DIN 2019 Franchise Disclosure Document Review for IHOP
Not too long ago, IHOP (owned and franchised by Dine Brands [DIN; Buy]) filed its 500+ page Franchise Disclosure Document (FDD) for 2019. In this report, we cite some of the highlights from that document following our review of it, including our review of it in comparison to last year’s Franchise Disclosure Document. For example, the footnote to the National Advertising Fee — currently 3.5% of total Gross Sales — indicates that “Commencing on January 1, 2023, the National Advertising Fee will be the greater of: (i) 2.25% of total Gross Sales or (ii) the National Advertising Fee set forth in at least 88% of IHOP franchise agreements, as amended, in effect as of January 1, 2023 (“2023 Franchise Agreements”). Commencing on January 1, 2023, the Local Advertising Fee will be (i) .75% of total Gross Sales or (ii) if the National Advertising Fee is at least 3.5%, the Local Advertising Fee set forth in at least 88% of the 2023 Franchise Agreements. These fees will be electronically debited from your account if we request that you participate in our electronic funds transfer program authorizing us to receive payments from you by pre-authorized bank draft, wire transfer, automated clearinghouse transfer or otherwise.” The 2019 FDD indicates that “There is currently no required local advertising fee.” We maintain our Buy rating on DIN and note the following: