IHOP 2015 Annual Report Download - page 24

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For most IHOP restaurants opened after 2003, the franchisee is primarily responsible for the development and financing of
the restaurant. In general, we no longer provide any financing with respect to the franchise fee, restaurant site or equipment.
The franchise developer uses its own capital and financial resources along with third-party financial sources arranged for by the
franchise developer to purchase or lease a restaurant site, build and equip the business and fund its working capital needs. We
refer to this as our “Current IHOP Business Model.”
The first restaurant in what became the Applebee’s chain opened in 1980 in Decatur, Georgia. In November 2007, we
completed the acquisition of Applebee's International, Inc., which comprised 1,455 franchised restaurants and 510 company-
operated restaurants at the time of the acquisition. Over the next five years, we refranchised the majority of the Applebee's
company-operated restaurants and realized our goal of becoming 99% franchised in each brand in October 2012. With the
refranchising in July 2015 of the remaining 23 company-operated restaurants in the Kansas City, Missouri area, we have now
refranchised all of the Applebee's company-operated restaurants and the Applebee's system is now 100% franchised.
Restaurant Concepts
Applebee's
We franchise Applebee’s restaurants in the bar and grill segment within the casual dining category of the restaurant
industry. Each Applebee's restaurant is designed as a contemporary, friendly establishment featuring high quality, moderately-
priced food, alcoholic and non-alcoholic beverage items, table service and a comfortable neighborhood atmosphere. Applebee’s
features a selection of modern American grill and bar fare, such as appetizers, bar snacks, handhelds, burgers, classic entrees
and lighter fare, as well as specialty cocktails, beers and desserts. Our signature value menu “2 for $20,” first introduced in
2009, sets the standard within the industry and continues to resonate with our guests. Our commitment to industry leading
innovation is evident behind such product platforms as “The Pub Diet - grill and bar classics made a little better for you,” our
famous “All-In Burgers,” and most recently, the introduction of our selection of handhelds - a contemporary interpretation of
grill and bar sandwiches. Each of our platforms is refreshed regularly to ensure that we are meeting the ever-changing tastes
and preferences of our guests so that they will choose to make Applebee’s their place, every day.
As of December 31, 2015, 58 franchise groups operated 2,033 Applebee’s franchise restaurants. These restaurants were
located in 49 states within the United States, in two United States territories and in 15 countries outside of the United States.
Applebee's was the largest casual dining concept in the United States in terms of 2014 system-wide sales(1).
IHOP
We franchise, own and operate restaurants in the family dining category of the restaurant industry under the names IHOP
and International House of Pancakes. IHOP restaurants feature full table service and high quality, moderately priced food and
beverage offerings in an attractive and comfortable family atmosphere. Although the restaurants are best known for their
award-winning pancakes, omelets and other breakfast specialties, IHOP restaurants also offer a variety of lunch, dinner and
snack items. IHOP restaurants are open throughout the day and evening hours. Over half of our IHOP restaurants operate
24 hours a day, seven days a week, with 205 additional restaurants operating 24 hours a day for some portion of the week. In
June 2015, we launched our first IHOP logo change in more than 20 years, as part of our ongoing commitment to evolve the
look and feel of our brands. The new logo features our recognizable blue and red color scheme, updated with a new, modern
look featuring a prominent smile. The new design was named one of the Top 10 Logo Changes of 2015 by Time Magazine. We
continue to innovate and simplify our menu, combining new, limited-time items with an update to the core menu several times
a year, introducing new items such as handcrafted Double-Dipped French Toast and Criss-Croissants.TM
As of December 31, 2015, 339 franchise groups operated 1,672 IHOP franchise and area license restaurants. These
restaurants were located in all 50 states within the United States, in the District of Columbia, in three United States territories
and in nine countries outside of the United States. We operated 10 restaurants in the Cincinnati, Ohio area, and we may also
operate, on a temporary basis until refranchised, IHOP restaurants that we re-acquire for a variety of reasons from IHOP
franchisees. There was one such restaurant included in total company-operated restaurants as of December 31, 2015. IHOP was
the largest family dining concept in the United States in terms of 2014 system-wide sales(1).
See Item 2, Properties, for the geographic location of all Applebee’s and IHOP restaurants.
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(1) Source: Nation's Restaurant News, "Special Report: Top 100," June 15, 2015.