What's Happening?
Dine Brands is advancing its strategy to expand the co-branded Applebee's and IHOP restaurant concept, aiming for 900 locations over the next decade. The dual-brand format, which features separate seating
zones for each restaurant, has shown promising results, with sales nearly tripling at the first U.S. location in Seguin, Texas. Currently, there are 15 domestic and 20 international dual-branded units, with plans to open 30 more by the end of the year and an additional 50 in 2026. The concept leverages the strengths of both brands, with IHOP focusing on morning and early afternoon business and Applebee's on evening and late-night dining, creating a full-day revenue model. Franchisees have expressed strong interest, particularly IHOP operators looking to diversify their offerings.
Why It's Important?
The expansion of the dual-branded Applebee's/IHOP restaurants represents a significant shift in the casual dining industry, offering a new model that maximizes revenue across all dayparts. This strategy could lead to increased efficiency and profitability for franchisees, as it allows for better utilization of staff and resources. The move also reflects broader industry trends towards value-driven dining experiences, as consumers become more deliberate in their spending. By combining two iconic brands, Dine Brands is positioning itself to capture a larger share of the market, potentially setting a precedent for other restaurant chains to follow.
What's Next?
Dine Brands plans to continue its aggressive expansion of the dual-branded concept, with a focus on conversions and new builds in suburban areas that can support multi-daypart demand. The company is also investing in remodels and dual-brand conversions, which are expected to impact quarterly financials but are aimed at long-term growth. Franchisees are reporting strong post-remodel sales lifts, and the company expects to surpass its target of 100 Applebee's remodels by year-end. As the strategy gains momentum, Dine Brands is committed to strengthening brand relevance and driving long-term growth.
Beyond the Headlines
The dual-branded restaurant model not only offers operational efficiencies but also presents opportunities for cultural and community engagement. By refreshing older buildings and introducing new concepts, Dine Brands can attract new guests and enhance the dining experience. The focus on value-driven platforms aligns with consumer trends towards affordable dining options, potentially increasing customer loyalty and frequency. This approach may also influence other casual dining chains to explore similar strategies, reshaping the industry landscape.
