Parent company Dine Brands is targeting at least 12 more domestic dual-branded models this year
Inspired by the concept’s success internationally, Dine Brands has been planning to bring its dual-branded IHOP/Applebee’s model to the U.S. for about a year now. That plan came to fruition this week with the grand opening of the IHOP/Applebee’s restaurant in Seguin, Texas, just outside of San Antonio in partnership with franchisee Ramzi Hakim Group.
At least 12 more such restaurants are planned this year, underscoring parent company Dine Brands’ bullishness about the concept, which features signature dishes from both IHOP and Applebee’s on a single menu – from pancakes, eggs, and bacon to boneless wings and a full bar. The restaurant also includes some unique items mixed and matched from both brands, such as the Buffalo Chicken Omelette and the Ultimate Breakfast Burger, as well as specialty cocktails like espresso martinis and Irish coffee.
“This dual-branded model is more than just two great restaurants under one roof. It’s a vision for the future – a future of growth, of opportunity, and bringing even more communities a place where people can gather, connect, and enjoy the best of both worlds – Applebee’s and IHOP. Seguin is just the beginning, and we are so excited of what’s to come,” Ramzi Hakim Group vice president Danny Hakim during a grand opening event Monday.
The Hakim Group has been an IHOP franchisee in the San Antonio market since 1991 and now counts 37 IHOP restaurants and recently added nine Applebee’s. Hakim said the decision to add the first dual-branded location in the U.S. was a no-brainer.
“Being in a business is a risk. Those risks are what make a business successful. If you don’t try new things, you’re going to stay stagnant,” Hakim said.
Dine Brands chief executive officer John Peyton added that there’s a reason the company chose this franchisee to get the concept off the ground stateside.
“They are tremendous operators, they’re great developers, but most importantly, they understand innovation, they understand test and learn, and they understand that this is restaurant number one of what we plan for hundreds,” Peyton said. “We all got into this together knowing this was a science experiment, a prototype, and that’s why they were the right choice for this.”
To go from one to a dozen in a year is ambitious. To target “hundreds” is even more so, but, as Peyton notes, there’s a lot to like about this model. For starters, staff members are cross-trained for both menus, therefore operators aren’t adding to their labor costs. The brands’ peak rush hours don’t overlap but rather complement each other, creating an efficient back-of-house flow, which is generating twice as much revenue as a traditional standalone IHOP or Applebee’s restaurant with the same square footage in international markets.
Also, that diverse menu creates a strong consumer proposition. In the overseas locations, 50% of tickets include items from both sides of the menu.
“That tells us we’re way beyond the veto vote and that we’re attracting incremental visits,” Peyton said. “We had a methodical approach. We opened almost 20 overseas, spent two years doing it, and learned a lot of lessons we’re bringing forward here about the menu, physical design, operations, technology, we did focus groups. We wouldn’t be doing this if we didn’t think it was a good idea.”
International lessons aside, Peyton said the true consumer test has to come from actually experiencing one of the restaurants, which is why there is urgency to get a dozen or so open quickly to learn and iterate. According to Peyton, franchisee interest was so high when Dine Brands first announced its intention to bring the model to the U.S., the company had to create a waiting list.
The Seguin location just happens to be a conversion of a former IHOP located off of a busy interstate and almost halfway between San Antonio and Austin. That said, Peyton said the dual-branded restaurants could work in any market.
“We’re not going to talk about locations yet, but we’ve got a bunch in the works, and we are geographically dispersed. What I can tell you is we’ve got geographic variety across the country, we’ve got a mix of Applebee’s adding an IHOP, IHOPs adding an Applebee’s, and new construction,” Peyton said. “All of those are chosen by design so we get experience with all the different variables as we perfect the model.”
Contact Alicia Kelso at [email protected]
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