Dive Brief:
- A new IHOP restaurant in Phoenix serves a full menu of beer, wine and cocktails alongside its standard all-day menu, reported the Arizona Republic, making it the first bar at a standalone IHOP. (A few locations inside airports serve alcohol.) Franchise owner Romulus Restaurant Group, which runs 100-plus IHOPs in 11 states, tossed the idea to IHOP corporate after finding a vacant Lone Star Steakhouse with a built-in bar.
- IHOP collaborated with Romulus to develop the "Rise and Shine" bar menu, available 6 a.m. to 10 p.m., which features five draft beers including a Phoenix brewery's coffee ale, three California wines on tap and a dozen brunch-friendly cocktails. In addition to a Bloody Mary and Irish coffee, guests can also dip into a strawberry margarita or a Moscow Mule with orange juice.
- Romulus President and COO Chris Sumners told the Arizona Republic, that this would be a test and they would let customers inform their decisions on whether to expand the idea. According to the San Diego Union-Tribune, Dine Brands Global, which also owns Applebee's, does not plan on retrofitting its other restaurants with bars.
Dive Insight:
Whether chains not recognized for bar service can succeed in that space remains uncertain, as the Phoenix franchisee joins a list of restaurants experimenting with serving alcohol.
Denny's, for instance, opened a location in New York City proper in 2015 with a liquor license and full bar, offering cocktails and even a 2003 Dom Perignon Premier Cru with its Grand Slam breakfast. Disgruntled neighbors pushed the community board to restrict bar hours to start at 11 a.m. on weekdays and 10 a.m. on weekends. Eater reported that despite the publicity, the chain closed in 2018, unable to make a profit. Starbucks also began serving wine and beer at 400 U.S. cafes in 2015 with plans to build bar menus into thousands of locations, but last year the chain pulled the plug to focus on alcohol only in its high-end roasteries.
While booze and brunch go hand-in-hand at plenty of independent diners and restaurants, consumers may not want those options at their tried-and-true chains. Do people, for example, really want to pay $300 to get some champagne with a Denny's breakfast that typically starts at $5.99? Romulus Restaurant Group is smart to trial the bar to ensure that it doesn't alienate its current customer base, but can still draw in new diners who might want to mix up their restaurant experience.
The franchise owner will also have to balance its new offerings with its checkbook. Liquor purchasing requires different storage, maintenance and training than food only — and the money adds up. The state of Arizona charges restaurants $2,000 for a new liquor license at a $500 renewal rate, and Maricopa County charges additional fees. These extra costs could affect already slim margins for the IHOP franchisee, though alcohol could also boost check averages, especially on weekends.
The bar is just one of many viral waves by IHOP this year, first with its name-change teaser to promote limited-time burgers and, more recently, with a pancake-pumpkin stout brewed by Keegan Ales in upstate New York. However attention-grabbing, these innovations seem to be restricted in scope: IHOP won't be changing its name to IHOB, and the 20 barrels of IHOPS will only be available at select bars and beer festivals in New York. Whether the Phoenix location has a similar trajectory or customers see an expansion of IHOPs with bars will depend on the success of this trial.
