Julia Stewart, chairman and chief executive officer of IHOP, told CNBC’s “Morning Call” that franchising will re-energize Applebee’s, which IHOP is acquiring for $2.1 billion.
IHOP, which franchises nearly all of its restaurants, plans to franchise a majority of Applebee’s 508 company-operated restaurants.
Stewart said brand differentiation through the menu, service and advertising will build brand loyalty.
“We believe we have an opportunity to re-energize the brand and get franchisees, employees and guests all sort of thinking about the brand in a different way,” Stewart said Monday. “Obviously, we have opportunities to find points of differentiation – things that no one has but Applebee’s – and I think the future is very bright.”
She said the deal will be largely funded by securitizing Applebee’s royalty income stream and other operations.