Announcing the deal, IHOP said it intended to convert the bulk of Applebee's 508 company-owned stores to franchises, mirroring a transition IHOP itself employed to improve its own business in recent years.
The shift to a franchise model could lead to even greater change in a marketing operation that has been less than stable in recent months. Applebee's hired a new chief marketing officer in February, split with longtime creative agency Interpublic Group of Cos.' DraftFCB in March and hired sibling McCann Erickson to run the account last week.
'Focus and discipline'
In a statement, IHOP Chairman-CEO Julia Stewart said: "We look forward to applying the same focus and discipline to Applebee's that we have employed at IHOP over the last several years. We have successfully restructured our own company, and in the process, re-energized our brand, improved our operational performance and maximized the development of franchise restaurants."
Dave Goebel, president-CEO of Applebee's International added: "We believe the combined company, and the strength of the two brands, will drive significant value creation. Our management team looks forward to working with the IHOP management team during the transition period."
The deal is expected to close in the fourth quarter of 2007.