Irene Kim: By the end of 2017,
it seemed like the end for Applebee's.
The company had just closed 99 locations,
with plans to close up to 80 more.
And this was just the end of a struggle
that Applebee's had been fighting for years.
But then something unexpected happened:
Applebee's made a comeback.
Sales went up 5.5%
in the first nine months of 2018.
After falling nearly 8% just a year before.
It looks like people are once again
Commercial: Eatin' good in the neighborhood.
Kim: So, what happened?
Bill and TJ Palmer opened
the first Applebee's in 1980.
Three years later,
they sold the restaurant concept
to WR Grace and Company,
and it quickly blew up.
By 1994, there were more than
500 Applebee's locations
across the US.
And just four years later, in 1998,
the company opened its 1,000th restaurant,
rivaling competitors' store locations,
like IHOP, with 800,
and Denny's, with more than 1,000 stores nationwide.
Kate Taylor: Applebee's was really doing well
because they were reliable.
They weren't too fancy, they weren't too cheap,
but they hit a nice sweet spot
in the middle for people.
Kim: Dishes like Applebee's boneless buffalo wings
became a fan favorite,
and promotions like half-priced appetizers
made Applebee's a popular spot
for customers looking for a good deal.
But then, at the end of 2007,
the recession happened,
and people stopped eating out as much.
Katie Couric: We are in a recession.
News anchor: The longest recession since World War II.
Couric: But the question now: When will it end?
Kim: As Applebee's sales struggled
in the post-recession economy,
it attempted to reinvent itself
as a modern bar and grill
to draw in up-and-coming millennials.
But it didn't work.
Taylor: Applebee's tried to be a little bit trendy,
a little bit cool.
And it just came off as kind of corny for most people,
where it felt like they were trying too hard
to win over millennials.
Kim: New menu items like hand-cut $20 steaks
and brisket nachos not only failed
to bring in new millennial diners;
they alienated the very customers
who had made Applebee's successful in the first place:
People looking for a reliable, affordable meal out.
By 2015, Applebee's sales were falling.
And only continued to fall, year after year.
In 2017, the company closed 99 locations
and announced plans to close 60 to 80 more
the following year.
Julia Stewart, the CEO of Applebee's parent company,
Dine Brands Global, reportedly stepped down
because of Applebee's poor performance.
The former waitress was one of the industry's
most celebrated and longest-serving executives.
For a brief time,
it looked like Applebee's was done for.
But instead of folding, it turned things around.
Taylor: Starting in late 2017, 2018,
Applebee's parent company, Dine Brands,
had new leadership come in,
and this new leadership was very, very focused
on being inexpensive and not trying to be too trendy.
Basically, they took Applebee's
back to the basics.
They're not gonna try and win over millennials
with these fancy new menu items.
They're gonna find something that's inexpensive
that people are proven to like.
The biggest thing that kind of kicked off the turnaround
for Applebee's was the Dollarita, the $1 margarita.
Kim: After the success of the Dollarita,
Applebee's quickly launched
its Neighborhood Drink program,
releasing a new $1 to $3 drink every month.
And that move has paid off.
Alcohol now accounts for 15% of Applebee's business.
John Cywinski: We've sold more than 55 million
Neighborhood Drinks at Applebee's
since we launched this program in October of 2017.
Kim: And although overall revenue
hasn't quite caught up,
the company is going pretty strong.
Cywinski: 2018 was the best year that Applebee's had
in the past 25 years.
We're very proud of that.
When I think about Applebee's,
we are, in many respects, America's kitchen table.
We've got 1,700 locations, and we very much believe
"eatin' good in the neighborhood"
embodies who we are
and America resonates or connects with our brand.
Kim: But will Applebee's be able to
keep up the momentum?
Taylor: Applebee's has lost momentum a little bit
so far in 2019.
It's hard because they had such a good year last year.
It's hard to keep that going.
Millennials, they figured it out.
They want, honestly,
the same thing every generation wants:
good prices, cheap drinks.
They need to kind of figure out
if there's anything different that they need
to do for Gen Z.
Kim: What do you think of the new Applebee's?
Let us know in the comments below.