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A joint Applebee's/IHOP could be coming to a neighborhood near you

Applebee's and IHOP currently operate eight joint locations in Mexico that share operations, boosting revenue while minimizing costs.
The exterior of an Applebee's.
Posted at 7:38 AM, Mar 07, 2024

Applebee's has seen its footprint shrink throughout the U.S. in recent years. Its parent company, Dine Brands, might have a solution to help regrow the brand. 

In a recent call with investors, Dine Brands CEO John Peyton said the company intends to open locations where IHOP and Applebee's share a location. 

The company has tried out joint locations in Mexico, recently opening its eighth dual-brand restaurant in Leone, just outside of Mexico City. 

"The concept there is a shared back of house and a combined and blended front of house for the two brands," Peyton said. 

With IHOP more of a breakfast spot while Applebee's caters to a lunch and dinner crowd, combining brands can help spread customers throughout the day. 

"What we are seeing on average is that the revenues for the same size box as one brand or the other is two times or more what it was before, what you would expect, because with the two brands, we can address all four day parts and that is a big innovation that we are nurturing overseas and that our intent is to eventually bring to the U.S. when we find the right opportunity to introduce it," Peyton said. 

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A Wendy's sign is shown.

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As of the end of 2023, Applebee's had 1,536 U.S. locations, which is down from the end of 2022, when it had 1,569. 

The concept of merging restaurant concepts into one location is not a completely new idea. For instance, Focus Brands, the parent company of Auntie Anne's, Carvel, Cinnabon, Jamba, McAlister's Deli, Moe's Southwest Grill and Schlotzsky's, boasted last year about expanding its footprint of dual-branded restaurants. 

The company had opened dozens of Auntie Anne's and Cinnabon combined locations, primarily in shopping centers. But last year, the company announced plans to open a joint Cinnabon/Carvel location. 

"Dual branding is the future of our brands, especially on the specialty side of the business," said Brian Krause, chief development officer at Focus Brands. "There will always be a place in malls, but there is an immense amount of growth opportunity in streetside venues, and, by dual branding, there is more opportunity for enhanced revenue."