Applebee's Wonton Tacos and $1M Dual-Brand Conversions Drive Dine's Q3

Dine Brands grew revenue 15.1 percent to $248.9 million in Q3, while adjusted EBITDA stayed flat at $49 million. The gap tells the story. Sales growth came primarily from additional company-operated restaurants, not from a surge in guest demand.

The menu engine is producing results, though unevenly. Bacon Cheeseburger Wonton Tacos became Applebee's strongest new appetizer launch since the pandemic, surpassing Loaded Potato Waves from the prior quarter. The launch traces back to a decision made nearly two years earlier: an eight-quarter pipeline committing to one new entrée and one new appetizer every quarter.

"What you're seeing this year is the result of all that work for the past year and a half," CEO John Peyton said.

What did the sales numbers show?

Applebee's domestic same-store sales rose 0.9 percent. IHOP posted 0.8 percent growth and beat Black Box traffic benchmarks for a seventh consecutive quarter. Traffic stayed negative at both chains. Menu pricing ran 3–4 percent, which means pricing, not visits, carried the comp.

The quarter started strong. July benefited from Dollarita and the wonton tacos. August and September softened. Peyton blamed two weeks without television advertising in August and a September promotion that failed to match the earlier launch. The pattern is a familiar one: a hit promotion does not guarantee repeat visits.

Applebee's also cut its NFL partnership investment after returns fell short. Remaining NFL activity centers on off-premises wings offers, leaving TV advertising tied more directly to food and value.

Who is actually coming through the door?

The customer base remains split by spending power. Higher-income guests visit more often. Price-sensitive consumers substitute quick-service meals or eat at home. Dine advertises accessible entry points, then merchandises premium products in the restaurant.

Value platforms accounted for 25 percent of Applebee's transactions and 22 percent at IHOP — steady with recent quarters, so no flood of value-only guests. Within Applebee's 2 for $25 platform, 68.5 percent of customers chose a higher-priced tier, up from 61 percent in Q1. Peyton reads that as early willingness to pay a few extra dollars. One quarter does not confirm a trend.

Gen Z share at Applebee's grew quarter-over-quarter and year-over-year. "We're getting better at finding them on social channels and telling the stories in ways that resonate," Peyton said. The O-M-Cheeseburger, inspired by a discovery in Japan, was built for the cheese-pull camera. The Ultimate Trio targets customization and sharing.

What about operations and off-premises?

IHOP cut table turn times by 11 minutes over two years. Faster turns shorten visits and open seats during peak weekends. Catering sales rose 44 percent year-over-year, helped by new packaging that separates hot and cold items, better catering-app presentation, and franchisees training GMs to court schools, public safety departments, and businesses.

"It is still a small portion of the to-go business, but one that we believe has significant upside," Peyton cautioned. Off-premises comps rose 5.6 percent at IHOP and 1.8 percent at Applebee's.

How big is the dual-brand bet?

Sixty domestic dual-brand Applebee's-IHOP restaurants were open at the time of the call, with 14 more under construction. Peyton targets 80 open or under construction by year-end and calls the 2027 pipeline the strongest of his six-year tenure.

The economics are the draw. A typical conversion costs about $1 million with a roughly four-year payback. Dual-brand locations generate 1.5–2 times the sales of the standalone restaurants they replace, and the added revenue carries little incremental operating cost. Two-thirds of tickets include items from both menus.

Applebee's standalone remodel program is also ahead of plan: 107 Looking Good renovations completed through Q3 against an annual target of 100. Remodeled units see at least a mid-single-digit sales lift, traffic-driven, with Dine contributing financially.

What is next for the company-operated estate?

Dine owned 136 restaurants at quarter-end and plans to refranchise them over time. The oldest acquired group is profitable at restaurant EBITDA, and franchisees have expressed acquisition interest. Company operation also gives Dine direct exposure to staffing, food waste, training, and its Toast rollout, including server handhelds.

All of this follows the board's rejection of an unsolicited acquisition proposal it deemed inadequate and substantially below the company's value, alongside adoption of a stockholder rights plan.

Q4 has opened mixed: softer Applebee's sales, continued IHOP momentum. Dine is tracking toward the low end of full-year guidance. The pipeline, conversions, and remodels will need to outperform pricing to close that gap.