Several big names in the restaurant industry entered the loyalty space in 2021, including McDonald’s, Burger King, and Jack in the Box. On the full-service side, Logan’s Roadhouse and Red Robin both rolled out new loyalty programs and apps.
About 80 percent of adults—90 percent for Gen Z and millennials—said they’d probably join a loyalty program if it was offered at their favorite local restaurant, according to the National Restaurant Association’s 2022 State of the Industry.
“It’s a way also for us to engage with our fans, we will say at breakfast, and get them to come at another time of the day, so we can expand our base to other dayparts,” Johns said.
The off-premises business provided a boost for IHOP in Q4 as it strives for positive growth once again. Domestic same-store sales declined 3 percent and 1 percent in October and November compared to 2019, respectively, but dropped even further to 4.6 percent in December. Negative sales were attributed to Omicron, labor shortages, and rolling over the high-performing Addams Family promotion in 2019. Average weekly sales were $37,500, which was 0.5 percent above 2019 levels.
Currently, stores are 85–90 percent staffed and 86 percent of restaurants are holding standard operating hours, up 3 percentage points from Q3. About 26 percent are open 24/7, which is consistent with the third quarter. Johns said it’s a step-by step process; franchisees typically move to 24/2 (24/7 on the weekend) before extending hours throughout the week.
“I'm confident we'll get back to the pre-pandemic level, but I just can't give you an answer to exactly when that will be,” Johns said. “Clearly, the pandemic is waning. I think that staffing is improving slowly and we're getting back to full standard operating hours. … It is slowly getting better. And I think that once we get to kind of the full operating hours of the standard business, you'll have franchisees that will start opening more and more.”
Dine Brands is in the process of implementing a new POS system to improve the in-restaurant experience for both employees and customers. The technology involves a new kitchen management system and servers using tablets, meaning more tables and higher earnings potential.
IHOP is rolling out its system this year while Applebee’s will do the same in 2023. Peyton said technology will streamline front and back-of-house operations for franchisees and build top-line growth.
“On weekends when [IHOP restaurants] got 90-minute waits, turn tables faster,” Peyton said. “That benefits us, as well. So the technology benefits Dine, as well as the franchisees.”
IHOP finished 2021 with 1,657 stores domestically, or a net decrease of 13 units year-over-year. In 2022, the breakfast brand expects net new expansion between 50 and 65 restaurants.