An Applebee's franchisee plans to shut down eight of its 33 locations. The closures are happening because the company is undergoing Chapter 11 bankruptcy. AppleIllinois LLC submitted its bankruptcy filing on April 22.
Applebee's boasts 2,000 locations throughout the United States, nearly all of which belong to individual franchise investors. Over the years, the restaurant has become a household name, offering a variety of economically priced menu options. However, it is speculated that this Illinois branch of the restaurant chain is suffering because many diners are opting for less expensive food options and even pricier, more fashionable restaurants over eateries like Applebee's.
AppleIllinois indicated it may close more than eight locations and has issued warnings to its employees to that effect. However, it is important to remember that the restaurant closures are a part of a Chapter 11 reorganization, which is a positive for the 1,700 employees who work at the franchisee's 33 locations. While some stores will be closed, the majority of the stores will be saved and economically strengthened as a result, saving as many jobs as possible.
Just because a business is undergoing bankruptcy does not necessarily indicate it is no longer viable. Furthermore, the business will no doubt be much stronger and more economically stable coming out of Chapter 11 proceedings. In this case, AppleIllinois hopes to sell its locations, property and franchise privileges as a part of its bankruptcy. A spokesman for the company claims that multiple potential buyers will want to purchase the rights to the franchise. It appears the franchisee has chosen a responsible means of confronting debt that has become manageable in an effort to save business assets and jobs for as many workers as is possible.
Source: Chicago Tribune, "Applebee's to close 8 Chicago area restaurants," Becky Yerak, May 8, 2013