TWO beloved American restaurants will soon merge at 15 locations to offer customers the ultimate dining experience.
As dual-branded IHOP-Applebee’s restaurants pop up across the US, customers can score breakfast, lunch, and dinner favorites under one roof.
Foodies will soon be able to order off the menu of two beloved American chains under one roof[/caption]
Dine Brands Global was founded in 2007 when breakfast giant IHOP acquired the American favorite, Applebee’s.
The franchisor plans to transform an IHOP in Seguin, Texas – 35 miles east of San Antonio – into the first dual-branded IHOP-Applebee’s in the US.
The IHOP will close for renovations on November 10 and the transformation will take place in the first quarter of 2025, per a statement emailed to Restaurant Dive.
Dine Brands Global has its eyes on 15 US locations to develop dual-branded restaurants with expectations to open around 12 of them next year, the company’s CEO John Peyton shared on an earnings call.
Dine Brands Global plans to open 15 dual-branded IHOP-Applebee’s units in the US[/caption]
The company already operates 13 dual-branded IHOP-Applebee’s restaurants in Latin America.
These typically bring in 1.5 to two times the sales of a standalone IHOP or Applebee’s.
Dine Brands Global hopes combining the two restaurants at US locations will help boost sales, as Applebee’s and IHOP’s sales fell 5.9% and 2.1%, respectively, during recent months.
LOOKING FORWARD
The company’s CEO said in a statement that merging the two chains permits Dine Brands Global to leverage the strengths of each restaurant.
“It allows IHOP to shine in the morning and Applebee’s to thrive in afternoons and evenings,” said Peyton.
“The menu leverages each brand’s unique offerings to maximize dayparts and provide more choices, variety, and value to guests.”
The CEO noted that the main strength of the dual-branded units lies not in its appeal to diners, but rather the operational logistics of the concept.
“It’s really a B-to-B product in the sense that it’s got complimentary dayparts, a shared kitchen, a common menu, cross-trained staff,” said Peyton on the earnings call.
He added that the logistical advantages may help improve unit economics and potentially help struggling restaurants avoid closure.
Peyton suggested that the dual-branded IHOP-Applebee’s restaurants offer more opportunities for its developers, especially in regions where space is limited for expanding one brand.
This strategy is hoped to reverse the trend of shrinking restaurant numbers for IHOP and Applebee’s, as both brands are expected to see a net decrease in units this year.
The CEO predicted that Applebee’s would benefit more in the near term as most of the locations targeted for transformation into dual-branded units are currently IHOP restaurants.
It allows IHOP to shine in the morning and Applebee’s to thrive in afternoons and evenings. The menu leverages each brand’s unique offerings to maximize dayparts and provide more choices, variety, and value to guests.”
John Peyton
DELICIOUS DEALS
Aside from its dual-branded unit initiatives, Dine Brands Global is enacting other shorter-term strategies to combat its sales and traffic struggles.
The CEO noted that sales were down compared to the period when strong promotions, such as the all-you-can-eat wings at Applebee’s and the all-you-can-eat pancakes and kids eat free at IHOP, were offered.
To combat the downward trend, Applebee’s has partnered with the NFL and introduced a $9.99 burger and fries deal.
Applebee’s brand president Tony Moralejo acknowledged that the results indicated a need for Applebee’s to change its approach to value.
“We can no longer rely on what worked so well for us in the past,” he said.
The chain is developing an “integrated value platform” that could “kickstart a new cycle of traffic, of sales growth for the entire Applebee’s system.”
Dine Brands Global already operates over a dozen dual-branded IHOP-Applebee’s restaurants outside the US[/caption]
For example, Peyton teased the upcoming launch of the “Real Big Meal deal” which will include the choice of a new big entree or fan favorite and a drink at “an attractive price point.”
At IHOP, Dine Brands Global hopes that menu innovations will improve sales.
Peyton noted the launch of Anytime Tacos in September and the update to parts of its menu, including breakfast burritos.
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Plus, Sam’s Club brought back its “showstopper” fan-favorite dish for just $7.88 – but you can only get it for a limited time.
