Two popular restaurant chains, Applebee's and IHOP, might start sharing their dining spaces. The same company owns these well-known eateries and is considering a plan to combine their locations. This change could transform how their restaurants look and operate.
Applebee's and IHOP Test Shared Restaurant Concept
Dine Brands CEO John Peyton revealed that the company has experimented with combining Applebee's and IHOP into one dining space. This new approach has been trialed in eight "prototype" locations worldwide, including a recent opening in Leon, Mexico.
Peyton told CBS News that Mexico is one of the company's most significant international markets. According to him, the innovative Applebee' s-IHOP combined restaurant, which started welcoming guests in January 2024, offers a promising path for growth.
Peyton emphasized the company's plan to monitor the success of this joint concept. Depending on its success, similar models might be introduced in select U.S. locations, with further expansion only if they prove beneficial.
The CEO of Dine Brands has unveiled a new dining concept featuring "discrete entrances" for Applebee's and IHOP, yet allowing customers the flexibility to move between the two once inside.
This innovative approach has introduced operational benefits, notably impacting managing customer wait times.
Customers can be seated in the Applebee's section during breakfast hours, typically seeing more IHOP patrons. The arrangement reverses for dinner, catering to Applebee's guests in the IHOP area. This flexibility improves the dining experience and optimizes space usage throughout the day.
The CEO highlighted the financial success of this unique setup, noting that these dual-brand locations have doubled their profits compared to traditional single-brand sites. This significant increase in earnings is attributed to the concept's ability to cater to customers across all four key meal times, making these combined locations particularly successful in their respective markets.
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New Dining Concept Merges Applebee's and IHOP
Dine Brands introduces a unique dining setup where co-branded units feature a shared kitchen but maintain two separate entrances: one for Applebee's and another for IHOP. The dining space is divided inside to ensure each restaurant brand keeps its distinct identity. CEO Peyton emphasized the importance of preserving each brand's unique appeal, aiming to avoid a blend into a "common color of brown."
This co-branding concept isn't new and was popular in the early 2000s. However, it faced setbacks due to operational and marketing challenges, leading to several closures. Recently, the trend has seen a resurgence, with companies like GoTo Foods (formerly Focus Brands), which owns Famous Dave's and Auntie Anne's, revisiting the strategy.
Dine Brands acknowledges that it is still fine-tuning the operational aspects, such as facilitating orders from different menus for customers within the same group. Yet, the company is optimistic about this model's benefits to franchisees. Peyton mentioned plans to collaborate with one or two operators in the U.S. to start opening these co-branded locations next year.
This initiative could be a critical move for Dine Brands, whose development plans have struggled to meet the ambitious goals set in 2021. Despite projections for growth, Applebee experienced a net decrease in units, and IHOP also did not achieve its development targets, highlighting the need for innovative approaches to revitalize the brand.
Related Article: Applebee's Continues Downsizing, Closes Another Veteran Location as Part of Nationwide Cutbacks
