IHOP Franchise Cost, Owner Salary & Profit 2024

Opening a restaurant franchise is both thrilling and challenging. One of the many aspects to consider is the potential success of a particular franchise within your local area. IHOP has been one of America’s most popular restaurants for over 60 years, with more than 1,600 locations across the United States and Canada.

If you’re thinking about joining the IHOP family by opening a franchise, this article will provide you with the information needed to start a successful IHOP restaurant business.

IHOP Franchise

About The IHOP’s History

IHOP, or International House of Pancakes, was founded in 1958 by Al Lapin and Jerry Lapin. The first IHOP restaurant opened in California, and the chain spread fast across the U.S. In 1973, IHOP went public on the New York Stock Exchange.

In the late 1970s, IHOP began to change its menu to compete with other pancake chains. In 1978, the menu grew to include various breakfast items, and healthy options were added.

In 1983, IHOP changed its focus from “Pancakes” to “People” and began offering lunch and dinner items. This is when they made their famous Rooty Tooty Fresh and Fruity breakfast.

In the 1990s, IHOP started franchising and opened restaurants in other countries. In the 2000s, the chain kept growing, with new places in Guatemala and Qatar.

In 2006, IHOP changed its name from International House of Pancakes to simply “IHOP.” This was a big step as the company aimed to be the top international pancake house.

Today, IHOP has more than 1,600 locations in the United States and other countries.

IHOP Franchise Model

Initial Investment$414,866-$3,374,043
Initial Franchise Fee$40,000-$50,000
Royalty Fee4.5%
Advertising Fee3.5%
Area Requirement30,000-50,000 Square Feet
Total Outlets1700 Units

How much do IHOP Franchise Owners make?

As per sources, an IHOP franchise owner makes $1,553,311 in annual revenue on average, and its profit margin is estimated at 30%.

So, corresponding to this, we can say that an IHOP franchise owner makes $465,993 in net profits on average.

This is how we calculated this figure:

Financial OverviewPercentage of RevenueAmount ($)
Individual Franchise Annual Revenue100%1553311.00
Franchise Royalty Fees4.38%(67957.36)
Cost of Goods Sold (COGS)21.88%(339786.78)
Labor (Variable)11.38%(176689.13)
Total (Expenses)70.00%(1087317.70)
Net Profit30.00%465993.30

Note: The displayed expenses are estimates based on industry averages and standard costs. Actual expenses may vary due to factors like location, business size, and market conditions. We recommend conducting detailed research or consulting with a financial advisor for a tailored financial analysis.

Payback Period Of IHOP

With an investment of $3,374,043 and a yearly profit of $465,993, we can calculate the payback period of IHOP.

So, to find out how long it will take to earn back the initial investment:

Payback Period = Investment / Yearly Profit = $3,374,043 / $465,993 = 7.2 years

Based on these figures, it will take approximately 8 years to pay back the initial investment for IHOP. This time period could be longer or shorter depending on your sales, revenue, and profit figures.

Failure Rate Of IHOP

Franchised Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change

For the Franchised outlets:

  • In 2018, the growth rate was (34)/1,655×100≈2.05%
  • In 2019, the growth rate was (7)/1,689×100≈0.41%
  • In 2020, the failure rate was (42)/1,696×100≈2.47%

According to the above-mentioned data, we can see that the franchised outlets for IHOP grew from 2018 to 2019, showing a growth rate between 2.05% and 0.41%. 

However, at the end of the year that is 2020, the company started to decline, showing a failure rate of 2.47%.

Is the IHOP Franchise Profitable?

Yes, the IHOP franchise is profitable. An IHOP franchise owner can expect to make a profit of $464,725 per year, with a 30% profit margin. The numbers show that owning an IHOP franchise can be a rewarding business opportunity.

IHOP Franchise Training And Support

IHOP offers a training program called IHOP Academy for new franchisees. The training has two parts: a six-week program with 45 to 50 hours per week and a two-day workshop held across the U.S.

Support Of IHOP

Support Of IHOP

IHOP gives help with many things like:

  • Finding the right place
  • Designing the restaurant
  • Opening the place
  • Keeping the business running
  • Making plans to get customers

IHOP Skills And Areas Of Expertise 

IHOP might give a place only to a business that plans to grow. The best partner for IHOP wants a long-term relationship and loves the brand.

They should know what works and doesn’t in the food business and how to get people to know about the brand. Experience in quality control, marketing, real estate, and supply management is needed.

IHOP Comparison

CompanyIHOPPanda Express 
Founded In19581973
Initial Investment$414,866-$3,374,043$377,100 – $1,884,000
Total Outlet17001,900
Annual Revenue$3.12 Billion$100 Billion

Frequently Asked Questions 

Is IHOP a franchise?

IHOP is a multinational pancake house restaurant chain franchised and operated by the International House of Pancakes.

How much does an IHOP franchise cost?

An initial investment to open an IHOP franchise is $414,866-$3,374,043, with a franchise fee of $40,000-$50,000.

Who is the Owner of IHOP?

IHOP is owned by Dine Brands Global, Inc., formerly known as DineEquity, Inc. Dine Brands Global owns both IHOP and Applebee’s restaurants.

How many locations does IHOP has?

The company operates in 1,841 locations in America, the Middle East, and South Asia.

Who founded IHOP?

Al and Jerry Lapin, along with early investors Al and Trudy Kallis, opened their first International House of Pancakes in Los Angeles.

Where is IHOP headquatered?

The headquarters of IHOP is located in Pasadena, California.

Leave a Comment