The largest full-service restaurant company in the world has hired a new franchising head for Canada and seeks to add some B.C.-based Applebee’s restaurants to its current 13 International House of Pancakes (IHOP) restaurants in the province.
The 3,600-restaurant dineEquity (NYSE:DIN) had operated a few Applebee’s restaurants in Port Coquitlam, Saanich and Courtenay until a couple years ago when poor performance forced them to close.
“Applebee’s will absolutely come back to B.C.,” said dineEquity’s international division president Daniel Del Olmo on September 15, during his first visit to Vancouver.
“We just hired a director of development for Canada, Peter Fisher, who is focused on finding the right franchise partners for us in markets such as Vancouver or greater markets such as B.C.”
Del Olmo told Business in Vancouver between sips of club soda at the company’s West Broadway IHOP that he believes Vancouver has great demographics for both his company’s brands – the family-dining restaurant chain IHOP and the casual dining chain Applebee’s.
DineEquity had a management shake-up in early 2013, when it created a new international division that merged both IHOP and Applebee’s international units. Del Olmo came on board and devised a five-year plan to grow the business in key countries, including Canada, across the Americas.
New Applebee’s franchisees would pay a $40,000 one-time fee on top of a 4% annual royalty for the first two years. After that, the royalty could rise to 5% of gross sales.
DineEquity also requires franchisees to spend at least 3.5% of gross sales on local marketing, advertising and public relations. Another 0.5% of gross sales goes back to the parent company to spend on marketing as well as “creative development.”
Like other restaurant chains, DineEquity has been converting corporate restaurants to franchised ones so that virtually all of its restaurants are now franchised.
Wendy's Co. (Nasdaq:WEN), for example, announced this summer that it plans to sell all 135 of its Canadian restaurants to franchisees.
Burger King Worldwide Inc. (NYSE:BKW), which recently announced plans to buy highly franchised Tim Hortons (TSX:THI), has also significantly reduced its number of corporately owned restaurants while bringing on franchisees.
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