Many legacy American restaurant chains have been disappearing in recent years, closing underperforming locations as consumer habits shift and operational costs rise.
While these closures can feel like the end of an era for local communities, there is often much more behind these now common occurrences. For some brands, they are part of a broader strategy rather than a sign of financial distress.
Since 1980, Applebee’s has been a staple of casual dining for millions of families, known for its signature appetizers and happy-hour drinks. While the chain remains deeply embedded in American culture to this day, it has begun closing restaurants nationwide for a surprising reason.
Applebee’s closes restaurants nationwide in 2026
Just two months into 2026, at least four Applebee’s restaurants have closed or are scheduled to close across three states, including Indiana, Missouri, and New York, a small portion of its roughly 1,500 locations worldwide.
Confirmed 2026 closures
- Indiana: Two corporate-owned locations in Evansville, including 5100 E. Morgan Ave. and 5727 Pearl Dr., closed Feb. 19, reported USA Today.
- Missouri: A franchised restaurant at 2010 Interstate 70 Dr. SW in Columbia closed Feb. 18, per KMIZ.
- New York: A franchised location at 268 Saratoga Rd. in Glenville will close April 12, according to News10.
The strategy behind Applebee’s closures: dual-branded restaurants
Applebee’s parent company, Dine Brands Global (DIN), is investing heavily in dual-branded concepts that combine Applebee’s with IHOP under one roof.
The company opened 28 domestic and 18 international dual-branded locations in 2025. As of early 2026, 32 domestic units are operating, with nine more under construction, according to the company’s latest earnings call.
Dine Brands expects to open at least 50 additional dual-brand locations in 2026, bringing the domestic total to about 80 by year-end.
Company CEO John Payton said the combined restaurants generate approximately 1.5 to 2.5 times more revenue than single-brand locations.
“These initiatives built trust with our guests and started translating into tangible results with improving unit-level performance driven by positive sales and traffic trends and higher guest engagement scores across our brands,” said Dine Brands Senior VP of Finance and Investor Relations in the earnings call.
For the full year of fiscal 2025, net revenue increased 8.2% year over year to nearly $879.3 million, with Applebee’s systemwide sales up 1.3%. This growth was attributed to the acquisition of restaurants in late 2024 and 2025, partially offset by a decrease in franchise and rental revenues from those transactions.
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More Applebee’s closures expected in 2026
In 2025, a combined 110 Applebee’s and IHOP locations closed, including 13 franchise-owned units in the fourth quarter.
The company expects to close around five to 15 Applebee’s restaurants in 2026. However, the dual-branded locations will be used to offset the shutdown of underperforming units.
More Restaurant Closures:
- After bankruptcy, iconic seafood chain closing more restaurants
- 30-year-old pasta chain announces 35 restaurant closures in 2026
- 53-year-old restaurant chain is quietly closing locations nationwide
Dine Brands CFO Vance Chang said annual closures for large franchise systems typically fall within a 2% to 3% range, and that this rate has not changed drastically.
“It should come down primarily because of, one, the dual brand possibility. Two, the natural expiration of the franchise agreements is going to come down over the next few years,” said Chang in the earnings call.
In many cases, rather than being eliminated, underperforming standalone restaurants may be replaced by stronger dual-brand locations.
Rising costs reshape the restaurant industry
The company’s strategy comes as restaurant operators across the industry face ongoing challenges.
Prices for food away from home climbed 4% in the 12 months ending January 2026, according to recent U.S. Bureau of Labor Statistics data.
Over the past five years, food and labor costs for the average restaurant have each increased by about 35%, according to the National Restaurant Association.
As consumers become more value-focused, operators are looking for ways to improve efficiency and maximize traffic across all-day dining.
“As more QSR brands struggle to keep pace with the rising cost of goods, labor, rent, and just about everything else, the public will see more and more co-branding,” said Forbes Franchise Expert Gary Occhiogrosso. “In my opinion, it’s a win-win for the operator and the consumer, more ‘bang for the buck’ all around.”
Applebee’s repositioning
While individual closures affect local communities, Applebee’s overall footprint remains stable. The company’s focus on dual-brand locations reflects a shift toward higher-productivity restaurants designed to improve margins, expand customer reach, and support long-term growth.
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