IHOP – Franchise Review
IHOP describes itself as the dining room of America. It is also acclaimed as the country’s largest private employer. With 50 years of heritage, IHOP has made a name for itself by offering well-made meals, snacks and beverages to its customers. Its country-continental menu combination is a delight and many families gather at IHOP restaurants for breakfast, brunch and dinner. Its menu offerings are quaintly named, ‘Hearty Omelettes’, ‘World Famous Pancake Combos’ and ‘Signature Soups’ to name a few. IHOP is operated by International House of Pancakes, a Glendale based wholly-owned subsidiary of DineEquity, Inc.
IHOP started opening franchises all over the nation with this sole aim. With informed core values such as integrity, excellence, innovation, accountability, trust, inclusion and community, the founders Al and Jerry Lapin along with several other investors, expanded the chain of restaurants all over the nation.
As of September 2010, there are nearly 1,483 IHOP franchises operating in 50 states. Nearly 99 percent of the IHOP restaurants are operated by the franchise owners who are trained according to the restaurant rules and regulations. IHOP is known for its moderately priced, high quality foods and beverages that are served in an elegant atmosphere.
To its customers’ delight, IHOP offers the option of making changes to their favorite items so as to retain the taste while sticking to the calorie count they are conscientious about. IHOP offers 14 varieties of dishes such as omelets, salads, sandwiches, burgers, steaks and chicken.
The uniformity of the franchises, qualified staff and the ambitious vendors; all account for IHOP’s exponential growth rate in the recent past. With 50 years of experience in serving food to guests, IHOP staff knows work ethics and food serving etiquettes to the ‘T’. It does not matter if the one visiting the restaurant is a celebrity or a common person; the kind of hospitality shown to both is the same. IHOP common stock is listed and traded on New York Stock Exchange under the symbol ‘IHP’.
IHOP is highly concentrating on the domestic growth markets such as Nebraska, St. Louis and Kansas City. International growth markets such as Canada, Caribbean and Central America; and non-technical growth markets such as Airports, Casino Clubs and Universities are their areas of expansion too.
The minimum financial requirements, to obtain a franchise, are holding a net worth of $ 1.5 million and liquid assets worth of $ 500,000. One also needs to pay $50,000 towards the franchise fees, the total estimated investment would fall in between $2.0 million and $3.5 million. It is mandatory to have a unit size of around 5,000 sq. ft with the availability of seating space for 185 people. It is also mandatory to choose a location with 25,000 to 50,000 per 3 mile population. IHOP also takes several other things like the freeway traffic and density of retail stores or offices into consideration while opening the franchise with a third party.
When looking to start any business it is important, particularly considering today’s market, that you look for specific ways to cut minimize or reduce overhead and risk. Any business is going to have risk, but it is important to have a full understanding of the amount of investment, startup cost and “ROI” (Return on Investment).
Did you know that 80% of ALL franchise endeavors fail in the first two to five years leaving large debts looming for years thereafter?