Applebee’s Neighborhood Grill and Bar restaurants, one of Kansas City’s biggest business successes and built on its signature barbecue riblets, is moving its headquarters to California.
The relocation ends the long local run of the business that Abe J. Gustin Jr. co-founded in 1988 and that grew to more than 2,000 stores. It is expected to trigger layoffs from among the roughly 220 employees at Applebee’s International Inc. headquarters in Kansas City.
Gustin had bought 45 Applebee’s restaurants, which started in Atlanta. He made Kansas City the chain’s launching pad for growth into a nationwide chain of casual and mostly franchisee-owned eateries.
Kansas City will keep 80 to 90 of the current headquarters jobs, which are in accounting, guest relations, information technology help and support for the point of sale stations used by restaurant staff, said Kevin Mortesen, a company spokesman.
Of the remaining area employees, Applebee’s will offer transfers to 10 percent to 20 percent, and refill most the remaining posts with new hires at the Glendale, Calif., headquarters of its parent company, DineEquity Inc.
Applebee’s is moving its marketing, operations and culinary departments to California so they can work alongside, although separate from, their counterparts at IHOP, the other restaurant chain owned by DineEquity.
“We’re sad to see them go. We want Kansas City to be a vibrant community with lots of jobs,” said Michael Norsworthy, president of Kellann Restaurant Management, which operates the 54th Street Grill & Bar chain based in Kansas City.
The parent company does not expect to cut costs significantly from the move. It is part of an effort to accelerate growth in the two restaurant brands and the development of traditional and nontraditional locations.
“This move best positions the company to act as a nimble, effective and efficient force for the future,” Julia A. Stewart, chief executive of DineEquity said in a statement. “Consolidating most brand-centric, franchisee and consumer-facing aspects of Applebee's is an important step in that direction.”
Steven R. Layt, president of Applebee’s, will not move and has resigned, according to the company. Layt joined Applebee’s in 2012, becoming its senior vice president of operations before being named president last year.
DineEquity counts more than 2,000 Applebee’s restaurants, mostly franchise stores, across the United States and in 16 countries.
Stewart, an Applebee’s veteran, was in Kansas City this week to make the announcement, Mortesen said. She was unavailable for comment Friday.
She joined Applebee’s in the Kansas City area as its president in 1998. Stewart left in 2001 when it became clear she was being passed over for the company’s chief executive post.
Instead, she became chief executive of IHOP, then called International House of Pancakes, and led the purchase of Applebee’s to form DineEquity in 2007.
Applebee’s moved its headquarters to Kansas City from Lenexa in 2011, aided in part by a $12.9 million incentive package from Kansas City and Missouri.
The tax incentives mostly came through the Missouri Quality Jobs program, but also involved a state job training program and the city’s Chapter 100 bond program. Applebee’s said at the time that it moved 388 employees to Kansas City.
It was unclear Monday whether shifting jobs to California would trigger any changes in the tax benefits DineEquity received at the time of the move.
DineEquity said moving the Applebee’s operations west would trigger $13 million in costs, consisting of $5 million in severance and labor costs and $8 million of lease and other facility costs. Mortesen could not elaborate.
Luring the headquarters eastward across the state line had marked Kansas City’s first big counterpunch against Kansas’ success in luring Missouri headquarters to relocate to the Sunflower State.
Kansas City Mayor Sly James, who railed against the “border war” at the time, also hailed the move as a blow to help convince Kansas officials that the battle only hurts local tax revenues while doing nothing for the local economy.
James, however, also praised Applebee’s at the time for keeping its headquarters and the jobs in the region.
Applebee’s employees whose jobs are moved will receive severance pay and their paychecks at least through Feb. 1, Mortesen said. They also will receive help searching for new jobs.
Applebee’s International was formed when Gustin purchased the group of restaurants that had begun in Atlanta. Gustin died in 2010. Under Gustin, the company spread the Applebee’s brand to more than 1,100 locations by the time he stepped down in 2000.
Its headquarters crossed the state line twice, moving from Kansas City to Overland Park in 1993, before the move to Lenexa in 2007.
The Kansas City area still is the home of the restaurant groups Houlihan’s Restaurants Inc. , based in Leawood, and the 54th Street Grill & Bar, based in Kansas City.
Applebee’s International Inc.
▪ 2,000 restaurant chain, with 220 jobs in Kansas City
▪ Co-founded by Abe J. Gustin Jr. in 1988
▪ Headquarters moving to Glendale, Calif.
▪ Owned by DineEquity along with IHOP chain