Restaurant firm plans for Florida growth

The money trend in restaurants these days is fast casual, but Ed Doherty still believes in the lure of sit down, casual waiter-waitress service dining.

Doherty, who built a restaurant company into one of the 100 largest in the country by revenues over the past 30 years, also believes in the lasting power of the Sunshine State. Those are the main reasons why Doherty, through Allendale, N.J.-based Doherty Enterprises, recently bought 35 Applebee's Neighborhood Grill & Bar locations in Florida, including 13 on the Gulf Coast. Doherty Enterprises now owns a combined 100 Applebee's, with 62 in New York and New Jersey. An Applebee's location reports $2.37 million a year in sales on a nationwide per-store average, according to Nation's Restaurant News.

“The West Coast of Florida is a great market,” Doherty tells Coffee Talk. “This is a great opportunity.”

Doherty bought the Florida Applebee's, plus three others in Georgia, from Duluth, Ga.-based Gator Apple. The Gulf Coast locations include Applebee's in Cape Coral, Estero, Fort Myers, Naples, North Port, Port Charlotte, Sarasota and Venice. Terms of the deal weren't released.

Doherty plans to invest about $12 million in exterior and interior upgrades on the entire Applebee's portfolio. He also says he intends to inject fresh “energy and leadership” into the eateries. He expects the Florida and Georgia locations will push the entire company, founded in 1985, to more than $500 million in annual sales and 9,500 employees.

But while Doherty is bullish on the chain and casual dining, Applebee's has had a rough recent history. The company, with about 1,800 total locations, struggled in the mid-2000s to compete with rivals and changing consumer habits. Pancake chain IHOP Corp. acquired Applebee's in 2007 for $1.9 billion.

Applebee's, however, had a market capitalization of $1.8 billion at the time of the sale — nearly double IHOP's market capitalization. The new corporate parent over both chains, Glendale, Calif.-based DineEquity, has shifted to a franchisor business model for Applebee's instead of being an owner/operator. The strategy revision is working: Second-quarter net income, reported July 30, was up 4% over the 2012 second quarter.

Doherty Enterprises now operates seven restaurant concepts in four states. In addition to Applebee's, the firm also owns Panera Bread, Chevys Fresh Mex and Noodes & Co. locations.