IHOP 2009 Annual Report Download - page 34

restaurant. For example, the QSR category includes sandwich chains, hamburger chains and other
chains.
Applebee’s competes in the casual dining segment against national and multi-state operators such
as Chili’s, T.G.I. Friday’s and Ruby Tuesday’s, among others. In addition, there are many independent
restaurants across the country in the casual dining segment. Casual dining restaurants offer full table
service and typically have bars or serve liquor, wine and beer. Applebee’s is the largest casual dining
brand in the world, in terms of number of restaurants and market share.
IHOP competes in the family dining segment against national and multi-state operators such as
Denny’s, Cracker Barrel Old Country Store, Bob Evans Restaurants and Perkins Restaurant and
Bakery. In addition, there are many independent restaurants and diners across the country in the family
dining segment. Family dining restaurants offer full table service, typically do not have bars or serve
liquor, and usually offer breakfast in addition to lunch and dinner items. IHOP is the largest family
dining brand in the world, in terms of number of restaurants and system-wide sales.
The restaurant business is highly competitive and is affected by, among other things, economic
conditions, price levels, on-going changes in eating habits and food preferences, population trends and
traffic patterns. The principal bases of competition in the industry are the type, quality and price of the
food products served. Additionally, restaurant location, quality and speed of service, advertising, name
identification and attractiveness of facilities are important.
The market for high quality restaurant sites is also highly competitive. We and our franchisees
often compete with other restaurant chains and retail businesses for suitable sites for the development
of new restaurants.
We also compete against other franchising organizations both within and outside the restaurant
industry for new franchise developers.
Trademarks and Service Marks
We own the rights to the ‘‘Applebee’s Neighborhood Grill & Bar’’ service mark and certain
variations thereof and to other service marks used in our Applebee’s system in the United States and in
various foreign countries. In addition, we own trademarks and service marks used in the IHOP system,
including ‘‘International House of Pancakes,’’ ‘‘IHOP’’ and variations of each, as well as ‘‘The Never
Empty Coffee Pot,’’ ‘‘Rooty Tooty Fresh ‘N Fruity,’’ ‘‘Harvest Grain ‘N Nut,’’ and ‘‘Come Hungry,
Leave Happy.’’ We have registered or applied to register our material trademarks and service marks
with the United States Patent and Trademark Office. We also register new trademarks and service
marks from time to time. We will protect our trademarks and service marks by appropriate legal action
when necessary.
Seasonal Operations
We do not consider our operations to be seasonal to any material degree.
Government Regulation
We are subject to Federal Trade Commission (‘‘FTC’’) regulation and a number of state laws
which regulate the offer and sale of franchises. We are also subject to a number of state laws which
regulate substantive aspects of the franchisor- franchisee relationship. The FTC’s Trade Regulation
Rule on Franchising, as amended (the ‘‘FTC Rule’’), requires us to furnish to prospective franchisees a
Franchise Disclosure Document containing information prescribed by the FTC Rule.
State laws that regulate the offer and sale of franchises and the franchisor-franchisee relationship
presently exist in a number of states. State laws that regulate the offer and sale of franchises require
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