Risk Score
Pending analysis
Investment Range
$434,598 - $5,196,265
Franchise Fee
$15,000
Total US Locations
1,703
Business Summary
IHOP Franchisor LLC offers two types of restaurants at non-traditional venues. Under the Full-Service Program, IHOP operates family-style restaurants that feature a full menu of "IHOP" pancakes and other breakfast, lunch, and dinner items. Under the IHOP Limited-Service Program, IHOP Express Restaurants are offered in quick-serve or fast-casual formats, featuring a more limited menu of signature "IHOP" pancakes, coffee, and other breakfast, lunch, and dinner options. These restaurants are typically located within another primary business or institutional settings. IHOP is also testing a co-branded concept called Dual Brand Restaurants, which combine IHOP and Applebee's menu items with full table service.
Corporate History
IHOP Franchisor LLC was formed on July 28, 2014, as a Delaware limited liability company and is a subsidiary of Dine Brands Global, Inc. The IHOP brand itself, known as "International House of Pancakes," has been offering franchises through various affiliated entities since 1958. These predecessor entities included International House of Pancakes, Inc. (1960-2007), IHOP Franchising, LLC (2007-2009), and IHOP Franchise Company, LLC (2009-2011), which later merged with IHOP LLC. IHOP LLC continued franchising from 2011 until September 2014. IHOP Franchisor LLC assumed responsibility for all new domestic franchise sales for IHOP Restaurants and IHOP Express Restaurants at non-traditional venues starting October 1, 2014. The company has also been developing and testing Dual Brand Restaurants, a co-branded concept that features combined IHOP and Applebee's menu items.
Financial Overview
Investment Range
$434,598 - $5,196,265
Franchise Fee (Low)
$15,000
Franchise Fee (High)
$35,000
Royalty %
4.5%
Marketing %
3.5%
Equipment Costs (Low)
$357,500
Equipment Costs (High)
$4,466,700
Working Capital
$102,500
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
IHOP Franchisor LLC relies on its parent company, Dine Brands Global, Inc., for managing its cash flow. All operating revenues are collected by its parent, and operating expenses are paid by affiliated entities. The net balance of these related party transactions is categorized within member's equity and will not be settled until the securitization structure of the parent company is dissolved. The independent auditors did not identify any conditions or events that raise substantial doubt about IHOP Franchisor LLC's ability to continue as a going concern.
Financing Details
IHOP Franchisor LLC does not offer any direct or indirect financing to franchisees. It also does not guarantee any franchisee notes, leases, or other obligations.
Performance Metrics
Total US Locations
1,703
Franchised Units
1,703
Corporate Units
0
Avg Square Footage
2,900
Franchising Since
1958
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
Yes
Litigation Count
24
Litigation Summary
IHOP Franchisor LLC has been involved in several legal disputes. Historically, IHOP has been a party to 18 concluded litigation cases. These cases involved various claims such as breach of contract, misrepresentation, violation of business and profession codes, alleged ADA violations, antitrust claims, trademark infringement, and bankruptcy proceedings against franchisees. For example, in Irvine Food Corp. v. Dine Brands Global, Inc. et al., filed in 2019, arbitrators found in favor of Dine Parties on all claims. In Himelda Mendez v. IHOP Restaurants LLC, filed in 2019, an ADA class action lawsuit concerning Braille on gift cards was settled for $7,000. IHOP also engaged in actions to enforce termination rights against franchisees, such as in IHOP Restaurants LLC v. Moeini Corporation, which resulted in a preliminary injunction against the franchisee. Many of these historical cases involved disputes with franchisees over operational failures, contract compliance, or intellectual property use. More recently, in February 2025, IHOP Restaurants LLC and IHOP Leasing LLC filed six separate temporary restraining order and eviction actions in federal and state courts against three franchisees (PAHOP, LLC, 1471, L.C., and 1930 LLC) after the expiration of their franchise agreements and subleases and subsequent failure to turn over the restaurants. All these recent actions were dismissed without prejudice upon the franchisees' turnover of the restaurants on February 20, 2025.
Bankruptcy History
IHOP Franchisor LLC itself does not have a bankruptcy history. However, its Chief Financial Officer, Vance Chang, previously served as CFO of YogaWorks, Inc. from November 2019 to June 2021. YogaWorks, Inc. filed for Chapter 11 bankruptcy on October 14, 2020, due to COVID-19-related business pressures.
Agreement Terms
Initial Term
5 years
Renewal Term
5 years
Renewal Conditions
IHOP Franchisor LLC's franchisees can renew their Non-Traditional Restaurant Franchise Addendum (NT FA) up to two times, each for a term of up to five years. To qualify for renewal, franchisees must have fulfilled all their obligations under the NT FA and any other agreements with IHOP. They must also have the right to continue occupying the restaurant's location and pay the current renewal fee, which is $5,000. Additionally, franchisees cannot have received three or more notices of default within any 24-month period during the initial term. Franchisees must also provide satisfactory written assurance of their willingness and financial ability to refurbish and remodel the restaurant according to IHOP's then-current standards before the location expiration date, unless the facility prohibits such updates. If the franchisee renews, they will be required to sign IHOP's then-current form of NT FA, which may contain materially different terms.
Training & Support Program
Franchisor Assistance
IHOP Franchisor LLC provides comprehensive assistance to its franchisees. Before a restaurant opens, IHOP assists with site selection by furnishing information and reviewing proposed sites for approval. It also provides standard prototypical plans and specifications for restaurant construction, equipment, and signs. For training, IHOP requires each restaurant to have two Certified Leaders who undergo a six-week SMILE Leadership program covering foundational skills, standard operating procedures, and management. Training fees for the first two Certified Leaders of the first restaurant, and for up to two Certified Leaders of the second restaurant, are waived. IHOP also provides Initial Opening Training for each restaurant, with IHOP-provided NRO Trainers for the first two restaurants and a decreasing number thereafter. Franchisees pay an Opening Training Support Fee between $0 and $65,000 for Full-Service Restaurants and $0 and $7,000 for Limited-Service Restaurants, depending on the number of trainers. IHOP also offers POS setup, training, and support, with onsite implementation for the first three restaurants and remote options thereafter. During operation, IHOP manages a National Advertising Fund, to which franchisees contribute up to 3.5% of gross sales, for advertising campaigns and administrative expenses. IHOP also sets Local Advertising Expenditure Requirements for franchisees (0% to 1% of gross sales). IHOP provides access to Operations Manuals with detailed standards and procedures. Franchisees must also comply with IHOP's approved POS computer systems, mobile device management, online ordering systems, and EMV/P2P payment processing solutions. IHOP conducts routine food safety evaluations (FSE) twice a year and covers these costs in 2025. It also provides internet bandwidth and Wi-Fi services guidelines. IHOP operates a loyalty program (International Bank of Pancakes) primarily funded by the National Advertising Fund, and franchisees must honor customer coupons earned through this program.
Initial Training Hours
316
Training Location
Various locations throughout the United States and virtually
Ongoing Support
IHOP Franchisor LLC provides ongoing support to its franchisees after the restaurant opens. This includes administratively managing a National Advertising Fund for marketing and promotional campaigns and providing annual summary information on its receipts and expenditures. IHOP makes Operations Manuals accessible, which are revised periodically with updated standards and procedures. Franchisees also receive technology support for POS systems, mobile device management, online ordering integration, and EMV payment processing. IHOP conducts routine food safety evaluations twice a year, covering the costs in 2025. In case of audit failures, reaudits are conducted at the franchisee's expense. The company also administers a guest experience survey program for all franchisees. Additionally, IHOP provides guidance on internet bandwidth and Wi-Fi services and manages the IHOP Loyalty rewards program, which franchisees are required to participate in. Franchisees may also be required to attend up to two leadership training events per year, which can be virtual or in-person, without an attendance fee for mandatory events.
Franchise Requirements
Ideal Candidate Profile
IHOP Franchisor LLC seeks franchisees and owners with significant experience operating similar restaurants, whether under the IHOP brand or other brands. Ideal candidates should possess strong financial, operational, and general business knowledge, demonstrating the capability to evaluate risks, construct, and independently operate an IHOP restaurant in a non-traditional venue. If the franchisee is a certified manager, they must actively participate in the day-to-day operations and employ an additional IHOP-certified leader. For corporate or entity franchisees, one IHOP-approved person must own at least 51% of the voting rights and hold a comparable top management position.
Industry Experience Required
Yes
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
retail
Owner Participation
hands-on
Territory Type
non-exclusive
Staffing Notes
IHOP Franchisor LLC requires each restaurant to have two Certified Leaders who are trained and certified in day-to-day IHOP operations. One of these leaders must be the franchisee or their IHOP-approved designated representative if actively involved in daily operations. These Certified Leaders are responsible for running the restaurant in accordance with IHOP's Standard Operating Procedures and legal and health requirements. If a Certified Leader is replaced, a substitute must be certified within 60 days. IHOP also provides NRO Trainers for Initial Opening Training, with the number of IHOP-provided trainers decreasing for franchisees opening their third or subsequent restaurants, requiring the franchisee to provide more of their own approved NRO Trainers. Franchisee-provided trainers must be certified and follow the training plan. IHOP also reserves the right to require franchisees, designated representatives, and Certified Leaders to attend up to two leadership training events per year.