forbes.com
Dine Brands Needs Urgent Change to Save Applebee's and IHOP
Years of underinvestment at Dine Brands, the parent company of Applebee's and IHOP, has led to a 70% stock collapse since early 2021, prompting calls for board changes and operational improvements to revitalize the struggling brands.
- What is the core problem facing Dine Brands, and what are its immediate consequences?
- Dine Brands' core issue is years of underinvestment, leading to a 70% stock collapse since early 2021. This underinvestment resulted in rising costs, uneven guest traffic, and operational shortcomings, putting the company's $30 million dividend at risk, as adjusted net income fell to $33 million in the first half of 2025 from $45 million the previous year.
- What is the proposed solution, and what is its potential impact on Dine Brands' future?
- The solution involves board restructuring with experienced individuals to address financial and operational issues. A proposed strategy includes menu simplification, improved marketing, remodel incentives, and streamlining capital allocation. Successful implementation could increase EBITDA by $55 million within two years and restore the stock's value, re-engaging franchisees and regaining market confidence.
- How are operational issues impacting Dine Brands' performance, and what are the consequences for franchisees?
- Applebee's and IHOP are lagging competitors due to bloated menus, outdated technology, and inconsistent execution. This impacts franchisees who face complexity without higher returns, leading to disengagement and deferred investments. The resulting weaker service and brand erosion strain corporate cash flow and ultimately harm shareholders.
Cognitive Concepts
Framing Bias
The article frames the narrative around the need for change at Dine Brands, emphasizing the financial struggles and operational underinvestment. The headline, while not explicitly stated, is implicitly presented as a call for action to prevent the decline of Applebee's and IHOP. The introduction immediately sets the tone by highlighting the nostalgic value of the brands while contrasting it with their current financial woes. This juxtaposition creates a sense of urgency and reinforces the need for change. The inclusion of data points like the 70% stock collapse and declining adjusted net income strengthens this framing by grounding the narrative in concrete evidence. However, the article largely focuses on the negative aspects, potentially overlooking positive developments or mitigating circumstances that might offer a more balanced view.
Language Bias
While largely factual, the article uses language that could be perceived as loaded. Terms like "collapsed," "destroyed value," "drift into irrelevance," "bloated menus," and "clunky ordering" carry negative connotations and contribute to a pessimistic tone. The repeated use of phrases like "underinvestment" and "operational underinvestment" emphasizes this negative framing. More neutral alternatives might include "declined," "reduced value," "lost market share," "extensive menus," "inefficient ordering systems." The use of "whisper their support" suggests a sense of fear among franchisees, which reinforces the narrative of a dysfunctional management structure. The author's references to previous work, in combination with the frequent and repeated use of phrases like "I've seen this before," and "I've sat across from operators," contribute to a narrative of expertise and authority that is not necessarily objective.
Bias by Omission
The article focuses heavily on the negative aspects of Dine Brands' management and the franchisees' concerns. While it acknowledges the company's cash flow and dividend payments, it doesn't delve into any potential positive aspects of the company's performance or future prospects. Additionally, the article might benefit from including perspectives from Dine Brands' management or other stakeholders, such as customer feedback, to provide a more balanced and comprehensive overview. While space constraints are a factor, the potential positive elements are omitted significantly, shaping the reader's understanding.
False Dichotomy
The article presents a clear false dichotomy: either Dine Brands implements the proposed changes, or the company will face a decline, including a dividend cut, punitive refinancing, and ultimately, acquisition by private equity. This simplistic framing overlooks the possibility of other scenarios or solutions. It presents a limited view of the options available, possibly forcing the reader into accepting the author's proposed solution.
Sustainable Development Goals
The article details the decline of Applebee's and IHOP, impacting franchisees' livelihoods and the broader economy. Years of underinvestment, rising costs, and a board unwilling to confront structural issues have led to a significant drop in stock value and potential job losses. The negative impact on franchisees and the potential for business closures directly relates to SDG 8 which promotes sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all.