In bankruptcy, many Applebee’s may close
More than half of the Applebee’s restaurants in the Chicago area could close their doors this summer following a bankruptcy filing by one of the dining chain’s franchisees.
AppleIllinois, which filed for bankruptcy reorganization last month, said in court filings that it has a deal with another Applebee’s franchisee to sell 15 of its 33 Chicago-area restaurants. The locations of restaurants it plans to sell haven’t been disclosed in court papers.
AppleIllinois is soliciting other bids, although it previously had tried to find buyers for its restaurants.
AppleIllinois has notified the state, under a federal law, that it could eliminate 1,700 jobs at its restaurants by late June due to a “closing or possible closing” of its outlets, according to the filing that was made public Tuesday.
That number would be less if AppleIllinois completes the sale of 15 restaurants to RMH Illinois, whose parent company operates Applebee’s in nine states, including Alabama, Florida, Missouri and Texas.
Locally, AppleIllinois operates Applebee’s in Crestwood, Country Club Hills, Evergreen Park, Homewood, Joliet, Matteson, Mokena, Plainfield, Romeoville and Tinley Park.
Kentucky-based AppleIllinois filed for bankruptcy April 22, listing assets of between $1 million and $10 million and liabilities in the same range.
The company says reorganization in bankruptcy was considered the best option after “seeking alternative solutions,” according to a court document. The company said that, as part of the bankruptcy proceedings, it was authorized to close “any or all restaurants” it operates.
RMH Illinois will pay $2.4 million for the 15 restaurants, but AppleIllinois is seeking court approval, using RMH’s offer as a “stalking horse” bid, to consider other offers for its restaurants. Should competing offers surface, an auction would be held for the assets, although a date for that auction was not set.
AppleIllinois said it had secured financing to continue running its restaurants through June 10, noting that time “was of the essence” to complete a sale, court records indicate.
AppleIllinois’ managing member W. Curtis Smith said in a court document that the company acquired 23 underperforming Applebee’s in the Chicago area in 1998 from another franchisee and poured money into boosting sales, including extensive renovations of the restaurants.
The company said the recession hurt revenue, and it marketed the restaurants to about 50 potential buyers before filing for bankruptcy.
AppleIllinois is affiliated with another Kentucky-based Applebee’s franchisee, Apple Sauce, which operates restaurants in Florida, Indiana and Ohio, but those locations are not affected by AppleIllinois’ bankruptcy filing.