Dine Brands Grows Revenue by Buying Its Franchisees' Restaurants

Dine Brands grew revenue 15% last quarter. Almost none of that growth came from franchising.

Total revenue rose to $248.9 million from $216.1 million a year earlier, the Applebee's and IHOP parent said Nov. 4. The company credited a $36.9 million increase in company-owned restaurant revenue from units acquired and opened since the third quarter of 2025. Franchise revenue, the royalties and fees paid by independent operators, slipped to $159.0 million from $161.3 million, Franchise Herald reported from the company's filing.

The company-owned gains come from a buying spree. Dine acquired 12 Applebee's restaurants in February and 48 more in June, after buying 10 IHOPs and 12 Applebee's in 2025, according to the release. It is the same pattern we have tracked across franchising this fall, as franchisors buy back the middle of their systems.

The sales line did improve. Applebee's domestic same-restaurant sales rose 0.9% and IHOP's rose 0.8%. Off-premise orders made up 23% of Applebee's sales and 21% of IHOP's.

The footprint did not. Applebee's and IHOP opened 23 restaurants in the quarter and closed 28; seven of the openings were dual-branded. Counting Fuzzy's Taco Shop, the system stood at 3,275 locations on Sept. 27, down from 3,345 a year earlier, by Franchise Herald's count.

The cost shows up in cash. Adjusted free cash flow for the first nine months fell to $12.8 million from $68.2 million. Dine pointed to lower operating cash flow, the timing of marketing spend, remodel and development incentives paid to franchisees, and higher capital spending. Adjusted EBITDA was flat at $49.0 million for the quarter.

Management's growth answer is the dual-brand restaurant, an Applebee's and an IHOP under one roof. The system had 90 of them at quarter end, 49 in the U.S., up from 29 a year earlier, according to Franchise Herald. "We're focused on supporting the future of our brands, including expanding our dual-brand program, improving our company-owned portfolio, and accelerating our remodel pipeline," chief executive John Peyton said.

All of this lands while the company's ownership is in question. The board adopted a poison pill after a reported $39-a-share approach from Arkhouse Management and Cobblers Cove Capital, and the plan runs through Oct. 27, 2027, Franchise Herald noted. No formal public proposal has followed.

A buyer looking at this quarter sees two businesses inside one ticker: a royalty stream shrinking slowly, and a restaurant operator growing by spending cash. Which one it thinks it is paying for will set the price.