IHOP Franchise Cost, Revenue & Review 2026
- Investment
- $2.7M – $4.2M
- Disclosed sales
- partial, no system average
- SBA charge-off
- 7.3%
- on 299 loans
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
IHOP is a full-service family-dining franchise famous for pancakes and all-day breakfast, plus lunch and dinner. Franchisees operate sit-down restaurants running kitchen and front-of-house teams across extended hours.
FranchiseVerdict summary · 2026
A IHOP franchise requires a total initial investment of $2.7M – $4.2M, including a $50K franchise fee and an ongoing 4.5% royalty[2]. The 2026 FDD on file does not yield a unit-revenue figure we can publish. SBA 7(a) loans show a 7.3% charge-off rate across 299 loans[1]. FranchiseVerdict grade: A (Strongest tier), an editorial assessment, not investment advice. Run a live ROI scan →
Sources, dates and evidence
FDD issued: · Data extracted: · Last cited check: · Staleness risk: low - issued within the last 12 months
Evidence: strong✓ Investment (Item 7)✓ Item 19 status✓ Units and owners (Item 20)✓ SBA loan coverage✓ Litigation (Item 3)✓ Financial statements (Item 21)✓ Franchisor identityhow this is scored6 of 6 headline figures on this page cite a page of the filing.
Overview
- Investment
- $2.7M – $4.2M
- 39th pct Service Resta…
- Avg gross sales
- N/A
- Royalty
- 4.5%
- 6th pct Service Resta…
- Units
- 1,693
- 38th pct Service Resta…
- SBA charge-off
- 7.3%
- % of SBA 7(a) loans not repaid · median varies by category
Quick verdict · Full-Service Restaurants · color = vs category peers
Green = favorable by >10% vs Full-Service Restaurants median · No shading = within ±10% · Red = unfavorable by >10% · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Bottom line
- COSTTotal investment $2.7M – $4.2M including a $50K franchise fee, 4.5% ongoing royalty.
- RETURNSItem 19 reports outlet revenue, but not in a form that yields a per-outlet average we can compare across brands.
- RISKVerdict A (Strongest tier), verdict score 70/100 (higher is better). SBA loan charge-off rate of 7.3% across 299 loans (near or below the 16% franchise average, based on all SBA 7(a) franchise lending, 2010–2025).
- GROWTHNegative: net -22 franchised outlets in the latest year (33 opened, 39 closed); 2 signed but not yet open (Item 20).
- FLAGItem 4 discloses a bankruptcy of an officer or of a company an officer ran, not of the franchisor. Review Item 4 for details.
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- IHOP Franchisor LLC
- Parent company
- Dine Brands Global, Inc.
- FDD Item 1, page 8 of the 2026 FDD
- Predecessor
- however
- Prior franchisor entity
- CEO title
- President, IHOP
- Lawrence Kim
- Incorporated in
- DE
- HQ
- 10 West Walnut Street, 5th Floor, Pasadena, California 91103
- Auditor
- KPMG LLP
- Audited financials
- Franchisor revenue
- $182.5M
- vs $171.7M prior year
Independent franchisee associations
- Independent Franchisee Association
Franchisee-led councils or alliances disclosed in Item 20. Indicates operator voice.
Affiliated brands
- FTO
Other brands the franchisor or its parent operates (Item 1).
Same owner · FDD Item 1, page 8
3 other brands on this site name Dine Brands Global, Inc. as parent or ultimate parent in their own FDD.
Grouped by the owner's name as each filing prints it (this page: the 2026 FDD). Spelling variants of the same group may be listed apart; a brand is never grouped with an owner its filing does not name.
Overview
About
- CEO
- Lawrence Kim
- Headquarters
- CA
- Founded
- 1958
- FDD year
- 2026
- States available
- 46
Can you afford it, and what does the money buy?
Entry cost runs 413% above the typical full-service restaurants franchise.
Source: FDD 2026 · Items 5–7
FDD Item 7 · 2026 filing
Initial investment breakdown
| Cost component | Low | High |
|---|---|---|
| Initial franchise fee | $50K | $50K |
| Working capital (3–6 mo) | $50K | $200K |
| Equipment, build-out, other | $2.6M | $4.0M |
| Total initial investment | $2.7M | $4.2M |
Source: IHOP 2026 FDD, Items 5 and 7[2]. “Equipment, build-out, other” is computed as total minus disclosed line items above.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $2.7M – $4.2M
- Top 40% of category vs category
- Liquid capital req'd
- $50K – $200K
- Top 40% of category vs category
- Franchise fee
- $50K – $50K
- Top 40% of category vs category
- Royalty
- 4.5%
- typical 6–8%
- Ad fund
- 3.5%
- typical 3–5%
- Total fee load
- 8.0%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 4.5% of gross sales |
| Marketing / ad fund | 3.5% of gross sales |
| Technology fee | $2K |
| Training fee | $65K |
| Transfer fee | $8K |
| Renewal fee | $10K |
| Inventory (initial) | $50K – $100K |
| Total fee load | 8.0% of rev |
What do units actually make?
Source: FDD 2026 · Item 19
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
No Item 19 revenue figure for IHOP is on file. The return models need a revenue figure to start from, and the operating costs that turn gross sales into a profit are in no FDD. Enter your own and the calculator runs on your assumptions — nothing here is modelled until you do.
Returns model · single-unit ROIC
What would one IHOP unit return on the cash you put in?
Illustrative category typicals — not sourced to any filing, survey or sample. Replace them with figures from franchisee validation calls before you rely on the output.
Unlevered ROIC · per unit
Your modelled return on total invested capital, before any debt financing.
—
An FDD discloses gross sales, not profit. We hold no sourced figure for annual revenue, COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
These models are for research and scenario planning only. Not investment advice. Actual results depend on your specific location, management, and market conditions. Consult a franchise attorney and accountant before signing any franchise agreement.
Item 19 · Source: 2026 FDD
Financial Performance
- Item 19 type
- gross sales
- Range (low → high)
- $288K→$6.7MCited, not corroborated — printed on page 66 of the 2026 FDD. Nothing else in our record independently restates or re-derives it.
- Cohort dispersion (min → max)
- Reporting year
- 2025
- Fiscal year the figures cover
- Source filing
- FDD 2026
- Disclosed in the 2026 filing, covering 2025
- Transparency
- 4 / 10
- vs category median 3 / 10 · above
Compared against 801 Full-Service Restaurants brands
Item 19 · by group
What the filing does disclose
Item 19 of this FDD reports performance in more than one group. We publish no single average for this brand; the groups the filing does disclose are listed below, quoted from its own Item 19 table.
Each row below is quoted from the FDD's own Item 19 table. Gross sales are not profit.
Item 19 detail
region
| Segment | Sample | Avg |
|---|---|---|
| Northeast Region - 2025 | 180 | $2.3M |
| West Region - 2025 | 423 | $2.1M |
| South Region - 2025 | 624 | $2.0M |
| Midwest Region - 2025 | 236 | $1.7M |
prototype
| Segment | Sample | Avg |
|---|---|---|
| Freestanding Prototype - 2025 | 1,271 | $2.0M |
| In-line Prototype - 2025 | 54 | $2.0M |
| Endcap Prototype - 2025 | 138 | $1.9M |
Operator outlook
What the numbers say
Data-driven interpretation of this brand's financial disclosures, fee structure, and system trajectory.
Fee burden
Total ongoing fee load of 8.0% (near the Full-Service Restaurants median).
Disclosure
Item 19 reports outlet revenue, but not in a form that yields a per-outlet average we can compare across brands.
Operator retention
System roughly stable (-0.1% 3-year CAGR) with 1,693 units.
Source: FDD Item 19 financial performance representations and publicly filed FDD data. Past performance is not indicative of future results. Verify all figures with the franchisor and current franchisees before making any investment decision.
vs Full-Service Restaurants medians
How IHOP Compares
Category median of published Full-Service Restaurants brands that report the figure; the middle half spans the 25th to 75th percentile and n counts the brands behind it. Medians are used because a few very large systems pull an average far from the typical brand. Revenue is disclosed gross sales, not profit.
Is the system healthy?
Source: FDD 2026 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 1,693
- Opened
- 33
- Last reporting year
- Closed
- 39
- Turnover rate
- 2.9%
- Company-owned
- 12
- Corporate units in the system
- % franchised
- 99%
- vs corporate-owned
- Net growth (3-yr)
- -0.1%
- Net unit change over 3 years
- 3-yr CAGR
- -0.1%
- Compounded over last 3 years
Last fiscal year · Item 20 exits and transfers
- Signed, not yet open
- 2
- 0.00 per open outlet · Item 20 Table 5
- Projected new
- 32
- Franchisor's next-year forecast
- Ceased ops
- 6.7%
- Units that stopped operating
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 12 · 46 states reported
The Territory Map
FDD Item 12 reports the state count, but the specific list isn't in our current data. The map will appear once we re-extract from the FDD or enough franchisee contacts are available.
46
states with franchisees (per FDD Item 12)
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 299
- Loan volume
- $213.9M
- Median loan
- $753K
- 50th percentile
- Charge-off rate
- 7.3%
- on 299 loans · rates vary by category · see methodology
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- 92.7%
- 5-yr charge-off
- 0.0%
- Loans approved 2021+
- Active lenders
- 80
- Defaults
- 15
- Typical loan rate
- 6.2%
- avg rate to borrowers
- Franchised industry avg
- 13.2%
- brand beats franchise avg ↓
- Jobs supported
- 2,863
- 5.3 per loan
- Lender concentration
- 17%
- top lender's share
Borrower mix: 50% went to startups / new businesses, 50% to established operators
Franchise vs independent — in full-service restaurants, franchised businesses charge off at 13.2% vs 9.7% for independents — franchising is associated with 36% higher SBA default risk in this category.
Vintage analysis
IHOP charge-off rate by loan vintage
Top lenders financing IHOP franchisees
Showing 3 of 80 lenders. The full breakdown — every lender, state distribution, interest rates & risk ratings — is in the SBA Lending Report below.
Explore lender portfolios on Bank Reports or regional data on State Reports.
Lender network · 7(a) + 504
SBA Lending Report
Full lending analysis for IHOP from SBA 7(a) FOIA data.
- Principal loss rate
- 0.0%
- Avg SBA guarantee
- 75%
- Avg interest rate
- 6.16%
- Lender concentration
- 17.0%
- Job velocity
- 5.3 per $100K
- Startup risk premium
- 0.0pp
- NAICS benchmark
- 7.4%
- NAICS 722511
- Jobs supported
- 2,863
Top SBA lendersTop lender holds 17% of loans
| # | Lender | Loans | Volume | Default % |
|---|---|---|---|---|
| 1 | TD Bank, National Association | 9 | $8.7M | 0.0% |
| 2 | Manufacturers and Traders Trust Company | 4 | $3.0M | 0.0% |
| 3 | Money One FCU | 4 | $2.1M | 0.0% |
| 4 | Banc of California | 3 | $3.5M | 0.0% |
| 5 | Synovus Bank | 3 | $4.2M | 0.0% |
| 6 | PromiseOne Bank | 2 | $2.2M | 0.0% |
| 7 | Wells Fargo Bank National Association | 2 | $2.0M | N/A |
| 8 | Mid-Atlantic FCU | 2 | $650K | 0.0% |
| 9 | Hanmi Bank | 2 | $1.8M | 0.0% |
| 10 | Renasant Bank | 2 | $841K | 0.0% |
Geographic failure vector
| State | Loans | Defaults | Rate |
|---|---|---|---|
| MDMaryland | 10 | 0 | 0.0% |
| NYNew York | 10 | 0 | 0.0% |
| GAGeorgia | 5 | 0 | 0.0% |
| NJNew Jersey | 5 | 0 | 0.0% |
| SCSouth Carolina | 5 | 0 | 0.0% |
| VAVirginia | 5 | 0 | 0.0% |
| MEMaine | 4 | 0 | -- |
| FLFlorida | 2 | 0 | 0.0% |
| WAWashington | 2 | 0 | 0.0% |
| ARArkansas | 1 | 0 | 0.0% |
SBA 7(a) lending trend
Borrower profile
Source: SBA 7(a) + 504 FOIA loan-level data, matched by FranchiseVerdict
What could kill this investment?
SBA loans charge off at 7.3% — 54% below the 16.0% national norm, i.e. lower lender-observed risk.
Source: SBA 7(a) FOIA · FDD Items 3, 21
Risk analysis
FranchiseVerdict rating + FDD Items 3, 4, 8, 16, 21
Risk & Legal
IHOP presents meaningful investment risk due to declining unit growth, missing financial transparency (no Item 19 net income), extensive litigation history, and unproven profitability metrics relative to substantial capital requirements.
Bankruptcy (Item 4)
Subject: an officer. An officer’s own bankruptcy or a company an officer ran, not the franchisor’s
bankruptcy in the United States Bankruptcy Court for the District of Delaware due to COVID-19-related business pressures. YogaWorks has its principal place of business at 2215 Main Street, Santa Monica, CA 90405. 11 IHOP-TR FDD – 03/26
Audited financials (Item 21)
Yes · KPMG LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
IHOP Franchisor LLC audited financial statements, fiscal years ended December 28, 2025 and December 29, 2024 (in thousands). Total revenues comprise franchise revenues (royalties, advertising fees, franchise/development/other fees) plus financing revenues. Audited by KPMG LLP (San Diego, CA); FY2024 audited by other auditors. Dine Brands Global, Inc. parent financials also included.
ⓘ These are the parent company's consolidated financials (the parent guarantees the franchisor), not this brand's standalone results — the figure reflects the whole corporate group, not this brand alone.
Supplier relationship · Items 8 & 16
- Franchisor sells you products: Yes
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
Score breakdown · what drove the 70 / 100 verdict
- 01MINORUnit count declining 1.5% YoY indicates contracting system despite 1,642 locations
- 02HIGHExtensive litigation history including fraud, ADA compliance, and employment class actions suggests operational and compliance challenges
- 03MEDHigh royalty burden (4.5%) combined with undisclosed net income creates profitability uncertainty
- 04MINOREviction and restraining order actions against former franchisees indicate potential franchisor-franchisee relationship stress
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 8.0% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2026 · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 20 years |
|---|---|
| Renewal term | 10 years |
| Allowed renewalsℹ | 1 |
| Territory type | Protected territory |
| Protected territory | Yes |
| Exclusive territoryℹ | No |
| Territory radius | 5 mi |
| Online sales rightsℹ | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Optional |
| Non-compete (years)ℹ | 1 year |
| Right of first refusalℹ | Yes |
| Transfer requires consent | Yes |
| Termination notice | 10 days |
| Mandatory arbitration | Yes |
| Arbitration location | Los Angeles, California |
| Jury trial waiver | No |
| Governing law | CA |
| Litigation count | 26 |
Items 10, 11
Training & Operations
- Classroom training
- 42 hrs
- On-the-job training
- 273 hrs
- Training location
- Approved IHOP Restaurant Training Program locations throughout the United States; management training includes virtual IHOP Academy Workshop
- Site selection
- Franchisee selects site with franchisor approval required
- Franchisor financing
- Offered
- Item 10
- POS system
- TRAY POS
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: TRAY POS
Item 20 · call current owners
Franchisee Contacts
1,680 owners to call
Name · phone · city · state. Extracted from FDD Item 20
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a IHOP franchise?
The total investment to open a IHOP franchise ranges from $2.7M – $4.2M, with an initial franchise fee of $50K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do IHOP franchise owners earn?
Item 19 of the IHOP FDD discloses outlet figures from $288K to $6.7M but no single average across all outlets. These are gross sales figures, not profit; the Revenue section shows what the filing reports and on what basis. Item 20 of the FDD lists current and former franchisees; asking them directly is the standard way to fill this gap.
Who owns IHOP?
IHOP is franchised by IHOP Franchisor LLC. Its parent company is Dine Brands Global, Inc.. Source: FDD Item 1, 2026 filing.
What is Item 19 in the IHOP FDD?
The FDD section where a franchisor may disclose financial performance of its outlets. Disclosure is optional and formats vary; figures are typically gross sales, which is revenue before expenses, not profit. FranchiseVerdict extracts these figures directly from the IHOP FDD and qualifies whose outlets they describe.
What is IHOP's franchise failure rate?
Based on SBA 7(a) loan data, IHOP has a charge-off rate of 7.3% across 299 loans, meaning 7.3% of franchise loans were charged off. Charge-off rates are one proxy for franchise risk, though they do not capture all closures. This data comes from FOIA-sourced SBA lending records.
How many IHOP franchise locations are there?
As of their most recent FDD filing, IHOP has 1,693 total units in the United States, including 1,681 franchised units and 12 company-owned units. 33 new units were opened in the latest reporting year.
Is IHOP a good franchise to buy?
FranchiseVerdict rates IHOP as a A-grade franchise with a verdict score of 70 out of 100 (higher is better). The grade is a deterministic score built from six weighted dimensions — financial health, unit economics, unit growth, scale, legal, and transparency — then calibrated against SBA loan charge-off rates and FDD age. Transparency is one of the six, so a filing that discloses less scores lower on that dimension than one that discloses more. Our rating is based solely on publicly available FDD and government data; we recommend speaking with current franchisees before making any investment decision. This is not investment advice.
Data sourced from public FDD filings and SBA 7(a) FOIA records. Not financial advice.
For franchisors
Are you the franchisor?
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Data extracted from public FDD filings and SBA 7(a) loan disclosures (FOIA). This information is provided for research purposes only and does not constitute financial, legal, or investment advice. Verify all figures with the franchisor's current Franchise Disclosure Document before making any investment decision.