Returning to some of the levers in motion, IHOP’s International Bank of Packages loyalty program—the brand’s first rewards offering—launched in April 2022 and has already climbed to 6.5 million members. Customers purchase food, earn “PanCoins,” and redeem those points for coupons for more experiences at IHOP and other prizes.
The program presently accounts for about 6 percent of sales. Peyton said IHOP sees some 8,000 downloads of its app per delay, which more than 3X what it was before the chain launched in association with a loyalty program. “That’s really speaks to the level of engagement,” he said. “And now, we have the opportunity to begin to interact with these guests on a much more personal level. And obviously the goal is to drive frequency as well as share of wallet and average check.”
To point out, Fuzzy’s loyalty base, which is more than 500,000 members, mixes 12 percent of sales, giving IHOP a figure to shoot for, Peyton said.
IHOP’s culinary efforts have ramped up of late, too. It launched its largest menu evolution in brand history in March with fresh takes on Sweet & Savory Crepes, Eggs Benedicts, Ultimate Steakburgers, like a new Four-Cheese Crisp, and the return of Cinn-A-Stack Pancakes. The brand said the change was inspired by internal brand research that identified what guests were looking for.
“Pancake Tacos” arrived in July. These are best described as they sound: pancakes rolled into tacos and stuffed with fillings. Peyton himself taste-tested the product on social media. IHOP then tapped TikTok creators to weigh in whether these are, in fact, pancakes or tacos.
Peyton says IHOP sold two million of them. And likewise to the earlier point, #PancakeorTaco allowed the chain connected with younger guests.
More closures ahead as growth adjusts
Applebee’s now excepts 25–35 net fewer locations in 2023, down from the 10–20 guidance the brand previously outlined.
Moralejo, who began his tenure as new Applebee's president in January, set a three-part plan into motion that began with taking a fresh look at underperforming restaurants and ways to improve profitability, Peyton said. That lead to “some additional closures.”
He noted the pool includes older units and areas that have become “unstainable due to changes across trading area dynamics in a post-COVID world.”
Applebee’s is still looking at chances to relocate some of the underperformers and finding success in recent new builds, he added. AUVs for the class of 2022 opens annualize at nearly $4 million, which is well ahead of the system average of $2.8 million, “reflecting the compelling relevance of the brand, when it's in the right market,” Peyton said.
Applebee’s also continues to work on a more efficient design it plans to unveil new year. The prototype will incorporate the post-pandemic business model and operations efficiencies and will address inflation, he said. IHOP already has a smaller prototype in rotation that trims development figures. Additionally, about 75 percent of IHOP’s new openings and its pipeline are conversions. IHOP expects between 45 and 60 net new openings in fiscal 2023.
Moralejo said closing sagging units will open new trade areas and opportunities for Applebee’s growth. “Sometimes it's loss of property control where the franchisee is unable to renew a lease with the landlord,” he explained further. “And I think you also have to keep in mind that this is a function of opening up many, many restaurants 20 years ago, and there's cycles, right? And every year is a little bit different. In some years … you may have some more non-renewals than you did in a previous year, et cetera. So it can be a little cyclical as well.”