IHOP Franchise FDD, Profits & Costs (2025)
IHOP, originally founded as the International House of Pancakes in 1958, began in Los Angeles, California. Today, its headquarters are in Glendale, California.
The brand started franchising in 1960 and now operates over 1,750 locations globally. This includes the USA, Puerto Rico, Guam, and countries like Mexico, Canada, India, and Peru.
IHOP is famous for its wide-ranging menu, offering breakfast, lunch, and dinner. Beyond pancakes, its focus on high-quality service and affordable prices has helped maintain its reputation. The brand consistently evolves, keeping a strong presence through recognizable marketing and brand identity.
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Initial Investment
How much does it cost to start a IHOP franchise? It costs on average between $1,752,000 – $5,223,000 to start a IHOP franchised restaurant.
This includes costs for construction, equipment, inventory, and initial operating expenses. The exact amount depends on various factors, including the type of restaurant you choose, the location, and whether the franchisee chooses to lease or purchase the property.
| Type of Expenditure | Amount |
|---|---|
| Location Fee | $15,000 |
| Initial Franchise Fee | $35,000 |
| Construction – Inline/Endcap/Conversion | $910,000 – $1,520,000 |
| Construction – 2700 Prototype | $1,490,000 – $2,400,000 |
| Construction – Large Format Prototype | $1,590,000 – $2,900,000 |
| Construction – Dual Brand Restaurant | $900,000 – $3,500,000 |
| Major Equipment and Fixtures – Inline/Endcap | $532,000 – $740,000 |
| Major Equipment – 2700 Prototype | $493,000 – $595,000 |
| Major Equipment – Large Format Prototype | $532,000 – $664,000 |
| Major Equipment – Dual Brand Concept | $527,000 – $740,000 |
| Signage – Inline/Endcap | $30,000 – $50,000 |
| Signage – 2700 Prototype | $40,000 – $60,000 |
| Signage – Large Format Prototype | $40,000 – $60,000 |
| Signage – Dual Brand Concept | $60,000 – $100,000 |
| Smallware Package/Opening Order | $15,000 – $38,000 |
| Inventory | $50,000 – $100,000 |
| Working Capital | $50,000 – $200,000 |
| Insurance | $35,000 – $100,000 |
| On-Location Assistance | $0 – $16,000 |
| Site Approval Costs | $0 – $50,000 |
| Impact Study | $4,000 – $6,000 |
| Opening Training Support Fee | $0 – $65,000 |
| POS Setup, Training and Support Fee | $3,500 – $9,000 |
| Tray POS Software Fees (Annual) | $1,100 – $3,800 |
| EMV P2P Encryption Services (Annual) | $1,300 – $4,500 |
| Wi-Fi Services (Monthly) | $90 – $450 |
| Kitchen Display System | $15,000 – $30,000 |
| Server Tablets with Payment Device | $7,500 – $30,000 |
| Online Ordering (Monthly) | $65 – $200 |
| Mobile Device Management Fee (Annual) | $24 – $960 |
| Digital Products Service Fee (Monthly) | $0 – $350 |
| Implementation Fees | $500 – $2,000 |
| POS System Hardware | $20,000 – $60,000 |
| Wait Listing (Monthly) | $23 – $75 |
| CRM Fee (Monthly) | $0 – $150 |
| Catering (Monthly) | $0 – $60 |
| Initial Additional Training Expenses | $4,000 – $7,000 per person |
| Supply Chain Co-op Stock Purchase | $0 – $100 |
| TRAY POS Training | $600 – $1,800 |
| Terminal Device Antivirus | $240 – $600 |
| Additional Funds – 3 Months | $16,500 – $85,250 |
| Miscellaneous | $5,000 – $26,000 |
| Total – Inline/Endcap/Conversion | $1,751,798 – $3,192,865 |
| Total – 2700 Prototype | $2,302,798 – $3,937,865 |
| Total – Large Format Prototype | $2,441,798 – $4,506,865 |
| Total – Dual Brand Restaurant Concept | $1,766,798 – $5,222,865 |
Average Revenue (AUV)
How much revenue can you make with a IHOP franchise? A IHOP franchised restaurant makes on average $1,953,000 in revenue (AUV) per year.
Here is the extract from the Franchise Disclosure Document:
This compares to $1,812,000 yearly revenue for similar breakfast-style restaurant franchises. Below are 10 IHOP competitors as a comparison:
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IHOP Franchise Disclosure Document
Frequently Asked Questions
How many IHOP locations are there?
As of the latest data, IHOP has 1,655 locations worldwide, and 100% of these locations are franchise-owned. This means that all IHOP restaurants are operated by independent franchisees, with none being company-owned.
These locations span across the United States, Puerto Rico, Guam, and several international markets including Mexico, Canada, and the UAE.
What is the total investment required to open a IHOP franchise?
The total investment required to open a IHOP franchise ranges from $1,752,000 – $5,223,000.
What are the ongoing fees for a IHOP franchise?
For an IHOP franchise, the ongoing fees consist of a royalty fee of 4.5% of gross sales and a marketing/advertising fee of 3.5% of gross sales. These fees help cover the costs of brand support and national advertising, ensuring consistency across all franchise locations.
What are the financial requirements to become a IHOP franchisee?
To become an IHOP franchisee, you must meet specific financial requirements to ensure you can handle the startup and operational costs. The minimum net worth required is $1.5 million, and franchisees must have at least $500,000 in liquid assets.
These financial criteria are set to ensure that potential franchisees are well-positioned to succeed in the restaurant business and manage the associated expenses.
How much can a IHOP franchise owner expect to earn?
The average gross sales for a IHOP franchise are approximately $1.95 million per location. Assuming a 15% operating profit margin, $1.95 million yearly revenue can result in $293,000 EBITDA annually.
Who owns IHOP?
IHOP is owned by Dine Brands Global, Inc., which is one of the largest full-service dining companies in the world. Dine Brands Global also owns Applebee’s Neighborhood Grill & Bar.
The company was formed in 2007 when IHOP acquired Applebee’s and rebranded as Dine Brands Global to manage both restaurant chains under one umbrella.
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