GLENDALE, Calif. (AP) -- DineEquity Inc. said Wednesday that it is selling 65 of its Applebee's restaurants for $61 million, one of its final steps in converting Applebee's to a franchised chain.
TSFR Apple Venture LLC, a Michigan restaurant operator, is buying the shops, which are all in Michigan.
DineEquity has sold or reached deals to sell almost all of the 510 U.S. Applebee's restaurants it acquired when it bought the chain in 2007. When the Michigan sale and two other pending deals close later this year, 99 percent of the Applebee's restaurants will be franchised, DineEquity said.
The Glendale, Calif., company also owns the IHOP restaurant chain, which is all franchised. The company said it believes being franchised makes cash flow less volatile than that of company-operated restaurants and the business model requires less capital.
Selling the Michigan restaurants will reduce its sale-leaseback-related financing obligations by about $38 million, and DineEquity expects the sale to result in $2.6 million in annual general and administrative savings.
DineEquity expects to pay $9 million in deal costs.
DineEquity shares rose $2.23, or 5.3 percent, to $44.45 in afternoon trading Wednesday.