Dine sees room to pair Applebee’s and IHOP at 900 more locations

Dine Brands sees roughly 900 opportunities to pair Applebee’s and IHOP over the next decade. It identified 450 opportunities to build in markets where neither chain operates and 450 existing restaurants that could add the other brand. Both groups met Dine’s test for protecting existing franchise territories. The estimate did not specify how many projects franchisees had signed. Dine’s March 2 remarks.

On March 11, CEO John Peyton counted 35 or 36 U.S. dual-brand restaurants and expected about 80 by year-end 2026. Franchisees were putting up their own money, he said. Higher restaurant sales would bring Dine more royalties. March 11 investor conference.

How the two brands share a restaurant#

Ramzi Hakim Group, a franchisee of both chains, opened the first U.S. Applebee’s-IHOP on February 18, 2025, in Seguin, Texas, near San Antonio. The format already had a presence outside the United States. As of September 30, 2024, Dine franchised 13 such restaurants across Canada, Mexico, Honduras and the Middle East. At the Seguin opening, Dine forecast 14 more U.S. restaurants through 2026, including conversions and new builds. Dine’s opening announcement and forecast.

In Seguin, diners could choose the Applebee’s side or the IHOP side and place the same order in either. The two dining rooms shared a host stand and a kitchen. Pancakes and boneless wings were available together from morning into late evening. The opening menu also featured a dish created for the combined restaurants, a Buffalo Chicken Omelette. Dine’s description of the menu and dining room.

By the end of fiscal 2025, conversions accounted for nearly the entire U.S. group. Of the 27 sites operating on December 28, 26 had added a brand to an existing restaurant. Only one new restaurant opened with both. Each brand has its own franchise agreement, so Dine recorded one opening for each conversion and two for the new restaurant. That gave the chains 28 brand openings across 27 U.S. locations. Dine’s 2025 Form 10-K, page 31.

Overseas, Dine went from 18 dual-brand restaurants at the end of fiscal 2024 to 32 a year later. Ten existing restaurants added a brand in 2025 and four new sites opened with both. Those 14 additions produced 18 brand openings in Dine’s accounts. Across the U.S. and international groups, five of the 41 locations that went dual-brand that fiscal year opened as new restaurants. At the other 36, customers could already eat at one of the chains at that address. Fiscal year-end restaurant data.

What a conversion costs a franchisee#

Dine said early conversions sold 1.5 to 2.5 times what those same restaurants had sold with one brand. An IHOP could add Applebee’s dinners at a site where it already paid rent. The combined menu was about the size of either chain’s menu alone. On March 2, Dine said roughly two in three checks included items from both. Dine on sales and orders.

Chief Financial Officer Vance Chang said most early conversions probably came from lower-volume restaurants. His example assumed an extra $1 million in sales, with 30% to 40% left after the cost of serving those customers. That would put $300,000 to $400,000 toward recovering a renovation that Chang estimated at about $1 million, depending on the site. He put payback at roughly three years. A franchisee building from scratch would have to budget for the whole restaurant. Chang’s March 11 remarks.

Correction, November 4, 2026. An earlier version placed the first dual-brand restaurant in New York City and misspelled John Peyton’s surname as Payton. International restaurants preceded the U.S. debut in Seguin. We described 900 potential projects as planned openings and gave an unsupported new-build cost estimate. We also reported without support that restaurant margins had nearly doubled. The original said guests had access to both full menus. The restaurants offered a combined selection, and the sales comparison was with each restaurant’s own revenue before conversion.