IHOP & Applebee's May Join Forces to Open 'Co-Branded' Restaurants
Two major restaurant chains may soon come together as a joint restaurant concept. In a recent fourth-quarter earnings call, Dine Brands Inc., the parent company of Applebee's and IHOP, announced plans to open dual-branded restaurants as part of its growth efforts.
Dine Brands currently operates eight of these restaurant prototypes internationally and most recently opened one in Leon, Mexico, in January. John Peyton, the company's CEO, said this "represents a compelling opportunity for further growth since Mexico is one of [the company's] largest international markets."
As the CEO noted during the earnings call, these restaurants have shown to make twice as much revenue as standalone Applebee's and IHOP locations. He said this is expected because the concept "addresses all four dayparts," referring to the times that meals are served.
Looking ahead, Peyton told CBS News that Dine Brands will "continue to monitor the success of this test concept" and consider U.S. expansion in select locations "if and when it makes sense to do so." Nation's Restaurant News reported that the company aims to bring this restaurant concept to the U.S. in the next 12 to 24 months. This means customers could dine at an IHOP/Applebee's restaurant as early as the first quarter of 2025.
The dual-branded restaurants have a shared back-of-house and combined front-of-house. Peyton told Nation's Restaurant News that while these locations have "discrete entrances," customers can "flow" between both spaces. In other words, this restaurant concept allows for more seating if needed. For instance, if there are more IHOP customers during breakfast hours, they can sit in the Applebee's section of the restaurant, while Applebee's customers can sit in the IHOP dining area during dinner, Peyton said.
In addition to this joint venture between IHOP and Applebee's, there are several other combinations of dual-branded restaurants. A few of these include Taco Bell and Pizza Hut, Taco Bell and KFC, and Cinnabon and Auntie Anne's.
In 2023, Applebee's closed 46 locations and opened 10 new ones. Tony Moralejo, Applebee's president, said these closures "aren't a sign of struggling franchisees," but are rather "offering a sign of struggling trade areas." Going forward, Dine Brands expects to close 25 to 35 Applebee's restaurants and open 15 to 25 IHOP locations in 2024.
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