Dive Brief:
- Dine Brands, parent company of Applebee's and IHOP, has hired John Peyton as its CEO, the company announced in a press release Tuesday. Peyton, president and CEO of Realogy Franchise Group, will assume the role on Jan. 4. He replaces Steve Joyce, who has served as Dine Brands CEO since September 2017 and resigned from his role, and will make an annual base salary of $1 million, plus incentive benefits and a cash signing bonus.
- Peyton has led global consumer franchised businesses for over two decades and was "instrumental in transforming and revitalizing [Realogy's] brands through an elevated service delivery model, placing an emphasis on agility and innovation," according to the release.
- Dine Brands hopes to leverage Peyton's hospitality expertise to "accelerate long-term growth," chairman Richard Dahl said in a statement. The company began searching for a replacement for Joyce earlier this spring. Joyce's employment agreement expires Feb. 1, 2021.
Dive Insight:
Like most casual restaurant companies, Dine Brands has suffered significant comparable sales slips amid the pandemic. But performance is improving — Applebee's reported comp sales declines of 13.3% for Q3 compared to Q2 declines of 49.4%, and IHOP reported declines of 30.2% for Q3 compared to declines of 59.1% in Q2.
"With the occurrence of the crisis due to the coronavirus pandemic, it is not only essential that we all focus on our current situation, but also our emergence with a strong leadership team for the future," Joyce said in a May press release regarding his departure.
The company has also been under investor pressure this year. In April, JCP Investment Partnership proposed that Dine Brands spin off its IHOP business into a separately traded public company "to trade at a materially higher multiple than the Company currently trades." Dine's board of directors pushed shareholders to vote against the proposal. The company already had a strong strategy to reverse traffic declines going into 2020, with plans to double down on catering, delivery, urban expansion and nontraditional locations like travel centers and casinos.
Though the pandemic has clearly destabilized much of these plans, Dine is still pushing toward an off-premise focused future. In June, the company hired Justin Skelton as a permanent CIO after he served as vice president of information technology infrastructure and operations and served as CIO in an acting capacity. This move is designed to bolster the infrastructure necessary to run off-premise channels like delivery, carryout and pickup, which have helped franchisees navigate the coronavirus crisis.
Still, not all operators have been spared from the brunt of the pandemic's economic fallout. IHOP franchisee CFRA Holdings filed for Chapter 11 bankruptcy in May and closed 49 of its IHOP restaurants. Sun Holdings subsidiary Suncakes LLC acquired 41 of those locations last month, and Dine received $4.6 million as part of the transaction. Applebee's franchisee Wisconsin Apple also filed for Chapter 11 bankruptcy in October following a shutdown of its 25 restaurants in March.
Though Dine's overall performance is slowly recovering, Peyton will take the reins of the company at a very delicate point in time. States across the country are closing dining rooms once again, which could devastate casual brands in the same way the first round of shutdowns impacted businesses at the start of the pandemic. Though Dine now benefits from deeper customer familiarity with its off-premise channels, the company will still need to brace disruption and invest in efficiencies around these channels.
