Applebee’s sees potential job cuts from IHOP merger
The Applebee’s International Inc. chief executive said Tuesday the company expects jobs will be cut as IHOP Corp. sells the majority of Applebee’s 508 company owned restaurants.
Overland Park, Kan.-based Applebee’s, which agreed to be acquired by IHOP for $2.1 billion, or $25.50 a share, expects management of the sit-down restaurant chain to stay in place until the deal closes, according to a filing with the Securities and Exchange Commission. The deal is expected to close in the fourth quarter.
South Lake Tahoe is home to both Applebee’s and IHOP. Applebee’s Tahoe manager deferred questions to the chain’s regional office. A phone call to the regional office was not returned.
In a note to company employees, Applebee’s CEO Dave Goebel said the company expects positions directly associated with support for restaurants that are sold to franchisees to be cut.
“That won’t happen overnight — in fact, we expect the re-franchising process could extend to 2010,” Goebel said.
He didn’t say how many jobs could potentially be cut, though IHOP has said it plans to sell most of Applebee’s 508 company-owned restaurants and underlying real estate to pay down some acquisition debt.
He also said Glendale, Calif.-based IHOP plans on significantly reducing general and administrative costs, but didn’t elaborate.
With Applebee’s in its house, IHOP will become the nation’s largest sit-down restaurant chain by locations and sales, with a total of about 3,250 locations and sales of nearly $7 billion.