Dine Brands Global, Inc. Barclays 19th Annual Global Consumer Staples Conference

Thanks for having us. Absolutely.

Sure. Just to give you a sense from a demographic perspective, the demographic of the IHOP and the Applebee's guest is pretty similar. Each of them has a household income between $50,000 and $100,000 a year. We span all age ranges fairly consistently. The IHOP guests in the IHOP restaurants tend to be a little bit more urban. They skew urban versus Applebee's. Applebee's is a little bit more rural and suburban. Between the 3,000-plus restaurants, I think we're in almost every zip code in the country. In terms of consumer behavior, it's been remarkably consistent, not just for 24 months, but for 48 months and into next year. We see our guests as very value-driven. The value message that both of our brands have. At IHOP, it's $6 everyday value. At Applebee's, it's 2 for 25, so two entrees and an appetizer for $25.

Those messages are super compelling. It's important to attach an innovative or new item to that message in order to keep it fresh. When we see them in the restaurant, we do see them, I would say, moderately managing their check. I say moderately because our average check is pretty consistent in both brands for the last several quarters, yet our franchisees have raised prices 2%-3%. There's a little bit of check management. We're seeing more frequent visits from higher income guests, and we're seeing a little bit of a wash in terms of losing lower income guests and then also gaining lower income guests as I think QSR guests are trading up to full service.

We think it bounces back and forth, depending on, from a price perspective, who's in the lead. Right now, when you look at the overall increase in prices from, call it, coming out of COVID in the five years to today, Applebee's is a little bit lower than food from home in terms of the compounded growth. IHOP is a bit higher in terms of price. So we straddle home. The most important thing about competing with home is that you come to the restaurant for something you can't get at home. If we didn't have O-M-Cheese Burger at Applebee's, which is a hamburger cut in half in a sizzling skillet of cheese, and when you pull it, you get a big cheese pull, you can't do that at home.

You can't get a Dubai Chocolate Pancakes at home, and you got to give them a reason to want to come as well. It's not just the price benefit.

I will add one other thing, which is when you have a strong value pipeline like the $6 everyday value menu, some of the comments we receive are, "Wow, I can't make that breakfast at home for $6." It's not just the cost of the ingredients, but it's also the time, the cleaning, the prep, and its IHOP quality. So all these part of the value equation are critically important as these families are making decisions.

In terms of questions from investors and analysts?

Investor, yeah. Yeah. Our CFO gets most of those questions.

I get a lot of the questions around our balance sheet, and I get a lot of questions around the company-owned portfolio. The question on the balance sheet is they do a quick Bloomberg view, and they say, "Wow, you're 5 times levered. Seems really high. Are you worried now?" Because we're so highly franchised, our capital structure is we're using securitization. It's a very shareholder-friendly capital structure in terms of cost of capital, in terms of cost of light. The leverage level we have is comparable to other highly franchised companies in the sector. We definitely I don't lose sleep over our leverage level. Now, over time, as our company restaurant portfolio improves as our dual-branded takes hold of development pipeline, I think our EBITDA will grow. We'll delever. We've been in this leverage level before. That's one question. On the company restaurant portfolio, we have call it 130 restaurants that we took back from franchisees and they're some of the lower performing restaurants, but we took them back for offensive and defensive purposes.