Applebee’s is done trying to win over millennials

Applebee’s says it’s made a mistake: It’s been trying too hard to be cool.

After years of working to brand itself as a modern millennial hangout, the family-friendly chain is reversing course. It’s bringing back all-you-can-eat specials and doubling down on discounts like its “2 for 20” menu. The chain’s parent company, DineEquity, is also bringing on a new chief executive and closing up to 160 Applebee’s and IHOP locations in a bid to boost profits.

“Over the past few years, the brand’s set out to reinvent Applebee’s as a modern bar and grill in overt pursuit of a more youthful and affluent demographic,” John Cywinski, president of Applebee’s said in a call with analysts this week. Those efforts, he said, included “a clear pendulum swing toward millennials.”

But that turned out to be a bad idea. Longtime regulars balked at new menu items and modern decor, said Patrick Lenow, a spokesman for DineEquity.

“I think, in retrospect, we may have tried too hard to attract new guests,” he said. “That left some of our fans shaking their heads, asking ‘What happened to Applebee’s?’”

Now the company is taking items off the menu, including a turkey sandwich with sriracha chile lime sauce and a pork-ham-bacon sandwich. And it is bringing back old favorites, Lenow said, though he declined to say what those were. (“We wouldn’t want to tip off our competitors,” he said.)

Applebee’s is also assessing “whether the brand truly gets credit for hand-cutting steaks in the restaurant and whether we should continue with this approach,” Cywinski said.

Analysts said these changes are part of a broader turnaround effort at Dine Equity’s 3,700 locations, all of which are franchised. Even IHOP, which has traditionally been a source of stability for the company, has seen sales slip in recent quarters.

“They’re going back to the roots of their business, which is Middle America,” said Brian Vaccaro, an analyst for Raymond James. “They want this to be a go-to place for Americans on a Friday or Saturday night – maybe not in urban markets where you’ve got a lot of restaurants and higher incomes, but certainly in many parts of the country.”

In all, Glendale, Calif.-based Dine Equity plans to close up to 135 Applebee’s restaurants and about 25 IHOP locations. (It will offset some of those closures with the addition of up to 30 Applebee’s and 95 IHOP franchises.) Executives said they had yet to determine which locations would be closed, but added that they plan to focus on older ones and “underperforming – and perhaps even brand-damaging – restaurants.”