IHOP Franchise FDD, Costs & Fees (2024)

KEY FRANCHISE STATS

All you need to know about this franchise in a snapshot

Initial franchise fee
$50,000
Investment required
$1,766,000 - $4,376,000
Royalty fee
4.50%

IHOP: Leading the Way in Family Dining Since 1958

The International House of Pancakes, widely recognized as IHOP, is a prominent American brand offering an extensive range of breakfast, lunch, and dinner items since 1958. Founded by brothers Al and Jerry Lapin, the inaugural IHOP restaurant opened in Toluca Lake, California. By 1960, the brand began franchising, highlighting its early aspirations for growth and expansion.

Currently, IHOP operates as part of Dine Brands Global, a company established in 2007 that also includes Applebee's in its portfolio. This partnership combines over a century of hospitality expertise, focusing on individual brand identities while fostering growth and enhancing customer satisfaction.

With its headquarters in Pasadena, California, IHOP has experienced significant growth over the years. Known for their family-friendly environment and reasonably priced meals, IHOP restaurants are particularly famous for their pancakes. The brand’s diverse menu and dedication to warm, welcoming service have solidified its position as a leader in the family dining sector in the USA.

IHOP's international presence extends beyond the United States, reaching places like Puerto Rico, Guam, and countries such as Mexico, Canada, Ecuador, Egypt, India, Pakistan, Panama, Peru, the UAE, and Saudi Arabia. Notably, all IHOP restaurants are operated by independent franchisees, highlighting the brand’s franchise-centric business model.

Initial investment

Here's what you would need to invest if you were to start this franchise. These costs are provided by the franchisor in the Franchise Disclosure Document.

Type of Expenditure Amount
Location Fee $15,000
Initial Franchise Fee $35,000 - $50,000
Real Estate See Note 4
Construction (Inline/Endcap/Conversion) $910,000 - $1,520,000
Construction (2700 Prototype) $1,330,000 - $2,000,000
Construction (Large Format Prototype) $1,780,000 - $2,800,000
Major Equipment and Fixtures (Inline/Endcap/Conversion) $532,000 - $740,000
Major Equipment and Fixtures (2700 Prototype) $493,000 - $595,000
Major Equipment and Fixtures (Large Format Prototype) $532,000 - $664,000
Signage (Inline/Endcap/Conversion) $30,000 - $50,000
Signage (2700 Prototype) $40,000 - $60,000
Signage (Large Format Prototype) $40,000 - $60,000
Smallware Package/Opening Order $15,000 - $30,000
Inventory $50,000 - $100,000
Working Capital $50,000 - $200,000
Insurance $35,000 - $100,000
On-Location Assistance $0 - $16,000
Site Approval Costs $0 - $50,000
Impact Study $4,000 - $6,000
Opening Training Support Fee $0 - $55,000
POS Setup, Training and Support Fee $3,500 - $7,980
Tray POS Software Fees $1,100 - $3,400 per year
Europay, Mastercard, and Visa (“EMV”) Point to Point Encryption (“P2P”) Services $1,000 - $2,500 per year
Wi-Fi Services $90 - $400 per month
Kitchen Display System $15,000 - $30,000
Server Tablets with Payment Device $7,500 - $30,000
On-Line Ordering $65 - $200 per month
Mobile Device Management (“MDM”) Fee $12 - $480 per year
Digital Products Service Fee $0 - $350 per month
Implementation Fees $250 - $1,500
POS System Hardware $20,000 - $30,000
Wait Listing $15 - $69 per month
Curb Side Pick Up – Fly Buy/I’ve Arrived $20 - $30 per month
Customer Relationship Management (“CRM”) Fee $0 - $150 per month
Catering $0 - $30 per month
Initial Additional Training Expenses $4,000 - $7,000 per person
Supply Chain Co-op Stock Purchase $0 - $100
TRAY POS Training $400 - $1,500
Terminal Device Antivirus $240 - $600
Additional Funds – 3 months $16,500 - $85,250
Miscellaneous $5,000 - $26,000
Total (Inline/Endcap/Conversion) $1,766,072 - $3,161,997
Total (2700 Prototype) $2,157,072 - $3,506,997
Total (Large Format Prototype) $2,646,072 - $4,375,997

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Number of units

2024
Franchised units

1,638

1,646

1,658

Company-owned units

0

0

0

Total units

1,638

1,646

1,658

Franchise Disclosure Document

Training 

IHOP offers a comprehensive training program for franchisees, focusing on the essential and operational aspects of running a successful restaurant. This training ensures that franchisees and their staff are fully prepared to uphold IHOP's standards.

Certified Leader Training Franchisees must have at least two restaurant leaders trained in IHOP's daily operations, achieving certification through an approved IHOP program like the "SMILE Leadership" initiative. This extensive training spans approximately six weeks and covers all necessary operational skills and IHOP Brand Standard Operating Practices. The leadership skills capstone, which can be delivered virtually, through eLearning, or in person, is an integral part of this thorough training process.

Initial Opening Training Beyond Certified Leader Training, IHOP requires specialized training for the opening of each new restaurant. The specifics of this "Initial Training" depend on the franchisee's experience and staffing plan and may include hands-on operational training at the franchisee's location. IHOP sets the exact training requirements, which may continue until trainees achieve Certified Leader Certification or until a decision is made to terminate their training. This phase is crucial to ensure the franchisee's team is ready for the restaurant's launch.

Management Seminars and Continuing Education IHOP also requires franchisees, their Designated Representatives, and Certified Leaders to attend at least one management seminar annually. These seminars, which can be held virtually, at an IHOP restaurant, a training center, or another designated location, are essential for ongoing education. While mandatory seminars do not have a tuition fee, optional seminars may involve a fee.

Territory Protection

IHOP does not provide franchisees with an exclusive territory. Franchisees are given the right to operate at a designated franchised location, but this right is non-exclusive and restricted to that particular location.

IHOP retains all rights, including the ability to own, operate, and franchise restaurants or other business concepts under different names. Additionally, IHOP can produce, franchise, license, distribute, and market products at or through any outlet, regardless of its proximity to the franchised location.

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