IHOP 2015 Annual Report Download - page 7

DINEEQUITY 2015 ANNUAL REPORT 5
that we will be undertaking in 2016 and beyond to change the Applebee’s
story in the marketplace.
To help us achieve our growth strategy, we welcomed key members to
the DineEquity leadership team in 2015. As Brand President of IHOP, Darren
Rebelez brings more than 25 years of experience in franchising and hospi-
tality to our organization. As Senior Vice President and Chief Information
Officer, Adrian Butler draws upon more than 20 years of experience, to lead
our Information Technology strategy, innovation and technology delivery,
as well as enhancing the organization’s digital, mobile, social media and
data capabilities focused on growing the business and enhancing the guest
experience. As Senior Vice President of Development, Jim Anhut draws upon
deep roots in brand building and development for the hotel and restaurant
categories, and most recently worked with InterContinental Hotels Group,
one of the largest hospitality franchisors in the world. Jim is working closely
with Daniel del Olmo, President of International, to share knowledge and
create momentum in domestic and international development.
EVALUATING POTENTIAL FOR FUTURE EXPANSION
DineEquity’s proven competence in franchising not only sets us apart as
a company, it also enables us to pursue opportunities. Today, increasing
numbers of franchisees start with one of our brands, and then add the
other; this reflects the great trust they place in our franchising legacy and
brand-building abilities. We have a proven track record of achieving effi-
ciencies of scale for franchisees, through entities like Centralized Supply
Chain Services, LLC, the purchasing co-op that has enabled franchisees
to realize significantly mitigated procurement and commodity costs. We
enjoy a uniquely collaborative and engaged relationship with franchisees,
and are able to solicit quality feedback and buy-in through the Franchise
Business Council at Applebee’s, Franchise Leadership Council at IHOP
and sub-committees. In short, our franchisee base, franchising capability,
business acumen and scalable Shared Services-based structure effectively
enables us to potentially expand our brand portfolio. In the next five years,
DineEquity will continue to evaluate this possibility. In doing so, we will
consider concepts that are very different than those we have now, in terms
of size, service delivery method, and potential consumers as well.
Should the right opportunity arise,
we would proceed in a fiscally
responsible manner — as with all
that we do — while prioritizing our
main objective from a capital struc-
ture standpoint: to maximize free
cash flow and return a significant
portion of it to shareholders.
I would like to express my sincere
thanks to my executive team, our
team members, franchisees, the
purchasing cooperative, vendor
partners, Board of Directors, and
to you, our shareholders, for your
continued support.
Julia A. Stewart
Chairman and Chief Executive
Officer, DineEquity, Inc.
Brand President, Applebee’s
SHAREHOLDER LETTER
• Transitioned to a 99% franchised system
• Reduced total debt by over $1 billion
• Lowered general and administrative (G&A) expenses
by approximately $50 million in the first six years since
the acquisition
• Implemented a Shared Services model to create a
more efficient, effective infrastructure
• Reduced capital expenditures
• Formed a purchasing cooperative, Centralized Supply
Chain Services, LLC
• Returned a meaningful portion of free cash to share-
holders in the form of dividends and share repurchases
since the quarterly cash dividend was restored in 2013
Since the Applebee’s
acquisition we have