Applebee's set to enter Baltimore-area market 9 restaurants expected to open

October 28, 1993|By Timothy J. Mullaney | Timothy J. Mullaney,Staff Writer

Applebee's International Inc., a Kansas City restaurant chain, plans to open its first Baltimore-area outlets early next year, challenging such entrenched chains as Chili's and TGIFriday's.

Applebee's, a 265-restaurant chain that operates in 38 states, recently granted a Baltimore-area franchise to Rose Casual Dining Inc. of Newtown, Pa., said Harry Rose, president of Rose Casual.

He said he planned to open as many as to nine Maryland Applebee's Neighborhood Bar & Grills over the next five years, with two or three to open next year.

"The company is growing at a rapid pace with extreme success in the marketplace," Mr. Rose said. "It is priced better than its competitors."

Mr. Rose said he was negotiating for locations in Annapolis, Columbia and Towson but declined to give details. Rose also has franchise rights to Maryland's Eastern Shore, he said.

An Oct. 21 report by Alex. Brown & Sons Inc. said the Applebee's chain was expected to grow about 30 percent a year. Analyst Michael A. Fineman said the chain is expected to add 100 units next year, about 75 of them franchised. But the firm is neutral on Applebee's stock, which trades at about 34 times estimated 1994 earnings.

The stock closed yesterday at $26.625 a share, down 37.5 cents. The company reported record net earnings yesterday of $2.8 million, or 19 cents a share, for its third quarter -- up 81 percent from a year earlier.

Alex. Brown estimates that the company will earn 60 cents a share this year and 77 cents a share next year.

Mr. Fineman said the company has followed the strategy of similar chains by concentrating its early growth in the Southeast and Midwest. Less stringent liquor and franchising laws, as well as lower construction costs, make it easier to manage the early stages of a chain's growth in those areas, he said.

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