Dine Brands Global (NYSE: DIN) is closing the Applebee's location in Calexico, California, this month, ending a presence that spanned more than two decades. The shutdown, which puts approximately 30 jobs in jeopardy, marks another blow to the local retail landscape following the recent closure of the city's only movie theater.
The restaurant, situated at 2505 Scaroni Road, will cease operations on June 23, according to local reports. The company has not officially confirmed the exact date, and no public reason for the closure has been provided. The move comes as Dine Brands continues to streamline its portfolio, focusing on dual-branded Applebee's-IHOP locations that combine both concepts under one roof.
Dine Brands CEO John Peyton stated that the company is on track to achieve approximately 80 domestic dual-branded restaurants by the end of the year. These combo stores allow the company to maximize real estate and serve customers across dayparts, from breakfast at IHOP to dinner at Applebee's.
The closure in Calexico is part of a broader trend. In the first quarter, Dine Brands opened 24 locations across its brands but shuttered 40, resulting in a net reduction. The company forecasts Applebee's domestic net store count will decrease by five to 15 locations this year.
Applebee's same-restaurant sales in the U.S. rose just 1.9% in the first quarter, while IHOP's were flat. That performance trails key competitors. Brinker International (NYSE: EAT) reported a 4.0% gain in Chili's comparable sales, and Darden Restaurants (NYSE: DRI) posted a 3.2% increase at Olive Garden during their respective quarters, highlighting the pressure on Applebee's from value-oriented rivals.
Dine Brands' earnings report flagged several headwinds that could impact future performance, including inflation, rising labor and utility costs, commodity price volatility, and the financial health of its franchisees. The company also noted that availability of suitable locations remains a challenge.
Industry analysts expect more consolidation among full-service restaurant chains. Victor Fernandez of Black Box Intelligence noted that operators are streamlining and cutting back on underperforming locations. Ari Felhandler of Morningstar added that brands carrying significant debt are most vulnerable to higher costs and closures.
The Calexico closure also underscores the challenges facing border communities. The Applebee's was located near the now-shuttered Calexico 10 Theatres, which closed on May 3 due to what city officials described as an unsustainable financial situation. The loss of both anchors reduces foot traffic for nearby businesses and leaves residents with fewer gathering spots.
As Dine Brands navigates an uneven recovery, the company remains focused on its dual-brand strategy and cost management. However, the sudden shutdown in Calexico—without a clear explanation—raises questions about the underlying drivers, whether related to local demand, lease terms, or broader economic pressures. Workers from the location will now seek new employment, and the future of the building remains uncertain.
