compare it to." Meanwhile Chili's restaurants are almost entirely company owned. It's like comparing a finely tuned Neuralyzer to a broken laser pointer. You get what you pay for.

Operational Control is Essential

Debtwire's Tim Hynes said "The franchisee model is great as far as financial engineering. It allows the company to get really low costs of financing. They securitize the franchisee revenues. But the downside to that is you don't have operational control". No operational control? That's like letting a Pug drive your spaceship. Disaster waiting to happen.

Renovate or Evaporate!

Dine Brands is trying to turn things around with remodels and financial incentives. They're even throwing in IHOP and Applebee's combo restaurants. First one opened in Seguin Texas and apparently it's raking in the dough. "It was $2 million a year in sales IHOP and it's now running at a rate of $6 million a year adding an Applebee's. And so that franchisee alone based upon those results committed to opening eight more," Peyton said. Gotta hand it to 'em that's some clever marketing. Maybe they should hire some MIB agents to promote their new menu items.

The Future of Food Fight

Tim Doherty president of Applebee's franchisee Doherty Enterprises said "Traffic was softer than we would like it to be in 2024. That being said I'm very excited about where the future holds us," I truly believe that we will figure it out and be successful long term." So Applebee's is down but not out. But hey even the Arquillian Battle Cruiser needed a few upgrades right? The restaurant wars continue. Agent J out.