Applebee’s and IHOP’s parent company wants to acquire another brand by the end of 2018.
“I want a brand within a year,” Dine Brands CEO Stephen Joyce told Business Insider. “We’re going to find the right brand and the right opportunity, but more than likely it’s going to be fast-casual.”
Joyce continued: “We want to get into a category that’s growing faster than the categories we’re in.”
On Monday evening, Dine Brands announced it had hired Thomas Song as chief financial officer. Joyce called Song — currently an executive at Choice Hotels International — a “deals guy” who will lead efforts to expand Dine Brands’ portfolio.
“This is what he does,” Joyce said. “He’ll sort through, globally, 2,000 brands with five filters. We’ll make 100 phone calls, we’ll have 20 meetings, maybe we’ll find one.”
Joyce says that he feels some parts of the fast-casual business are already overcrowded, including pizza, better burgers, and sandwiches. Instead, he wants Dine Brands to focus its efforts on “ethnic” and “healthy halo” categories, likely Mediterranean, Spanish, or Mexican chains. Basically, he said, he wants a brand that is like Chipotle pre-E. coli and needs capital for a major expansion effort.
“The ideal thing is we find someone who has 70 restaurants,” Joyce said. “And they go, I want to keep a piece of it but grow it to 700.”
Joyce was appointed CEO of Dine Brands — then Dine Equity — in August 2017. At the time, Applebee’s and IHOP were struggling to attract customers and facing slumping sales.
Over the last 10 months, Joyce has been tasked with kicking off Dine Brands’ turnaround. Last week, the company reported total revenue declined 1.7% to $188.1 million in the first quarter. Same-store sales at Applebee’s grew 3.3% in the US in the quarter, and IHOP’s same-store sales increased 1%.
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