IHOP 2010 Annual Report Download - page 22

outside of the United States. We have assigned development rights to the vast majority of domestic
areas in all states except Hawaii and the company-operated markets.
Domestic Franchising
As of December 31, 2010, there were 1,553 domestic Applebee’s franchise restaurants. During
2010, 14 domestic franchise restaurants opened, 14 domestic franchise restaurants closed and 83
company-operated restaurants were franchised. The number of restaurants held by an individual
franchisee ranges from one to 269 restaurants. The table below sets forth information regarding the
number of Applebee’s restaurants owned by domestic franchisees as of December 31, 2010 as well as
the total number of restaurants falling into each of the listed ownership ranges.
Franchisees Restaurants
Percent Percent
Number of Restaurants Held by Franchisee Number of Total Number of Total
One to Ten ......................................... 10 23% 61 4%
Eleven to Twenty-Five ................................. 14 33% 260 17%
Twenty-Six to Fifty .................................... 10 23% 381 25%
Fifty-One to One Hundred .............................. 7 16% 479 31%
One Hundred-One and over ............................. 2 5% 372 24%
Total(a) ............................................ 43 100% 1,553 100%
(a) Percentages may not add due to rounding.
International Franchising
We continue to pursue franchising of the Applebee’s concept as the primary method of
international expansion. To this end we seek qualified franchisees that possess the resources needed to
open multiple restaurants in each territory and are familiar with the specific local business environment
in which they propose to develop and operate Applebee’s restaurants. We currently are focusing on
international franchising primarily in Canada, Mexico, Central and South America, and the
Mediterranean/Middle East.
We work closely with our international franchisees to develop and implement the Applebee’s
system outside the United States, recognizing commercial, cultural and dietary diversity. Differences in
tastes and cultural norms and standards mean we need to be flexible and pragmatic regarding many
elements of the Applebee’s system, including menu, restaurant design, restaurant operations, training,
marketing, purchasing and financing.
As of December 31, 2010, there were 30 international franchisees with 148 Applebee’s restaurants;
the number of restaurants operated by individual international franchisees ranged from one to 22.
During 2010, 13 new international franchise restaurants were opened while four international franchise
restaurants were closed. The success of further international expansion will depend on, among other
things, local acceptance of the Applebee’s concept and menu offerings and our ability to attract
qualified franchisees and operating personnel. Our franchisees must comply with the regulatory
requirements of the local jurisdictions.
Franchise Operations
We continuously monitor franchise restaurant operations, principally through our Franchise Area
Directors and our Directors of Franchise Operations. Company and third-party representatives make
both scheduled and unannounced inspections of restaurants to ensure that only approved products are
in use and that our prescribed operations practices and procedures are being followed. We have the
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