IHOP Franchise Cost Fee Salary Owner List For Sale

An IHOP franchise restaurant opening can be a thrilling and intimidating idea. The probable success of a specific franchise in your neighborhood is just one of the numerous factors to take into account. IHOP has more than 1,600 franchise and company-owned locations throughout the United States and Canada and has been one of America’s most well-liked eateries for more than 60 years.

Take into account starting a franchising location right away to join the IHOP family.

How much does an IHOP franchise cost?

The costs associated with starting an IHOP franchise are

• The franchise fee is  $40,000-$50,000
• Total initial investment is $1,152,954 to $6,089,550
• The minimum Net worth required  is  $150,000
• The minimum Cash or Liquid Capital is  $500,000
• The royalty fee is  4.5%

How much does it cost to franchise IHOP in the United States?

The franchise fee for an IHOP franchise ranges to somewhere around $40,000 in the United States. 

IHOP Initial and On-going Franchise Cost
IHOP franchise Fee	$40,000-$50,000
IHOP Franchise Cost	$1,152,954-$6,089,550
Royalty Fee	4.5%
Advertising Fee	3.5%
Term of Agreement	20 years
Is the franchise term renewable?	Yes

How much do IHOP franchise’s franchise owners make?

Average Unit Volume (AUV) can be estimated from the financials of IHOP to know about their earnings as IHOP makes no financial guarantees about its franchises.

Initial midpoint investment	The % Profit margin of median sales of franchise	Estimated profits	Time to recoup the investment
$3,621,252	10%	$180,869	20 years
15%	$271,303	13 years
20%	$361,738	10 years

 

What is  IHOP franchise profit?

According to sources, IHOP’s systemwide sales in 2021 were close to $3.12 billion, which was less than in prior years due to the COVID-19 pandemic’s effects.

• Systemwide Annual Sales is  $3.12 billion
• Average annual sales per unit are $1.8 million 
• The average franchisee profit is  $250,000-$300,000 (with a 15% profit margin) 

The typical total revenue per location for an IHOP franchise is $1.8 million and a profit of $180 to $250K. This comprises places that are already up and running, are passed the startup stage, and make much more or less than the national average.

 

IHOP franchise Requirements

To open an IHOP franchise, a potential franchisee

• The ideal franchising partner for IHOP is dedicated to the brand and committed to a long-term partnership with the business.

• Potential franchisees must also be knowledgeable about the best practices for building brand awareness in the food business.
• Partners should therefore have a background in supply chain management, real estate development, marketing, and quality control.

 

 

What are IHOP franchise reviews?

As of 2017, the business had 1671 franchises operating within the United States and about 115 outside of it. Only if the company is dedicated to growth can IHOP occasionally give territorial exclusivity.

Although IHOP began as an establishment serving American breakfast food like a vintage diner, it has now expanded to provide all varieties of breakfast, lunch, and dinner food items, milkshakes, desserts, milkshakes, and other items. Although IHOP is often linked with American breakfast food, there are more than 1,800 locations of this brand globally.

What is the IHOP?

Al and Jerry Lapin created the International House of Pancakes (IHOP) in 1958. IHOP founded its first location in Toluca Lake, California, and the business swiftly spread across the entire country. IHOP went public in 1973 and was put on the New York Stock Exchange. International House of Pancakes, LLC, located in Glendale, California, is the franchisee and manager of IHOP restaurants.

IHOP started updating its menu and operating procedures in the 1970s to compete with other well-known pancake chains.

A greater range of breakfast options, including egg dishes, omelets, and French toast, was introduced in 1978. Additionally, the eatery started serving healthy options including low-fat muffins and wheat pancakes.

Is IHOP a Franchise Opportunity?

The International House Of Pancakes, or IHOP, is an American pancake restaurant brand that specializes in morning meals. Dine Brands Global owns the franchise business, with independent franchisees running 99% of the locations. Even though its primary concentration is on breakfast items, IHOP also serves lunch and dinner.

Facts That Nobody Told You About IHOP

• The co-founder built his fortune from a single coffee cart.
• To prepare their unique pancakes, the Lapins recruited a Cordon Bleu chef.
• Only the Vermont IHOP offers genuine maple syrup.
• They used to use a cartoon kangaroo in their commercials. 
• Many stations have coffee bars and singing waitresses. 
• IHOP’s Free Pancake Day helped earn nearly $16 million for charity.

 

IHOP Franchise Review and Information
Industry Type	Food Franchise Opportunities
Sub Category	Breakfast Food Franchise Opportunities
Year Established	1958
Company Name	International House of Pancakes, LLC
Founder/Management Head	Dine Brands Global, Inc
Franchising Started	1960
Franchise Expansion Plan	United States and Canada
Number of Units	1700
Number of Franchise Units	1832 Franchise units (as of 2023)
Social Media Handles	Facebook
	Instagram
	Youtube
	Twitter
Company Office location	Glendale, California

IHOP Training to Franchises 

IHOP offers an initial training course for new franchisees called IHOP Academy. Trainees must pass online and practical exams involving on-the-job performance testing and observation to advance from the restaurant training program to the management training program and graduate from management training. 

The training is divided into two parts 

• For a six-week program, around 45 to 50 hours per week are required.
• A nationwide, two-day workshop for the capstone project in the United States.

The initial training curriculum includes fundamental restaurant operation skills, as well as IHOP brand standard operating procedures. This training is offered using a blended learning strategy that includes workbook assignments, interactive, real-world exercises, and a learning management system termed IHOP Academy to introduce and encourage learning activities.

How is IHOP Territory Granted to Franchises?

If franchisees sign a Franchise Agreement for a traditional venue through the Single Store or Multi-Store Development or Purchase Programs, they are granted a franchise to operate one restaurant in a specified franchised site agreed upon at the time the Franchise Agreement is executed. 

As long as franchisees follow the provisions of the Franchise Agreement, the franchisor fails to operate, own, franchise, or license another traditional venue IHOP restaurant within a certain radius of the restaurant (the franchised area).

What is the IHOP franchise’s Term of Agreement and Renewal?

The original franchise terms of traditional franchise restaurants, which are normally 20 years long, are the same length as the lease. Franchisees may add a renewal term of up to 10 years if they are in compliance. Franchisees may add a special renewal term if they are in compliance and the initial term was less than 10 years; the total period, including the special renewal term, cannot exceed 25 years.

Does IHOP Financial Assistance to Franchises?

The franchisor is only permitted to finance a portion of the initial franchise fee under its purchase program. In extreme circumstances, the franchisor may decide to agree to finance the complete first franchise price on its own.

IHOP offers thorough franchising support, which includes 

• Help to choose a location
• Assistance with restaurant planning and design
• Assistance with the restaurant opening 
• Assistance with marketing

Pros & Cons of IHOP franchise

Pros

• The franchise has been in business for approximately 65 years
• Direct disclosure of total expenses and fees
• Over 1,600 identical restaurant locations worldwide

Cons

• High upfront fees and charges
• Hefty personal investment
• Taking a long time to witness a return on investment (10-13 years)
• Increased competition.

 

 

 

Franchise Deck Analysis and Overview

Despite being predominantly a breakfast restaurant, IHOP has recently changed its menu to include classic American diner food like burgers and fries. Although the majority of customers connect the restaurant with pancakes, the decision to offer a more diverse menu has received generally positive feedback, even though pancakes continue to be the company’s foundation.

Although 1,679 of these locations are in the United States, it is important to note that this pancake house is truly global. With 223 locations, California has the most IHOP restaurants in the country.

I will not recommend you IHOP franchise in 2023, for these reasons

• the franchise cost is high,
• and it can take more than 10 years to recoup your cost
• IHOP is converting company-owned units to franchises, seems they are not confident or secure about the future of its brand.

Is IHOP Profit Worth the Franchise Cost?

IHOP restaurants provide customers with an inexpensive, routine dining experience together with warm and welcoming service. But the company has been in decline for the last three years. The number of franchising units has reduced. Franchises have closed at a pace of 17 each year during the last three years. 

This is an indication that these stores are underperforming, or that franchisees’ franchise periods have expired and they failed to renew them.

IHOP is a well-known brand in the US market, but right now its price is just too exorbitant. An increasing number of franchisees are closing their doors.

IHOP Franchise Success and Failure Rate

The below table will highlight the Brand franchise success and failure rate for the last 3 years. This will supplement your decision-making process.

Year	Format	Start	End	Change
2019	Franchise Owned	437	434	-3
Company Owned	319	312	-7
2020	Franchise Owned	434	312	-2
Company Owned	432	326	+14
2021	Franchise Owned	432	496	+64
Company Owned	326	277	-49

There is negative growth in the company-owned stores, maybe the company decided to convert them to franchises in 2021.

Competition Analysis of IHOP
	Cost to Franchise	Franchisee Fees	Royalty + Ad fees	Expected Profit	Recoup of Capital	FD Rating
IHOP	$1,152,954-$6,089,550	$15,000	4.5%+ 3.5%	$59M	10-20 years	3.4/5.0
Denny’s	$305K-$2.33M	$10,000-$30,000	4.5-7%+3-3.25%	$40,000 to $ 150,000	10-18 years
Waffle Cabin	$92K-$230K	$23,500	5%+
Waffle House Franchise	$600,000 to 1Million	$37,500	6%	$65,000 to $130,00	8 to 15 years	3.8/5.0
Dunkin’ DonutsFranchise	$121,400 – $1,787,700	$10,000- $90,000	5-9% + 5%	$75,000 to   $ 225,000	5.5 years	4.1 / 5.0
Steak ‘n Shake Franchise	$1,208,000-$1,687,000	$25,000	5.5%+3%	$1,403,587	5 to 8 years	3.9 /5.0

The rating for the IHOP franchising is 3.4/5.0.

 

Conclusion 

IHOP franchise is a premium business with significant up-front expenses and a protracted turnaround. Before committing to the high cost of owning and maintaining an IHOP site, it would be wiser for investors with the resources to invest in other franchises to explore other franchises like those listed below.

Before making any investment decisions or deciding to commit to a franchise, of course, it is advisable to consult a financial expert.

IHOP, which opened its doors in 1958, will mark 65 years in operation in 2023. As a long-running and well-established company, the franchise stands out, but that does not necessarily mean a franchise is guaranteed profit.

You can explore the breakfast and coffee franchise opportunities categories can look at 

1. Scooter’s Coffee Franchise
2. Biggby Coffee franchise
3. First watch franchise
4. Dunkin’ Donuts Franchise
5. Wayback Burgers Franchise
6. Dutch Bros Coffee Franchise
7. Waffle House Franchise
8. Denny’s

Frequently Asked Questions (FAQs)

1. Is the IHOP franchise profitable?

The franchisor’s IHOP business is quite profitable, with retained earnings exceeding $59 million in 2021. It is, but, impossible to estimate the strength of that expansion in the absence of previous financial information.

2. Can you make money owning an IHOP franchise?

IHOP franchises prove to be a lucrative business opportunity to make money. 

3. Is IHOP a franchise?

Yes, IHOP is a franchising company that started franchising in 1960. 

4. How do the IHOP franchises make money?

IHOP has been a primary influence on all things breakfast for 58 years. The restaurant provides a wide range of popular lunch and dinner selections, meals under 600 calories, and 65 unique distinctive, fresh, made-to-order breakfast alternatives to make money.