IHOP to open 94 units in its largest franchise deal ever

Dive Brief:

IHOP entered into a franchise development agreement with TravelCenters of America to open 94 restaurants over the next five years at TA and Petro branded locations across the U.S., and is the brand’s biggest development deal in its 61-year history, according to a press release.
The restaurants will be operated by TA Restaurant Group, which is a division of TravelCenters of America. There are already four restaurants in TA's travel network, including one that opened this week in Jackson, Georgia.
These locations will have the casual brand's full menu.

Dive Insight:

Alternative locations are becoming a prime strategy among branded restaurants to reach more customers, especially those on the go. Panera struck a deal with HMSHost in July to launch its brand inside airports and travel centers around the country. Shake Shack, Pret A Manger, Starbucks and Auntie Anne's also have opened units within HMSHost’s airport and travel center network. Other casual brands like Maggiano's have also turned toward airports to grow their brands in recent years.

TravelCenters of America is likely an ideal partner for IHOP since it already works with several full-service brands, including Black Bear Diner, Fuddruckers, Bob Evans and Boston Market, according to its website. It also has a positive reputation among drivers and truck drivers.

With IHOP's same-store sales growing a meager 0.03% in the U.S. during the third quarter, it will need these locations to try and gain some momentum. Its unit growth also has been sluggish, increasing eight net new units during the quarter. The addition of the 94 units will definitely help the company boost units over the next five years, and the focus on truck stops also opens up IHOP to about 3.5 million truck drivers.

This agreement also fits within the company's growth strategy of late, which has been to focus on growing delivery as well as nontraditional locations, such as colleges and universities, airports, train stops and rest stops. It also has been testing a smaller prototype, one that could fit in more urban and rural areas, according to Restaurant Business. Given the sluggish sales experienced across the casual dining sector any method of growth is worth trying, especially one that allows a casual brand to reach new consumers.