The International House of Pancakes announced plans last month to move forward with pilot sites for its new fast casual concept, flip’d by IHOP, after pausing the launch due to the COVID-19 pandemic.
IHOP, owned by Glendale parent company Dine Brands Global Inc., aims the brand extension to address growing demand for on-the-go meals with made-to-order breakfasts, lunches and dinners at smaller venues.
The first flip’d by IHOP location is scheduled to open in New York City this summer, with three additional sites in Lawrence, Kans.; Columbus, Ohio; and Dublin, Ohio being explored for later this year. Plans that were initially revealed in 2019 included an Atlanta store to be opened last April, but were disrupted by coronavirus-related closures.
“Since we originally announced flip’d in 2019, a lot has changed. We wanted to ensure that we were evolving the concept to meet our guests’ needs,” Jay Johns, president of IHOP, said in a statement. “While we know there is a pent-up demand for a return to dining in restaurants, we anticipate that our delivery and takeout business is here to stay as consumer needs continue to shift and they seek out different ways to experience IHOP favorites. With flip’d, we can provide that on-the-go fast casual experience, making now the perfect time to bring this concept into the world.”In response to the delayed opening, the company has rethought its development strategy for the restaurant – originally focused on footprints in large metropolitan cities – and will now be piloting the flip’d by IHOP concept in suburban communities and non-traditional venues as well as large metro markets.“Even though the footprints of these initial flip’d locations will vary during this pilot phase, what will remain consistent is our emphasis on quality, speed, to-go and delivery, all with the crave-worthy food that has been a hallmark of the IHOP brand for more than six decades,” Johns’ statement said.Each flip’d by IHOP location will be operated by franchisees. In an interview with CNBC, Johns said IHOP will offer $150,000 to each to the first 10 franchisees who open their first flip’d by IHOP location to incentivize growth and speed up the learning process for the company.IHOP did not return comments by press time for this story, but did provide renderings of the Flip’d format.Diner competitionIHOP isn’t the only major restaurant chain to explore the fast casual market. Competitor Denny’s Corp. launched a similar concept in 2015 called The Den, which now has 16 locations, and in 2019 Cracker Barrel acquired Maple Street Biscuit Co.’s 33 breakfast and lunch locations. Calabasas-based Cheesecake Factory Inc. debuted an Asian fusion concept called Social Monk Asian Kitchen in 2019 and Bloomin’ Brands opened Aussie Grill by Outback locations in the U.S and internationally the same year.According to the National Restaurant Association, there are more than 1 million food service locations in the U.S., with fast casual locations representing the smallest portion of the industry, coming in at roughly 7.5 percent of market share. Growth in this sector, however, outpaces full service and fast-food concepts, with an anticipated compound annual growth rate at almost 8 percent during the period of 2020-2024, according to research by Technavio. The fast casual restaurants market size in the U.S. is set to grow by more than $35 billion in that timeframe, driven by demand for innovation and customization in menus.The flip’d by IHOP concept’s all-day menu will feature reconceptualized IHOP breakfast favorites such as customizible pancake bowls, as well as savory options including burritos, steakburgers and chicken sandwiches. During the pandemic, the restaurant debuted its burrito and bowl options at its full-service restaurants as part of its multi-year plan to appeal more to lunch and dinner customers.
In 2018, the company temporarily rebranded itself to be called IHOB to promote its steakburger line, which ultimately quadrupled burger sales. And last September it announced a new “Ihoppy Hour” value menu for customers who stop in between 2 p.m. and 10 p.m.
Customers at flip’d by IHOP will have options for ordering their meals, including digital kiosks or the front counter in person at the restaurants, pre-ordering online for pickup or opting for delivery service where available. The restaurants will not include table service for refilling coffee or placing orders, but limited seating will be available for guests who want to eat in store.
Flip’d by IHOP is one piece of IHOP’s larger strategic growth and development plan, as the legacy brand seeks to reach more guests beyond traditional IHOP locations through smaller format locations and this new fast casual concept. Currently, there are more than 1,600 IHOP restaurants in the U.S. and more than 100 more worldwide.Shares of Dine Brands, which also owns Applebee’s Neighborhood Grill & Bar restaurants, have risen sharply this year after the brand saw its net sales plunge 30 percent during the first nine months of 2020. Compared to June of last year, share prices have seen an almost 94 percent increase.
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