It looks like fans of two major restaurant chains will soon have the best of both worlds.
Applebee's and IHOP are joining forces to open dual-brand locations in the U.S. after eight prototypes of the concept opened in international markets, according to a recent report. earnings call of Dine Brands Global, the parent company of both restaurant chains.
“We just opened the eighth dual-brand restaurant in Leone, Mexico, just outside of Mexico City,” Dine Brands global CEO John Peyton said during the call. “You know, the concept is a shared back-of-house and front-of-house combined and combined for the two brands.”
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Peyton also claimed that revenue from dual-branded locations is “twice or more” than before, when the brands had separate locations.
“What we are seeing on average is that the revenue for boxes of the same size of one brand or another is twice or more than what it was before, which would be expected, because with the two brands we can address all four parts of the day. and that's a great innovation that we're fostering overseas and that we intend to eventually bring to the U.S. when we find the right opportunity to introduce it,” Peyton said during the call.
While speaking with Nation's Restaurant News, Peyton also revealed that dual-branded locations even offer more seating to customers looking to eat at either restaurant.
“At breakfast, when there are more IHOP customers, customers can sit in the Applebee's area and vice versa during dinner,” Peyton said.
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Dine Brands Global's move is a page out of Dunkin' Brands' book when it began opening new stores sometime between 2013 and 2015 that combined its Dunkin' Donuts and Baskin-Robbins brands in dual-branded locations.
The plan to expand the idea of putting Applebee's and IHOP under one roof also comes amid Dine Brands Global's battle with declining revenue. In Dine Brands Global's fourth quarter earnings reportwhich was released on February 28, the company revealed that total revenue for 2023 was $831.1 million, down from the $909.4 million it earned in 2022.
The company states in the report that the revenue decline “was primarily due to the refranchising of the 69 company-operated Applebee's units in October 2022.”
In the fourth quarter of 2023 alone, Applebee's faced a decline in sales. The restaurant's year-over-year comparable sales decreased 0.5%.
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