Growth in to-go
Off-premises continues to be a strong point for IHOP, with room to expand in the future. During the last quarter, off-premises sales grew 23 percent and to-go traffic rose 13 percent.
With an improved website and new app, IHOP leadership hopes to drive more customers to order online.
“With the increasing relevance of online ordering we believe there is significant upside potential,” Rebelez said. “Best of all, online ordering isn't just more efficient; it's more profitable.”
Compared to regular to-go orders, Rebelez said, online orders are tracking about 31 percent higher.
Since IHOP launched nationwide delivery with DoorDash in July, the number of participating restaurants tripled. Delivery now accounts for 8 percent of overall sales. More than 1000 restaurants offer the service and, by the end of 2019, an additional 300 restaurants are expected to join.
“This year our focus will be on expanding our relationships with other leading delivery service providers as well as increasing marketing efforts aimed specifically at building awareness around our IHOP and Go program, and driving new and repeat off-premises business,” Rebelez said. “[It’s] another component to being where the guest is and putting more IHOP restaurants where our guests won't go.”
Where Applebee’s and IHOP differ
After opening 34 U.S. restaurants and 11 international restaurants, IHOP surpassed 1,800 units during the fourth quarter. This is one area it differs from its sister brand. While Applebee’s strategy of shuttering underperforming locations took it down 5.1 percent to 1,837 units, IHOP expanded 2.5 percent, year-over-year, to 1,831 stores. There are now more domestic IHOPs (1,705) than Applebee’s (1,693), making it the largest casual-dining brand in the country. This time a year ago, those numbers were 1,671 and 1,782, respectively.
Along with new locations, IHOP is giving existing stores a facelift. The Rise N’ Shine remodel is a modern take on the restaurant that enhances the overall experience for guests.
“Our guests were in modern comfortable restaurants that exceeds their expectations and we gave it to them with a Rise N' Shine remodel,” Rebelez said.
Remodels have gone so well that a second version of the Rise N’ Shine model with more technology is currently being tested. Guest-facing tools like tablets and wireless credit card devices will allow more efficiency and accuracy when a customer dines at IHOP.
In 2018, IHOP completed 275 remodels “bringing the total number of restaurants with the Rise N' Shine image to over 1,000 when combined with new restaurants openings,” Rebelez said.
During 2019 IHOP expects franchisees to open 35–55 new restaurants systemwide. Dine Brands chief financial officer, Tom Song, expects a majority of these to open domestically.