Dive Brief:
- IHOP is about to launch its third virtual brand, a chicken tender concept called TenderFix, IHOP president Jay Johns said Wednesday during parent company Dine Brands’ earnings call.
- Johns didn’t indicate a timeline for the launch of the brand, but said it would be released soon.
- IHOP’s two other virtual brands, Thrilled Cheese and Super Mega Dilla, are in over 1,200 restaurants and have helped IHOP expand its reach and attract new customers, Johns said.
Dive Insight:
Virtual brands are helping drive IHOP’s off-premise business, which made up about 22% of sales during the fourth quarter, Johns said. Delivery made up 14% of that mix, with traditional takeout representing 8% of sales, he said. Dine Brands CEO John Peyton said building out the company’s portfolio of virtual brands remains a top priority, and it’s now testing a chicken and cheese steak concept.
IHOP initially tested its two virtual brands early last year in 50 restaurants. It found that the brands didn’t compete with the restaurant’s breakfast daypart business and required minimal new SKUs. TenderFix is expected to complement these two virtual brands, Johns said.
Despite IHOP’s high mix of delivery business, off-premise sales in general have moderated since the year-ago quarter. Off-premise represented about $7,700 in average weekly sales at the chain last quarter compared to $9,300 in average weekly sales in Q4 2021. The off-premise sales mix during the year-ago quarter also was 24%, comparably. This is in line with other chains, including Chipotle, which report softening off-premise sales as customers return to dine-in.
Sister brand Applebee’s also has a virtual concept, Cosmic Wings, but started including menu items for dine-in guests last summer to reach more customers. Executives didn’t offer any updates on the current strategy related to this brand. Off-premise sales for Applebee’s made up nearly 24% of its sales mix, with 13% from to-go and 11% from delivery, Applebee’s president Tony Moralejo said.
