Franchisees with DineEquity, the parent company of Applebee's and IHOP, operate 10 restaurants in the United Arab Emirates and will open 16 more over the next five years. The focus will be on creating a smaller footprint as competition for space continues to grow.
Applebee's and IHOP parent DineEquity reported higher-than-forecast third-quarter profits on lower costs as a result of selling more of its company-owned restaurants to franchisees. IHOP also booked its biggest same-store sales increase in five years as changes to the menu steered customers to spend more on appetizers and higher-priced entrees, resulting in higher average checks that offset traffic declines, the company said.
DineEquity has drafted preliminary deals to franchise 86 company-owned Applebee's restaurants in the St. Louis, Virginia and Washington, D.C., markets. The latest deals continue the parent company's plan to sell restaurants to franchisees to pay down debt. The company, which also owns IHOP, has refranchised 110 locations since acquiring the chain in 2007, and a deal to sell 63 additional units is expected to close later this year.
DineEquity, parent of the IHOP and Applebee's brands, is developing a centralized purchasing cooperative with its franchisees to gain an advantage in vendor price negotiations. "When you combine what Applebee's is buying with what IHOP is buying, we are a very big customer," a DineEquity spokesman said.