An Applebee's restaurant serves customers on August 10, 2017 in Chicago, Illinois. DineEquity, the parent company of Applebee's and IHOP, plans to close up to 160 restaurants in the first quarter of 2018. The announcement helped the stock climb more than

(Photo by Scott Olson/Getty Images)

Applebee's Sues After Restaurant in Profiling Case Closes

The chain argues that the company has suffered "significant brand and reputational damage."

May 11, 2018 - 3:07 pm
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INDEPENDENCE, Mo. (AP) - Applebee's is suing a franchise owner in the Kansas City area after the closure of a restaurant where two black women said they were falsely accused of not paying for meals. 

The chain argues that the company has suffered "significant brand and reputational damage'' from the "controversial and high-profile circumstances of the closure'' of the restaurant at the Independence Center Mall and the closures of six other restaurants in Missouri and Kansas, The Kansas City Star reported. 

The Independence closure happened in February, after the two women posted a video showing an employee, a police officer and a mall security guard confronting them for "dining and dashing'' during a previous visit, which the women denied. The video has been viewed millions of times. 

At the time of the Independence restaurant's closure, Applebee's said it didn't "tolerate racism, bigotry or harassment.'' It's unclear whether the closure was directly related to the February incident because the Independence Center Mall has struggled financially. It got a new owner in February while facing the prospect of a foreclosure sale because its previous owner was unable to pay off a $200 million loan. 

Applebee's said in a statement Friday that its lawsuit was "based on a long-standing breach of contract against an individual and is not dependent on a particular incident.'' 

The lawsuit, which seeks $11 million in damages, was filed this month against William Georgas of Greenwich, Connecticut, who is accused of failure to pay rent, advertising fees and royalties. He is identified as a principal shareholder of Apple Central KC LLC and Apple Central LLC, which operated the seven closed locations. The suit said Georgas personally guaranteed obligations of the franchisee businesses, which were not named as defendants in the lawsuit. 

Georgas' attorney didn't immediately return a phone message Friday from The Associated Press. 

The lawsuit was filed in U.S. District Court in Kansas City, Kansas. It alleges that Applebee's didn't approve of the franchise holder's closure of the Independence restaurant or the closure of restaurants in Kansas City and Lee's Summit, Missouri, and in the Kansas cities of Lawrence and Olathe. 

The closings "left a trail of vacant buildings throughout the Kansas City area that the general public previously recognized as bustling and active Applebee's restaurants,'' the lawsuit said.