Q2 2025 Dine Brands Global Inc Earnings Call
Good day and thank you for standing by.
Welcome to the Dine Brands Global, Second Quarter 2025 Earnings Conference Call.
At this time, all participants on a listen-only mode.
At the speaker's presentation, there will be a question and answer session.
To ask the question during the session, you will need to press star 1 on your telephone. You will then hear an automated message advising. Your hand is raised.
To withdraw your question. Please press star 1 1 again.
We ask that you limit yourself to 1 question and 1 follow-up. Please be advised that today's conference is being recorded.
I will now like to hand the conference over to your host today. Matt Lee senior, vice president finance and investor relations you may begin.
Good morning and welcome to Dian Brand's Global's second quarter conference call. This morning is call will include prepared remarks from John Payne CEO and president of Applebees and advanced chain CFO.
Following those prepared remarks Lawrence, Kim. President of IHOP will also be available along with John Advanced to address questions from the investment Community during the Q&A portion of the call.
Please remember our Safe, Harbor regarding 4 looking information, during the call management will discuss information that is forward-looking involves known and unknown risk, uncertainties and other factors which may cause the actual results to be different than those expressed or implied.
Please evaluate the forward-looking information in the context of these factors which are detailed in today's press release and 10 Q filing.
the forward-looking statements are as of today and we assume no obligation to update or supplement these statements,
We will refer to certain non-GAAP financial measures, which are described in our press release and available on Dine Brands' Investor Relations website.
For calendar planning purposes, we are tentatively scheduled to release our Q3 2025 earnings before the market opens on November 5, 2025, and to host the conference call that morning to discuss the results.
With that is my pleasure to turn the call over to dine brand. CEO, John, Payton, good morning, everyone. Thanks for joining us today. And today, I will share dyn's Q2 results and discuss Trends in consumer Behavior.
I'll provide updates on our Brand's key priorities and then Vance will discuss our financial results and our updated full year outlook.
Dying carried momentum from March into the second quarter, delivering improved sales and traffic across Our Brands. We achieved this progress by remaining committed to our 3. Main priorities enhancing our menu and value platforms communicating Our Brands value more effectively through improved marketing and elevating the guest experience.
This focused approach along with strategic Investments, helped us showcase. What makes our brand special, a welcoming atmosphere for friends and family, Dependable value and craveable food? That brings people together
I'll begin by sharing thoughts on consumer Behavior overall, we continue to operate in a competitive environment. Consumers are still feeling macroeconomic pressure and as a result guests continue to manage their check by ordering fewer Beverages and appetizers as well as trading down to lower price items on our menus.
Versus q1 at Applebee's. The value mix was approximately 30% in Q2 and at IHOP, the mix was about 19%.
With that, I'll walk through our key financial results.
Applebee's reported a 4.9% increase in comp sales and IHOP posted comp sales of negative, -2.3
Applebee's outperformed blackbox in both sales and traffic. Traffic was the primary driver of comp sales and was positive for the first time since q1 2023.
And notably IHOP achieved. Its second consecutive quarter of traffic outperformance relative to blackbox.
Our adjusted ebit die was 56 million compared to 67 million in the same quarter last year.
Adjusted free cash flow was 49 million compared to 53 million in 2024.
And last, we recently completed and are pleased with the outcoming of our refinancing, which you'll hear more about from Vance.
So now, I'll share some updates across our portfolio, starting with Applebee's in Q2, Applebee's achieved, positive, comp sales for the first time. In 2 years supported by a significant increase in traffic, this allowed Applebees to outperform blackbox in both sales and traffic for the full quarter which is a clear indicator of our improved performance within the segment. We noticed this positive shift starting in March which continued throughout Q2 and even into Q3 so now let's talk about menu innovation.
We're introducing a new entree each quarter, that is meant to appeal to our core Applebees fans and also capture the next generation of loyal guests.
To support this effort, we'll introduce a new menu item via the 24 section of our menu, which is a pillar of our everyday value platform.
And q1. We introduced our Bourbon Street Cajun pasta and Q2 we introduced new Skillets and steak. And a few weeks ago, we debuted our chicken parmesan fetuccini all within our 2, 4 menu pairing. This new menu Innovation with our 2. For 25 value platform is a key contributor to our traffic and sales growth.
Off premise is also a key driver of sales improvement over the past year. And we've made a focused effort to evolve our strategy to meet our guests where they are including promoting National campaigns on this channel and introducing exclusive off- premise campaigns year to date off. Premises posted, positive sales and traffic every month with Q2 seeing a positive 7.6% lift in sales.
On the marketing front, we've strengthened our in-house team and significantly expanded our social media capabilities. Enabling us to amplify our brand presence and make social media a central element of our marketing.
In just the past 3 months, our engagement numbers are multiplying on Tik Tok video views have increased over 500%. User reach has grown 760% and likes have climbed nearly a thousand percent across X and meta. We're seeing 215% increase in engagement.
these figures show the benefits of our more agile in-house LED approach to social storytelling and the impact of meeting culture in real time, where it lives
and last to touch on our efforts to modernize the brand and Elevate, the guest experience, the look and good remodel program continues to progress 9 of our top 10 franchises representing. 75% of the app will be system, have already elected to accelerate remodels of their restaurants this year and we expect to complete well over 100 remodels by year end.
We were pleased with Applebee's, Q2 performance, positive, comp sales, positive traffic, and growing momentum across operations and marketing. All of this reinforces our confidence that we have the right strategy in place
We're not satisfied because we know we have more potential and our team and our franchisees are an energized and ready to press ahead to become even more relevant and more competitive.
Now moving on to IHOP, the house, faves menu continues to impress driving incremental, traffic and dollar, margin for franchisees during the quarter. This year IHOP beat blackbox traffic metrics every month. And we also saw a sequential Improvement in comp sales in Q2 versus q1 check Trends. Also improved as the quarter progressed supported by a new strategy that amplifies awareness of our premium price items in our restaurants.
After a successful in-market test, which produced increases in both traffic and sales and all test markets. We're excited to expand the house. Faves value platform from 5 to 7 Days Nationwide. Later this year.
Launched. And now in Phase 2, we're working on increasing check averages by leveraging a barbell strategy and highlighting other higher price items and promotions such as our pancake of the moment.
On the marketing front, similar to Applebee's, I have also recently brought the social creative and content teams in-house to drive in-the-moment conversations and engagement with a wider audience, particularly Gen Z. Consumers, quarter over quarter, IHOP achieved over 400% more engagement and increased followers by 30% across TikTok and Meta, creating more conversations with new fans.
IHOPs, exploring new ways to connect with guests Beyond social media in Q2 IHOP partnered with Amazon Prime, and NASCAR to create a custom spot with Dale Earnhardt into different platforms, and cultural moments to stay on top of mind with guests.
The IHOP field team has significantly enhanced restaurant operations by encouraging a strong focus on foundational basics.
By increasing adoption of server, tablets and reducing the number of product Windows. We've improved order accuracy by 5 percentage points and we've improved table turns by 4 minutes a year to date.
Building on this progress, we continue to improve restaurant, profitability by focusing on menu Innovation, Labor Training, and Technology.
IHOP continues to see steady Improvement in traffic and comp sales supported by the success of house, faves and strategic moves, like expanding, value offerings, bringing creative in-house and launching new Partnerships. Are keeping the brand relevant and well, positioned for continued progress in the second half of the year.
And now to talk about fuzzies in June fuzzy launched, its first fast casual plus location in Sugarland Texas. This new format combines the convenience of fast, casual dining with the hospitality of a full service restaurant. We've previously discussed our goal to leverage Fuzzy's, full bar offerings and this new service model encourages guests to order a second drink or a second taco.
This is part of fuzzies, plan to reposition the restaurant in a way that will drive more sales growth.
Based on this potential as of today, fuzzies has added 5 new franchises and opened 3 new restaurants.
Turning to our international business. We continue to have positive engagement with both new and existing International franchises around development. Expanding our already robust dual brand pipeline, the unit growth in the international market is helping offset some macroeconomic, headwinds that impact sales and we remain on track to nearly double our total International dual brand restaurants, by the end of the year.
Year.
During the quarter, we opened our first dual-brand, non-traditional travel center location in Mexico. We also opened our first non-traditional airport IHOP in Felipe Ángeles International Airport in Mexico City.
We remain bullish about the white space opportunity in Latin America and are excited to introduce new Concepts and formats. In these key markets,
And last we recently signed a development with a franchisee in Saskatchewan Canada to open 3. Dual brand stores over the next few years.
Now a brief update on our company-owned portfolio: we added 12 Applebee's to our company portfolio in May and now operate 59 Applebee's, 10 IHOP, and 1 Fuzzy's, for a total of 70 company-operated restaurants representing approximately 2% of our total restaurant count.
We have plans in place to convert over 10 of these restaurants into dual Brands and are excited about the opportunity to further prove that concept.
Our strategy here while maintaining our asset light model is to reinvest in our system to improve the health of the brands and help Advance our long-term goals. We're doing this by accelerating, our remodeling efforts improving operations and investing in local marketing. All of which will drive higher sales and profitability at the 4-all level.
Our own portfolio showed solid progress in Q2 with comp sales, improving over q1 and now performing near the system average.
So overall, we're pleased to see the steady Improvement across our portfolio. Resulting from our deliberate steps to enhance performance and support long-term growth through strategic ownership and innovation.
And finally, to discuss our development plans in more detail.
Our development efforts continued to gain momentum with dual brand growth and new restaurant formats, playing a key role in our success on July 8th. Our second domestic dual brand opened in Uvalde, Texas and is owned by the same franchisee who built the first domestic dual brand restaurant in Seguin.
Was a standalone single branded restaurant. While it's early sales out of the gate are approximately 2 to 3 times, higher than the pre- Dual brand restaurant, our first 2, domestic dual brand restaurants now, represent a compelling case study
For example, inspired by our 20, International dual Brands a seasoned IHOP franchisee acquired, an app will be portfolio in 2024 with the intent of converting, 8 locations to dual Brands. By the end of 2026 working together, we apply learning from both domestic and international openings to build expertise in how best to integrate Applebee's and IHOP under 1 roof.
With the second restaurant in Uvalde, the franchisee was able to significantly reduce construction costs as well as the construction and training timelines and was able to open the restaurant in 4 weeks.
Franchisee interest for dual Brands remains strong and our pipeline continues to grow the initial results. From domestic dual-brand restaurants and the demand from franchisees. Speak to the uniquely complimentary day parts of the 2 Brands. There's a lot of demand for building dual Brands. And our pipeline is over subscribed for 2026. We look forward to working with more franchises to further, enhance our expertise, and executes the Strategic priority.
We remain on course, to open at least a dozen dual Brands by year end.
And so with that, I'll turn the call over to Vance who will speak to the updated guidance and walk you through our financial performance for the quarter in more detail.
Hey, thanks. John, you know, on the top line Consolidated total revenues increased 11.9% to 230.8 million in Q2 versus 26.3 million in the prior year. It's primarily driven by an increase in company restaurants.
Mainly due to the Acquisitions of Applebee's. And I have restaurants prior to the second quarter of 2025 and it's offset by a decrease in franchise revenues and a decrease in rental income.
Our total franchise revenues decreased 1% to 174.7 million compared to 176.5 million for the same quarter of 2024.
Excluding advertising revenues franchise revenues, decreased 0.8%.
Rental segment revenues for the second quarter of 2025 decreased compared to the same quarter of 2024.
Primarily due to lease terminations.
Jenna's expenses were $50.8 million in Q2 of 2025, up from $46.9 million in the same period of last year, due to an increase in compensation-related expenses and an increase in professional services fees, both due in part to the G&A expenses related to company restaurant operations, as well as dual brand and remodeling initiatives.
Adjusted ibida for Q2 of 2025, decreased to 56.2 million from 67 million in Q2 of 2024.
Adjusted diluted EPS for the second quarter of 2025 was $1.17. Compared to what adjusted diluted EPS of a $1.71 for the second quarter of 2024.
Now, turning to the statement, cash flows.
We had just the free cash flow of 48.7 million for the first 6 months of 2025 compared to 52.9 million. For the same period of last year, driven by a decrease in principle receipt from notes and Equipment, contracts receivable and an increase in capital expenditures and it's partially offset by an increase in cash flows provided by operating activities.
Cash provided by operations at the end of the second quarter of 2025 was 53.1 Million compared to cash provided from operations of 52.2 million. For the same period of 2024. The increase was primarily due to the postponement of income tax payments, due to Wildfire relief offset by the decrease in segment profit and higher GNA expenses.
Capex through Q2 of 2025, was 9.3 million compared to 6.8 million for the same period of 2024. And we finished the second quarter with total unrestricted, cash of 194.2 million, compared with unrestricted cash of 186.5 million. At the end of the first quarter,
as John mentioned, we were pleased with our brief financing transaction and the overall outcome
Our new 600 million, senior secured notes has a fixed rate, coupon of 6.72% per year, and and anticipated repayment date of June of 2030.
5 million variable funding notes to June of 2030 as well.
Regarding Capital, allocation, you know, organic investments will continue to be a focus along with balance sheet management and returning Capital to shareholders.
Key initiatives, include remodeling the Applebee's system where we're providing an early adopter incentive for franchises and we modeling and converting company-owned restaurants to dual brand restaurants, all of which will have an impact on our pnl.
And BuyBacks and dividends we repurchase 6 million in shares and paid a million dollars in dividends in Q2 of 2025.
We continue to remain committed to returning, Capital to shareholders, now that our refinances complete while also ensuring we invest in our business and maintain a healthy balance sheet.
Next, let me discuss Applebees performance.
Q2 Saints, restaurant sales were positive 4.9%.
Average weekly sales in 2025 were 58,000, including approximately 12.8 thousand dollars from off premise or 22% of total sales of which 11.5% is from to go and 10.5%. Is from delivery.
as a reminder, our premise, uh, positive 7.6% left in sales in Q2,
IHOPs, Q2 same restaurant sales, were negative 2.3%.
Which is an improvement from q1.
Average weekly sales were 37.8 thousand dollars that includes 7.6 thousand dollars from off premise, or 20% of total sales of which 8% is from to go and 12% is from delivery.
Let's turn to Commodities Applebees commodity costs in Q2, decrease by 0.8%. And IHOP commodity costs increase by 8% versus the prior year.
Our supply chain Co-op cscs continues to expect pricing in 2025, Applebee's to be flat to slightly down.
At IHOP, we continue to expect commodity costs to increase by mid single digits for the 4 year, driven by elevated, egg pricing and coffee.
While egg prices are up from a year ago, we have seen prices continuously soften since their peak in March and are constantly working with our suppliers to ensure the availability of Supply in this challenging environment.
as we mentioned on our prior call,
The Tariff situation remains very fluid as a result, our forecast for commodity costs incorporate the effect from existing tariffs to date, but do not reflect the potential impact of future tariff changes or trade policy.
Cscs continues to work, across both systems, to identify additional cost, savings opportunities, and support restaurant. Profitability initiatives through both operational improvements and input costs.
To date in 2025, we have implemented, projects, resulting in over 35 million dollars of annualized. Cost savings across both systems and we continue to partner with cscs to leverage, our scale and make progress on our cross-functional restaurant profitability initiatives.
Before turning the call back over to John for Q&A. I like to provide an update on our guidance for the year.
As you heard from John, we're seeing positive results from our key priorities, and we remain confident that we are deploying the right strategy to drive traffic sales and unit growth.
Because of these early positive results we do see an opportunity to further invest in the business and to accelerate our dual brain opportunity, as well as strengthen our company-owned portfolio, which will improve the health of the brand and drive growth over the longer term through comp sales and unit growth.
As such, we're updating our full year guidance as follows.
Starting with the top line for both Brands based on our recent Trends and the continued evolution of our value platforms. We now expect Applebee's domestic systemwide comp sales to be between positive 1% and positive 3%.
Compared to the previous range of -2% to positive 1%.
At ihob. We now expect domestic systemwide comp sales to be between negative 1% and positive, 1% compared to the previous range of negative - 1% to positive 2%.
DNA or ibra, and our capex guidance.
Or raising our GNA. Guidance to 205 million, to 210 million compared, to our prior range of 200, million to 205 million.
This includes non-cash stock-based compensation expense and depreciation of approximately $35 million.
On ibida. We're reducing our range to 220 million to 230 million compared, to our prior range of 235 million to 245 million.
Lastly, we're increasing our capex. Spend to be in the range of 30 million to 40 million compared, to the prior range of 20 million to 30 million on development. We're maintaining our guidance for both Brands which for Applebees is between 20 to 35 net fewer domestic restaurants. And for IHOP, it's between 10 and fewer domestic restaurants to 10, net, domestic openings.
With that, I'll hand it back over to John.
Thanks Vance, before we open up the line for questions. The quick summary of what we discussed today, both brands are enjoying improvements in sales and traffic both brands. Have new value campaigns, new advertising messaging and are racing to improve their social media engagement and in partnership with our franchisees, both brands are improving operations, and growing guest satisfaction, our strategic priorities are simple and clear and they're working.
As always, we appreciate your time and continued interest in Dine Brands. With that, I'll turn it over to the operator to open the line for questions.
Thank you.
Ladies and gentlemen.
Please press star 1 on your telephone, then wait for your name to be announced.
To withdraw your question. Please press star 1 1 again.
Please limit yourself to 1 question and 1 follow-up and then return to the queue for additional questions.
Please stand by while we compare the Q&A roster.
Our first question comes from the line of Jeffrey Bernstein with Barclays. Your line is open.
Hi, thanks. Good morning. This is product on for Jeff.
It was really encouraging to see such strong, uh, performance at Applebees during the quarter. Uh, John last call you mentioned that you're leading heavier into the 2 for 25 platform and lately we've seen, um, 3 iterations with sizzling steak. All you can eat and now chicken parm fettuccini. Just wanted to ask how you sustained good operations with such frequent changes. Um, you know, it just adds too much complexity or is is is there something there that? Um, you know, the operators just can uh sustain and you also mentioned that it was around 30% value, mix in the second quarter which actually declined, where do you feel the optimal level is? And can you share any learnings, in terms of guest feedback value scores and intent?
To return. Thanks.
Hey, good morning product, it's John. Um, excellent combination of 4 questions in 1, well done. Um, and so you and you're absolutely right that we had strong performance in both traffic and sales at app will bees. Uh, during the the first 2 quarters that we saw continued into July, uh, driven exactly by 2 for 25. And so, our strategy is is to lean into 2 for 25 as our consistent and primary marketing message for the year and our strategy in partnership with our franchisees. Um, and their enthusiastic support is to introduce a new entree, um, each each quarter, as you saw that, we did, uh, in terms of complexity, you know, this is what our franchisees do best. They, they have, they have in conjunction with us, great processes and great training, uh, in order to, uh, introduce these new items, we test them in our corporate kitchen, we test them with our franchisees before they roll out, broadly and so, all of the operations, Shakedown, and whatever challenges.
There might be are worked out before we before we roll. So no issues there. In terms of the value mix we fell slightly to 30% and in the last you know, about a year and a half we've been running it about a third of our menu, being the value mix which is higher than historical. So I'm not sure exactly what optimal is. But you know, I do know that, uh, running at about a third is higher than than typical and we're seeing it begin to slowly.
Tick down uh, just in the last quarter or so.
And in terms of guest feedback, I think the traffic speaks for itself. Um, each of those, each of those Entre, the pasta the sizzling steak. And now the chicken parm have been hits that are are driving are driving traffic, uh, and we're getting great feedback not only from that signal, but as well as just the research we do, when we intercept with guests,
Color. I appreciate it. Thanks.
Thank you.
Please stand by for our next question.
Our next question comes from the line of Bryant Mullen with Piper Sandler.
Yolen is open.
Hey, thank you. Uh, wanted to ask about IHOP in the house safes platform. You know with what you've seen thus far, are you happy with how this has impacted the franchisee profitability at the store level? And and I I imagine the answer is yes because you're expanding it to 7 days a week now. So if you could just give a little more color behind
you know that decision and why extending it to the weekend is is the right 1 for IHOP.
Good morning, Brian. Lawrence will take that question.
Morning, Brian. Yes. Um, as you just mentioned and as John mentioned earlier, we are expanding later this year, uh, from 5 days, which we started. I would say late last, uh, year in October. And then, uh, We've continued to see the house raise Monday through Friday program. And so, uh, based on the tests that we did in Q2, which tested the 7-Day every day value, uh, we did see both, uh, positive results in traffic and sales. So our franchisees are supportive along with the brands and, uh, delivering an everyday platform.
Okay, thank you and just a follow-up on. I have, I guess. Lawrence while while we have you is just, I think 1 of your focus is reducing operational complexity. Um, you know, with another couple months in the role, just give a sense of where you are in that Journey, you know, any early wins and then looking forward, anything, particularly uh bigger impactful that you uh, are focused on right now.
Yeah. Absolutely. So when I joined the organization earlier this year, 1 of the key Focus areas from operations was to reduce complexity. And so I've been on a, a ton of restaurant visits around the nation, uh, talking to the team members, General Managers, uh, and franchises. And, uh, there are a few key areas that we identified as an operations team to just get laser focused on. Uh, number 1 is, uh, you know, create I guess, uh, reduce complexities in the back of house. And so, just in all the analyses that we've been done over the past few months we've identified. Um, number 1, speed Improvement areas, which we've leveraged, uh, our, our technology platforms, like our tablets which now are in 96 uh, plus percent of our restaurants and that's helped, uh, you know, our team members, our servers, just amplify speed and just get the orders accurate. The second is for Cooks, uh, it is complex, you know, there are quite a few number of items in our menu, but, uh, at last,
Last year and the year prior we had a you know over 20 some ltos and we reduced that by more than half and that of course is created. Uh, just ease and more greater muscle memory for our cooks. And so that is also improved in just reducing complexity and improved their uh, speed and cook time. And that's why our results in terms of speed, and table, turns have improved by over 4 minutes, this quarter.
Thank you.
Thank you.
Thank you.
as a reminder, ladies and gentlemen, that star 1 1 to ask the question,
Please stand by for our next question.
Our next question comes from the line of Todd Brooks with the Benchmark Company. Your line is open.
Hey, thanks for taking my question. Um, I wanted to focus on the path forward with the corporate-owned stores and just...
John, you're thinking about maybe the the duration, and the steps that need to be taken to get these, uh, stores back to profitability, what sort of window are you looking? Uh, for us to judge?
That, uh, effort against how long do you think it will take?
Good. Good morning, Todd. Yeah, when it comes to the own stores, as I said, we've got 70 restaurants now which is about 2% of our portfolio, uh, and we've put in place a strong operating team to manage them, and we're pleased with the progress. We're seeing we've, we've moved from, for example, the the bottom tier in terms of sales and profitability to about the mid.
Here, you know, among all of the franchises and I think in terms of how long you should think about holding them, we think plus, or minus 3 years in terms of what it would take to improve operations to the point that we can refrain the restaurants. Um, you know, for for an appropriate, an appropriate valuation and you know I imagine over the next couple of years we'll have portfolios entering and leaving at different times and always having somewhere around this 2 3 percent ownership.
Yeah, I guess I didn't ask the question. Well, John, I was asking more within.
How those sit on the income statement? Now, when do you see
These neutral profitability on the dime... Oh, income statement. Thanks, understood. Um, I'll have the answer to that.
Thanks.
Todd. You know here's how how we think about it, right? So as as as John mentioned right we took these back at little or no cost to dine in terms of purchase price. And you know, the goal is to remodel through invest to a franchising, but the these over time and these restaurants they're they're in good markets with great potential. But in the meantime, doing this transition period, right? The the performance is is a little choppy primarily due to 3 things. Um, and the first the first portion is, is liquor sales. You know, due to this transition period, we have to reapply for liquor sales for our restaurants and that takes some time. And in the meantime before the liquor license is granted, we can't sell liquor and that's a good portion of our of our revenue and profit for each restaurant. So that's, that's driving and you know, as a Q2 about half of the portfolio has has liquor right? So you can imagine as we get
This liquor back.
Profitability comps, everything else will will come with it. The second thing that uh, you know, that's
Causing some of the, you know, the noise in the meantime is constructions.
So, we have to close these restaurants for remodeling and do a brand conversion. And so, while the restaurants are closed, we still have fixed costs, right? But it's all one-time, transitory in nature. We're going to get over that.
And then and then profitability will be here. And then the third thing, the third portion is investing in in Staffing and training. Um, you know, the the restaurants again like I said have great potential but they didn't understand and under training. So we need to improve the fundamentals and and making we're making great progress, but this does create some noise in the meantime, you know, the disruptions are are sort of 1 time in nature transitory nature, but we fully expect to improve the operations, you know, the guest experiences and profitability of the portfolio quarter by quarter in terms of the next part of your question, which is, when do we expect them to be properly? You know, Mutual possibility. I think, once we're through this transition period and that the performance will improve quarter by quarter as we finish construction restaurant by restaurant as we get liquor license, right? So, but the way I think about it, in terms of how how you build the model, I think I I, you know, the
The auv Run rate, auv for this. These restaurants
this part of the country, we're probably thinking about 2 2 and a half million dollar range in that sort of, uh,
Average and then if we look at system why you know, 4 wall margin, probably should be in the low to mid teens in terms of 4 Low margin and then you got to factor in call it somewhere in the 5, to 6% GNA range. So that gets you to a run rate of of margin percent for the portfolio. Going forward. There is a very clear path to to get there, right? A lot of this stuff we just got this, just timing. And, and so. So we're, we're fairly excited about the progress. We're making and, uh, you know, we're happy to, to have this great portfolio of restaurants, to, to prove our, uh, accelerate our initiatives that we we care about.
That was great detail. Thanks fans.
Thank you.
Ladies and gentlemen, as a reminder, to ask the question, that's start 111 on your telephone.
I'm showing no further questions in the queue.
I would now like to turn the call back over to John Payton, Don France, CEO and president of aies for closing remarks.
Thanks thanks to WAND. I just want to check 1 more time. If there's questions because we we do see that we had some people join just in the last minute or 2 that have not asked a question and just want to check if there's 1 more round of questions.
Are we all good to Wanda?
I'm showing no further questions in the queue. Okay, well, thanks everyone for joining this morning. Appreciate the the, the questions and um, as Vance and I and Lawrence, and I tried to articulate today, our franchise business is performing very well. We're pleased with the progress that Applebees and IHOP have made. And the momentum that they've both demonstrated this year and we're making some very purposeful and strategic investments in our owned portfolio, in an effort to advance the Dual brand program and the renovations of the Applebees. So, good day, everyone take care.
Close the base conference call, thank you for your participation. You may now disconnect