RISE - Menu Monitor

Applebee’s International Inc. is considering selling the company or pursuing other strategic alternatives. According to analysts,
Applebee’s has been hurt in recent months by a decrease in customer spending and an increased competition from other barand-grill
style restaurants. The chain’s shares have underperformed on the Standard & Poor’s restaurant index this year.
Breeden Partners LP, a hedge fund with a 5% stake in the company, has been urging Applebee’s to cut spending, sell more
restaurants to franchisees and improve cash returns to shareholders. Breeden has criticized Applebee’s for its alleged
compensation practices. Breeden Partners is looking for Applebee’s to “eliminate unnecessary expense and unhealthy
practices,” discontinue the use of a corporate jet and suspend incentive compensation for senior executives. (Nation’s
Restaurant News 1/27/07, 2/14/07; NRN Daily NewsFax 1/30/07; MSNBC.com 2/13/07; The Wall Street Journal Online
2/13/07)
Applebee’s reported February same-store sales fell 3.9% to domestic restaurants and 4.3% at corporate restaurants. (NRN
Daily NewsFax 3/1/07)
Applebee’s International Inc. has instructed its legal and financial advisors to contact potential buyers as part of exploring its
strategic alternatives. Potential buyers would most likely include large private-equity firms. (NRN Daily NewsFax 3/13/07)
Applebee’s International Inc. is continuing to explore strategic alternatives and has contacted its legal and financial advisors to
discuss options. Analysts speculated that potential buyers for the company would most likely be large private equity firms. One
analyst noted that any purchaser would need to provide at least $800 million in equity as part of the acquisition. (NRN Daily
NewsFax 3/13/07; Nation’s Restaurant News Online 3/12/07)
Applebee’s International will appoint Breeden Capital Management LLC nominees to its board, thus heading off a proxy fight
contest at the company’s 2007 annual meeting of Stockholders. Applebee’s said that it has received bids to acquire the
company. Applebee’s plans to have a second round of discussions with potential buyers before asking them to submit binding
offers. Applebee’s did not release any more details on the preliminary offers. (Company Release 4/26/07; Houston Chronicle
4/26/07)
Applebee’s Chief Financial Officer and Executive Vice President, Steve Lumpkin, was named one of the best Chief Financial
Officers in the U.S., according to Institutional Investor magazine. Lumpkin ranked third of all restaurant companies’ Chief
Financial Officers; McDonald’s ranked first and Starbucks second. (Company Release 5/4/07)
Applebee’s International Inc. reported May same-store sales decreased 2.1% in domestic units systemwide, 1.9% in domestic
franchised units and 2.9% in company-owned units. Guest traffic declined 3%–3.5%. (Company Release 5/30/07)
Applebee’s International Inc. reported for the first quarter ended April 1 net earnings fell 65% to $9.5 million from $27.2 million
for the same period last year. Revenues declined 0.3% to $337.6 million. Domestic system-wide same-store sales decreased
4% and for the four weeks ended April 29, domestic systemwide same-store sales fell 0.7% and same-store sales at
company-owned locations dropped 0.8%. (Nation’s Restaurant News 5/21/07 p10)
IHOP Corp. made a bid of more than $2 billion to buy Applebee’s International Inc., the Bloomberg news service reported,
citing an unidentified source. Both IHOP and Applebee’s refused to comment. IHOP has said it is considering the acquisition of
a noncompetitive concept that is already franchising. (NRN Daily NewsFax 6/14/07)
Applebee’s International has launched an ad campaign featuring celebrity chef Tyler Florence. The campaign is centered
around the theme “Grilling Fresh.” Dishes such as crunchy onion rings, a California shrimp salad, and an Aloha Burger are
being rolled out during the campaign. In addition, Applebee’s is holding a “Big Burger Showdown” contest and asking
consumers to create the chain’s next burger. Tyler Florence will choose the winning burger, which will be featured on next
year’s menu. The winner will receive $5,000. (NRN Daily NewsFax 5/29/07; NRN Daily NewsFax 6/12/07)
An Applebee’s location in California accidentally served a two-year-old child a margarita instead of an apple juice. After the
child became drowsy and started vomiting, he was rushed to the hospital. Believing it was an honest mistake, Applebee’s will
reimburse the child’s family for the medical bills and units will no longer store apple juice and margaritas in similar containers.
(Abcnews.go.com 6/15/07)
Applebee’s International Inc. has narrowed its search for a new advertising agency to two companies: TBWA\Chiat\Day and
McCann Erickson. Adweek reported that Applebee’s account is worth $180 million. Applebee’s expects to choose an agency
sometime in the summer. (Bizjournals.com 7/6/07)
Applebee’s International Inc. could pay IHOP $60 million if it backs out of its pending deal to be acquired. Both companies
expect the $2.1 billion deal to close in the forth quarter of 2007. IHOP, based in Glendale, CA, operates 1,319 units and
Overland Park, KS-based Applebee’s operates or franchises 1,943 casual-dining units. (Nation’s Restaurant News 7/30/07)
Applebee’s International reported June same-store sales decreased 0.3% systemwide. Same-store sales for company-owned
restaurants fell 0.2%. For the second quarter, same-store sales decreased 0.9% systemwide, 1.2% for company-owned
restaurants and 0.8% for domestic franchised locations. (Company Release 7/16/07)
©Technomic Information Services 2007, CIS profiles may not be copied or distributed in any print or electronic format without a license or written consent.
Technomic believes that its sources of information are reliable, but does not assume any responsibility or liability for the accuracy of the information
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