Restaurant operator DineEquity Inc. said Thursday that it would move the headquarters of its Applebee’s International Inc. chain from suburban Kansas City, Mo., to its Glendale corporate home.
The consolidation into its offices at 450 N. Brand Blvd. will involve some layoffs.
Applebee’s employs roughly 220 in the Kansas City area. Of those, about 80 to 90 people will stay put, consisting of workers in its backend support, help desk, guest relations and accounting departments. Only 10 percent to 20 percent of the remaining employees will be offered the chance to relocate to Glendale, according to Kevin Mortesen, DineEquity’s vice president of communications, who emphasized the final tally is still being determined.
Applebee’s President Steven R. Layt will not be making the move to Glendale and has opted to resign, the company said in a statement.
Julia A. Stewart, DineEquity’s chairwoman and chief executive, will serve as Applebee’s interim president in addition to her current responsibilities, according to the statement.
DineEquity, which franchises some 3,600 restaurants in 18 countries, employs 525 people. It also owns IHOP Corp., which is based in its Glendale office as well. As of June 30, DineEquity operated just 36 restaurants. Mortesen said DineEquity may opt to rent out more office space in a nearby building and plans to hire employees locally.
“This move best positions the company to act as a nimble, effective and efficient force for the future,” Stewart said in the statement. “Consolidating most brandcentric, franchisee and consumer facing aspects of Applebee’s is an important step in that direction. While there will be some costs associated with this, we remain fully committed to returning substantially all of our free cash flow to shareholders.”
DineEquity said in the statement that it expects the move to cost the company $13 million before taxes through fiscal year 2016, which comes in the form of lease and facility costs, plus severance packages and other personnel expenditures.
Mortesen said the decision to move out of Kansas City was not driven by economic motives.
“It’s a strategic play,” he said. “By having those functions nearer to the brand it will inspire more collaboration and more integration.”
He declined to disclose the exact timing of the move other than to say the company will take a phased approach.
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