IHOP 2011 Annual Report Download - page 29

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11
Composition of Franchise System
As of December 31, 2011, there were 1,499 domestic IHOP franchise and area license restaurants. During 2011, our
franchisees opened 45 domestic franchise restaurants and 8 domestic franchise restaurants were closed. The number of restaurants
held by an individual franchisee ranges from one to 153 restaurants. The table below sets forth information regarding the number
of IHOP restaurants owned by domestic franchisees as of December 31, 2011 as well as the total number of restaurants falling
into each of the listed ownership ranges.
Number of Restaurants Held by Franchisee
One
Two to five
Six to ten
Eleven to fifteen
Sixteen and over
Total (a)
Franchisees
Number
170
119
31
14
16
350
Percent of
Total
48.6%
34.0%
8.9%
4.0%
4.6%
100.0%
Restaurants
Number
170
337
238
177
577
1,499
Percent of
Total
11.3%
22.5%
15.9%
11.8%
38.5%
100.0%
________________________________
(a) Percentages may not add due to rounding.
As of December 31, 2011, there were 36 international IHOP franchise and area license restaurants. During 2011, our
franchisees opened seven international franchise restaurants and none were closed. The number of restaurants held by an individual
franchisee ranges from one to 13 restaurants. The table below sets forth information regarding the number of IHOP restaurants
owned by international franchisees as of December 31, 2011 as well as the total number of restaurants falling into each of the
listed ownership ranges.
Number of Restaurants Held by Franchisee
One
Two to ten
Greater than ten
Total (a)
Franchisees
Number
4
7
1
12
Percent of
Total
33.3%
58.3%
8.3%
100.0%
Restaurants
Number
4
19
13
36
Percent of
Total
11.1%
52.8%
36.1%
100.0%
________________________________
(a) Percentages may not add due to rounding.
Menu
The IHOP menu offers a large selection of high-quality, moderately priced products designed to appeal to a broad base of
customers. These include a wide variety of pancakes, waffles, omelets and breakfast specialties, chicken, steak, sandwiches, salads
and lunch and dinner specialties. Most IHOP restaurants offer special items for children and seniors at reduced prices. In recognition
of local tastes, IHOP restaurants typically offer a few regional specialties that complement the IHOP core menu. Our Food and
Beverage Innovation Department works together with franchisees and our Marketing Department to develop new menu and
promotion ideas. These new items are thoroughly evaluated in our test kitchen and in limited regional tests with consumers,
including operational tests, before being introduced throughout the system through core menu updates. The purpose of adding
new items and improving existing items is to broaden the appeal of our food to our guests and continually give them new reasons
to return to our restaurants. These efforts are based on consumer research, feedback and benchmarking, which help to identify
opportunities to improve existing items as well as for developing new items.
By spring of 2012, IHOP will transition from a six-week, single limited-time-offer promotional menu system to a featured
items menu handout that will last for a few months at a time, providing a broader base of news and excitement while simplifying
in-restaurant execution.