International House of Pancakes (IHOP) Franchise Cost & Fees

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Description

Since 1958, IHOP® has been the place where people connect over breakfast, enjoy study breaks, grab a bite before or after sporting events, and so much more. And no matter what menu items they order, there’s one ingredient that’s always constant — a smile. We’ve seen millions of smiles over the years in our restaurants, and now shared in photos across our social properties. In fact, smiles are so much a part of our culture that we changed our logo to include one.

This is just one of the many fun and exciting changes you can expect from IHOP®. Because we know the shortest distance between two people is a smile.

Our Story Hero

Our Corporation: An overview

For 58 years, the IHOP family restaurant chain has served our world famous pancakes and a wide variety of breakfast, lunch and dinner items that are loved by people of all ages — offering an affordable, everyday dining experience with warm and friendly service.

  • As of 2015, there were 1,650 IHOP restaurants in 50 states and the District of Columbia, as well as in Bahrain, Canada, Dubai (UAE), Guatemala, Kuwait, Mexico, Puerto Rico, Saudi Arabia, The Philippines and the U.S. Virgin Islands.
  • IHOP restaurants are franchised and operated by Glendale, California-based International House of Pancakes, LLC and its affiliates. International House of Pancakes, LLC is a wholly-owned subsidiary of Dine Brands Global (NYSE: DIN).

Our Philosophy

Everyday life has enough rules. Sitting down for a delicious, comforting meal shouldn’t have any. That’s why at IHOP®, you’re invited to be yourself and enjoy special moments with family and friends. And while we don’t have any official rules, we do have a few suggestions that are sure to make you smile.

Come as you are.

There are no airs about breakfast. No need to dress to impress. Just like home, breakfast at IHOP® is where you can be comfortable, and 100% yourself.

Savor every minute.

Say goodbye to drive-thru meals. With so many menu items, you can relax, enjoy every bite, and be inspired to take on the day. Or night.

Go with the flow.

Texting is no match for actual talking. Especially when it’s over a fresh cup of coffee. We’ll keep the coffee flowing, so you can keep the conversation going.

Be good to yourself.

A wholesome breakfast gets you going. With menu options under 600 calories, you have more choices you can feel good about.

Get it anytime.

Breakfast just for breakfast? That’s one rule we definitely don’t follow at IHOP®—and neither should you. We welcome Breakfastarians with open arms.

ihope fast food franchise

Year Business Began: 1958

Franchising Since: 1960

Headquarters: Glendale, California

Estimated Number of Units: 1,785

Franchise Description: The franchisor is IHOP Franchisor LLC. The franchisor offers several different franchise programs for full-service Restaurants which feature “IHOP” pancakes as well as a diverse menu of other breakfast, lunch and dinner items. Traditional IHOP Restaurants feature a range of “signature” “IHOP” pancakes, crepes, coffee and other offerings, as well as a diverse menu of other breakfast, lunch and dinner items. These Restaurants are in free-standing buildings or an in-line center or other traditional commercial space (a Traditional Venue). The franchisor also offers franchises for “IHOP” full-service Restaurants and new IHOP concepts being developed under the name “IHOP Express” for fast-casual and/or quick-serve Restaurants to be located at another primary business or in conjunction with other businesses or at institutional settings such as schools, colleges and universities, military and other governmental facilities, hospitals, airports, highway rest stops, toll roads, hotels, motels, arenas, travel plazas, office or in-plant food facilities, supermarkets, grocery stores or convenience stores, casinos, stadiums, shopping malls and any other site, venue or location operated by a master concessionaire or contract food service provider (Non-Traditional Venues).Training Overview: The initial training for new franchisees entering the IHOP system is comprised of a six-week program in which they train approximately 45 to 50 hours per week. The initial training program covers foundational restaurant operation skills training and IHOP Brand Standard Operating Practices. Training classes are held in franchisee-owned Restaurants at various locations around the U.S. Trainees must pass online and practical tests which include observation and testing of on-the-job performance to demonstrate knowledge and skill level to advance from the Restaurant training program to the management training program, and to graduate from management training. Additionally, trainees must successfully complete an IHOP-approved food safety certification program. While additional training and refresher courses are offered by IHOP from time to time, franchisees are not required to attend unless attendance is deemed essential by the franchisor.Territory Granted: If franchisees sign a Franchise Agreement under the Traditional Venue Single Store Development, Multi-Store Development, or Purchase Programs, they are granted a franchise to operate one Restaurant at a specific Franchised Location which is agreed upon at the time of the execution of the Franchise Agreement. So long as franchisees are compliant with the terms of the Franchise Agreement, the franchisor will not own, operate, franchise or license another Traditional Venue IHOP Restaurant within an exclusive area surrounding the Restaurant (the Franchised Area). The franchisor cannot provide any assurance as to the size or shape of the Franchised Area, as it may vary significantly depending on several factors. Franchisees will not receive an exclusive territory. Franchisees may face competition from other franchisees, from outlets that the franchisor owns, or from other channels of distribution or competitive brands that it controls. Obligations and Restrictions: Franchisees must actively participate in the day-to-day operation of the licensed restaurant or employ an IHOP trained manager to do so. Franchisees must attend and satisfactorily complete IHOP’s Training Program, unless the franchisor agrees to waive this requirement. If a franchisee is a corporation or other business entity, unless the franchisor otherwise consents, one person approved by IHOP shall at all times own directly or indirectly 51% or more of all the outstanding stock (if a corporation), all membership interests (if a limited liability company), a partner’s partnership rights (if a partnership), and 51% or more of all voting rights in the business entity. Franchisees must serve only those items and products as are expressly designated and approved in writing by the franchisor for sale and service from or at the Restaurant.Term of Agreement and Renewal: The length of the initial franchise term is equal to the term of the lease and is typically 20 years. If franchisees are compliant, and the Initial Term was for less than 10 years, they can add a Special Renewal Term; the Initial Term plus the Special Renewal Term cannot exceed 25 years. If franchisees are compliant, they can add a Renewal Term of not more than 10 years.Financial Assistance: Under the Purchase Program only, the franchisor may finance a portion of the Initial Franchise Fee. In exceptional cases, in its sole, subjective discretion, the franchisor may agree to finance the entire Initial Franchise Fee. Investment Tables: Initial Investment for a Traditional Restaurant (see FDD for Non-Traditional) Name of Fee Low High Location Fee $15,000 $15,000 Initial License Fee (less Location Fee paid) $50,000 $50,000 Real Estate $300,000 $2,500,000 Construction $450,000 $2,300,000 Major Equipment and Fixtures $200,000 $600,000 Smallware Package/Opening Order $15,000 $30,000 Signage $15,000 $100,000 Inventory $10,000 $30,000 Working Capital $10,000 $60,000 Insurance $30,000 $75,000 Site Approval Costs $1,000 $50,000 Impact Study $4,000 $6,000 Opening Training Support Fee $5,500 $16,500 POS Setup, Training and Support Fee $2,500 $5,700 Transaction Services /Oracle Hospitality eCommerce Integration Cloud Services (per year)$300$500Europay, Mastercard, and Visa (EMV) Point to Point Encryption (P2P) Services$1,000$2,000Wi-Fi Services (per month)$90$400Kitchen Display System$15,00$20,000Server Tablets$0$12,000On-Line Ordering (per month)$91$91 Initial Additional Training Expenses $4,000 $7,000 Supply Chain Co-op Stock Purchase $0 $100 Additional Funds – 3 months $16,500 $85,250 Miscellaneous $5,000 $26,000 ESTIMATED TOTAL $1,135,118 $5,977,148 Other Fees Type of Fee Amount Royalty 4.5% of total gross sales. National Advertising Fee 3.5% of gross sales. Local Advertising Fee There is currently no local advertising fee. Cooperative Advertising Same as local advertising fee. Additional Training Fee $5,000 Additional Assistance Fee $350 per day per person, plus reasonable transportation and living expenses. Audit Fee Interest on the understated or unpaid amounts due to the franchisor at the highest rate allowed by law plus cost of audit Delayed Approval Fee$170 per day Delayed Development Fee $350 per day. Dine Brands Restaurant Technology Support Center (Help Desk) $1,200 to $1,700 per year, subject to change Insurance Amount of unpaid premiums Late Fee Highest rate permitted by law or 1.5% per month, whichever is less National Gift Card Program Charges Currently, 10.42% of the redeemed portion of gift cards sold in the national program, but the amount may change Opening Training Support Fee $5,500 to $16,500, depending on number of trainers provided by the franchisee On-Location Assistance Fee $0 to $7,500 Renewal Fee $10,000 for General Renewal Term; Amount to be negotiated for Special Renewal Term Supplier/Distributor Approval Costs of sample testing plus other actual costs, such as facility inspection Transfer Fee (Franchise Agreement) $7,500 plus $5,000 training fee per Restaurant Transfer Fee (Multi-Store Development Agreement) $2,500 The above information has been taken from the FDD of IHOP. Year of FDD: 2018Franchise Direct’s Disclaimer

 

Other Fees
Type of Fee Amount
Royalty 4.5% of total gross sales.
National Advertising Fee 3.5% of gross sales.
Local Advertising Fee There is currently no local advertising fee.
Cooperative Advertising Same as local advertising fee.
Additional Training Fee $5,000
Additional Assistance Fee $350 per day per person, plus reasonable transportation and living expenses.
Audit Fee Interest on the understated or unpaid amounts due to the franchisor at the highest rate allowed by law plus cost of audit
Delayed Approval Fee $170 per day
Delayed Development Fee $350 per day.
Dine Brands Restaurant Technology Support Center (Help Desk) $1,200 to $1,700 per year, subject to change
Insurance Amount of unpaid premiums
Late Fee Highest rate permitted by law or 1.5% per month, whichever is less
National Gift Card Program Charges Currently, 10.42% of the redeemed portion of gift cards sold in the national program, but the amount may change
Opening Training Support Fee $5,500 to $16,500, depending on number of trainers provided by the franchisee
On-Location Assistance Fee $0 to $7,500
Renewal Fee $10,000 for General Renewal Term; Amount to be negotiated for Special Renewal Term
Supplier/Distributor Approval Costs of sample testing plus other actual costs, such as facility inspection
Transfer Fee (Franchise Agreement) $7,500 plus $5,000 training fee per Restaurant
Transfer Fee (Multi-Store Development Agreement) $2,500