IHOP and DineEquity Inc. Prove Casual Sector

SARASOTA – Many of us can recall when IHOP wasn’t cool. Somewhere between 1980 and 1990, the chain got into the category of undesirable. It was so much so that the chain became a joke; comedienne Paula Poundstone’s “IHOP: It was a dream, I made it happen” routine about working at an IHOP came to symbolize all that was inauthentic and sterile about America.

And then, a few weeks ago, the company opened a store on Sarasota’s Tamiami Trail. It’s a civic occasion because IHOP (and McDonald’s and Outback) seem to be the only new businesses opening up on our bit of suburban strip in this shut-down year, and everyone in town is wishing them well. They hired 125 folks when they opened the store. If this is to be a long recession, every job is precious.

The store, a franchise, explains the run-up in share price the chain has seen in recent months. IHOP is actually DineEquity (NYSE: DIN); it renamed itself after its merger with Applebee’s.

Having been at IHOP restaurants that were no better than a Lum’s, the turnaround I saw inside was a revelation. The place was packed, and the store nailed it on every single count. I thought it might be instructive to list what went right:

  • Location: They opened it in some of the best real estate in town, in an outparcel of a shopping center anchored by a Barnes & Noble and Best Buy. The location was previously a Village Inn that closed last year.
  • Hiring: The hostess outside, Roberta, was easily able to deflect annoying customers who wanted to grump about the wait. Our waitress was equally friendly. While you don’t have to be a genius to wait tables, it does require a certain stamina, and many restaurant chains do not try to hire friendly folks.
  • The Look: The decor is perfect for its market, clever but not edgy. Silkscreens of old IHOP restaurants, sketches kitchen whisks and the like are on the wall, giving a hip but homey feel to the store. It is obvious that the Glendale headquarters staff knows what it is doing. While the whole idea of IHOP is kitsch, it is no longer kitschy but now classic.
  • Nostalgia: They have  sense of the nostalgia of the IHOP brand without living in the past. Old photos are done in collages, to keep them from being backwards feeling.
  • Accountability: The manager, a polished Patrick Welenc, had his name emblazoned on the front door of the restaurant. It was obvious that the restaurant was his, as he walked from table to table to check in on patrons.
  • The customers were upper middle class. While it is Sarasota where there is lots of money, I wasn’t expecting the crowd I saw. For instance, the grandfather heading up the table next to us wore a Berkshire Hathaway polo shirt, and he had long discussions with his sons about municipal unions and bottlers while waitresses served up Rooty Tooty breakfasts.

IHOP’s success proves that the full-service family restaurant isn’t dead, by a long shot. The shakedown Americans have felt in this pullback have put people back in reality, and I feel quite certain that IHOP will be a part of that reality for a long time. If a chain can’t perform in this sector, it isn’t because of consumer trends. It’s because they can’t do the simple things that are needed to run a restaurant.

The success also bodes well for other full-service, mid-market restaurant chains that might attempt revivals in this economy. If they are done well, they can succeed.


  • Garland Pollard

    J. Garland Pollard IV is editor/publisher of BrandlandUSA. Since 2006, the website BrandlandUSA.com has chronicled the history and business of America’s great brands.

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