DineEquity Inc. on Tuesday said that it has agreed to sell 33 company-operated Applebee's restaurants in the Midwest to American Franchise Capital LLC.

The Glendale owner of the Applebee's Neighborhood Grill & Bar and IHOP Restaurants chains said that it expects net proceeds of about $26 million from the deal. The transaction also is expected to reduce the company’s real estate obligations by about $22 million while saving about $1.3 million in annual administrative costs. Most of the restaurants are located in Missouri and Indiana.

The sale, expected to close in the third quarter, is part of DineEquity’s efforts to convert to a franchise business model that is less capital intensive and with lower cash flow volatility. Since acquiring Applebee's International in November 2007, DineEquity has sold, or is in the process of selling, 342 Applebee's restaurants.

William J. Georgas, a managing partner with American Franchise Capital, was a previous Applebee’s franchisee under the Georgas Group. “We are excited about this iconic brand’s future and look forward to participating in the revitalization of Applebee's in a meaningful way,” Georgas said, in a statement.

DineEquity shares closed up $1.42, or 3 percent, to $49.61 on the New York Stock Exchange.