Dine Brands Global, Inc. (DIN) Business

Item 1.    Business

Dine Brands Global, Inc.®, together with its subsidiaries (referred to as the “Company,” “Dine Brands Global,” “we,” “our” and “us”), owns and franchises the International House of Pancakes® (“IHOP”) restaurant concept in the full-service restaurant family dining category, the Applebee’s Neighborhood Grill + Bar® (“Applebee’s”) restaurant concept in the full-service casual dining category, and the Fuzzy’s Taco Shop® (“Fuzzy’s”) restaurant concept in the limited-service fast-casual dining category. References herein to IHOP®, Applebee’s® and Fuzzy’s restaurants are to these three restaurant concepts, whether operated by franchisees, area licensees and their sub-licensees or by the Company. The terms franchise or franchisee used throughout this document are intended to describe third parties that operate under franchise agreements. As of December 28, 2025, the substantial majority of our 3,509 restaurants across all brands were owned and operated by independent franchisees.

During the year ended December 28, 2025, we conducted our business through the following three reportable business segments:

•Franchise - consists of IHOP, Applebee’s, and Fuzzy's franchise operations which generate revenues primarily from royalties and advertising fees from 1,812 IHOP franchised restaurants, 1,520 Applebee’s franchised restaurants, and 105 Fuzzy's franchised restaurants in addition to revenues from the sale of proprietary IHOP and Fuzzy's products to our franchisees;

•Company-owned restaurants - primarily generates revenues from 12 IHOP restaurants, 59 Applebee's restaurants and one Fuzzy's restaurant;

•Rental - rental revenues are primarily from lease or sublease agreements covering 521 IHOP franchised restaurants and one Applebee’s franchised restaurant.

Most of our revenue is derived from domestic sources within our business segments, with approximately 74% of our total revenues for the year ended December 28, 2025 being generated from our two largest operating segments, IHOP and Applebee's. Revenues from Company-owned and Rental segments primarily make up the remaining 26%. Internationally, our restaurants are in 20 countries and two territories of the United States of America (the "United States") as of December 28, 2025. Revenues derived from all international operations were less than 2% of total consolidated revenues for the year ended December 28, 2025. As of December 28, 2025, there were no long-lived assets located outside of the United States. See Note 2 - Basis of Presentation and Summary of Significant Accounting Policies of the Notes to the Consolidated Financial Statements for further discussion of changes to our segments in fiscal 2025.

Our Goal

Our goal is to accelerate profitable growth and create significant value for stockholders and franchisees.

Our Strategic Priorities

Our approach to restaurant brand building centers on innovation and evolution of our existing brands, such as our expansion into dual-branded IHOP and Applebee's restaurants, as well as exploring investments or acquisitions of new concepts. We actively support our brands with focused teams that are accountable at the brand level to drive strong performance. Together with our franchisees, significant investments have been made and will continue to be made in marketing across traditional and digital channels to drive traffic to our restaurants. We are investing in technology to create more ways for customers to access our brands and in growth platforms such as online ordering, off-premise business and delivery.

We efficiently deploy capital towards investments with the highest return to maximize long-term shareholder value.  Our capital deployment may include distributions of dividends and repurchases of our common stock.

Our History

The first IHOP restaurant opened in 1958 in Toluca Lake, California. Since that time, the Company and its predecessors have engaged in the development, franchising, and from time to time, ownership and operation of IHOP restaurants. The restaurants feature full table service and high quality, moderately priced food and beverage offerings in an attractive and comfortable family atmosphere. Although the restaurants are best known for their award-winning pancakes and putting an unexpected twist on “all things breakfast, any time of the day,” IHOP is committed to accelerating growth through menu innovation, day-part expansion, off-premise initiatives and development. Prior to 2003, new IHOP restaurants were generally developed by us, and we were involved in all aspects of the construction and financing of the restaurants. We typically identified and leased or purchased the restaurant sites for new company-developed IHOP restaurants, built and equipped the restaurants and then franchised them to franchisees. In addition, we typically financed as much as 80% of the franchise fee for periods ranging from five to eight years and leased the restaurant and equipment to the franchisee over a 25-year period. We refer to this as our "Previous IHOP Business Model," which accounted for most of the activity in our Rental business segment.

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For most IHOP restaurants opened after 2003, the franchisee is primarily responsible for the development and financing of the restaurant. The franchisee uses its own capital and financial resources along with third-party financial sources obtained by the franchisee to purchase or lease a restaurant site, build and equip the business and fund its working capital needs. We refer to this as our "Current IHOP Business Model."

As of December 28, 2025, 261 franchise groups (228 domestic and 33 international) operated 1,812 IHOP franchised and area license restaurants and we owned 12 IHOP restaurants, of which 10 were acquired from franchisees in March 2025 and two were company developed. As of December 28, 2025, 228 franchisees owned a total of 1,672 domestic IHOP restaurants, including 85 franchisees that each owned one restaurant. The largest single IHOP franchisee owned 263 domestic restaurants. As of December 28, 2025, 33 franchisees owned a total of 140 international IHOP franchise restaurants. The number of international restaurants held by a single franchisee ranged from one to 20 restaurants. Our five largest IHOP franchisees owned 32% of the total 1,812 IHOP franchised restaurants.

The first restaurant in what became the Applebee’s chain opened in 1980 in Decatur, Georgia. Applebee's International, Inc., (“AII”) became a public company in 1989, which then had 100 restaurants. In November 2007, we completed the acquisition of AII, which comprised 1,455 franchised restaurants and 510 company-owned restaurants. We subsequently refranchised all Applebee's company-owned restaurants and were 100% franchised. As one of the world’s largest casual dining brands, Applebee’s Neighborhood Grill + Bar offers guests a dining experience that combines simple American fare with classic drinks and local draft beers.

As of December 28, 2025, 62 franchise groups (32 domestic and 30 international) operated 1,520 Applebee’s franchised restaurants and we owned 59 Applebee's restaurants acquired from franchisees, of which 47 were acquired in November 2024 and 12 were acquired in May 2025. As of December 28, 2025, 32 Applebee’s franchisees owned a total of 1,413 domestic Applebee's restaurants. The number of domestic restaurants held by a single franchisee ranged from one to 459 restaurants. Internationally, 30 franchisees owned a total of 107 international Applebee's restaurants. Our five largest Applebee’s franchisees owned 57% of the total 1,520 Applebee's franchised restaurants.

In February 2025, one of the first domestic dual-branded IHOP and Applebee's restaurants opened in Seguin, Texas. As of December 28, 2025, there are 28 domestic dual-branded restaurant openings.

The first Fuzzy’s Taco Shop opened in 2003 in Fort Worth, Texas and the first franchised location opened in 2009. Since that time, Fuzzy’s has engaged in the development, franchising, and operation of Fuzzy’s Taco Shops. In December 2022, we completed the acquisition of Fuzzy’s, which consisted of 135 franchised restaurants and three company-owned restaurants.

Fuzzy's operates restaurants in the fast-casual plus dining category of the restaurant industry under the name, Fuzzy’s Taco Shop. Fuzzy's restaurants' menu items feature regionally-inspired Mexican food and innovative tacos. Fuzzy’s also serves signature chips and queso, prepares guacamole and salsa made-from-scratch daily, and offers a full bar featuring signature margaritas, famous cocktails, and a selection of cold draft beer.

As of December 28, 2025, 37 franchise groups operated 105 restaurants in 14 states within the United States and we had one company-owned restaurant in Texas. The largest single Fuzzy's franchisee owned 12 domestic restaurants. Our five largest Fuzzy's franchisees owned 41% of the total 105 Fuzzy's franchise restaurants.

Franchising

Franchise Agreements and Fees

Our standard domestic IHOP franchise agreement typically provides for an initial franchise fee of $40,000 - $50,000 per restaurant and an initial term of 20 years. Under these arrangements, we generally receive franchise royalty fees of 4.5% of gross sales and national advertising fees of 3.5% of gross sales. The principal commercial terms of the franchise arrangements under the Previous IHOP Business Model and the Current IHOP Business Model, including the franchise royalties and national advertising fees, are substantially the same except with respect to the terms relating to the franchise fee, lease or sublease rents for the restaurant property and building.

In addition, we entered into a long-term area license agreement for IHOP restaurants covering the state of Florida and certain counties in the state of Georgia, and three long-term area license agreements for the province of British Columbia, Canada, Pakistan, and certain countries or islands in the Caribbean, including Aruba, Bonaire and Curacao, Bahamas, Barbados, Guyana, Jamaica, St. Lucia, St. Maarten and Trinidad & Tobago. The area license agreements provide the licensees with the right to develop and franchise new IHOP restaurants in their respective territories and provide for royalties ranging from 1.0% to 5.5% of gross sales, and national advertising fees ranging from 0.25% to 2.0% of gross sales.

As of December 28, 2025, we had signed commitments from IHOP franchisees to build 245 IHOP restaurants over the next seven years. These commitments include eight restaurants under single restaurant or non-traditional development agreements, 81 restaurants under domestic multi-restaurant development agreements and 156 restaurants under international development agreements.

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Our standard domestic Applebee’s franchise agreement typically provides for an initial franchise fee of $35,000 per restaurant and an initial term of up to 20 years. Under these arrangements, we generally receive franchise royalty fees of 4% of gross sales and national advertising fees of 4.25% of gross sales.

As of December 28, 2025, we had signed commitments from Applebee's franchisees to build approximately seven domestic restaurants and approximately 59 international restaurants over the next five years.

Our standard domestic Fuzzy’s franchise agreement typically provides for an initial franchise fee of $40,000 per restaurant and an initial term of 10 years. Under these arrangements, we generally receive franchise royalty fees of 5% of gross sales and 2% of gross sales are contributed to the Fuzzy’s Development Fund.

As of December 28, 2025, we had signed commitments from Fuzzy's franchisees to build 79 Fuzzy's Taco Shop restaurants over the next seven years.

Development of IHOP and Applebee's restaurants outside of the United States has historically been conducted through a separate development and franchise agreements. More recently, certain franchisees have entered into a multi-unit franchise agreement that governs the rights and obligations to develop a territory, in addition to terms of operating each restaurant opened in the territory. The term of a franchisee’s exclusive right to develop a territory expires when the agreement’s development schedule is completed. The term to operate the restaurant is typically 20 years, subject to applicable renewals.

Our agreements with a limited number of domestic IHOP and Applebee’s franchisees under older agreements may vary from the currently offered arrangements.

In limited instances, we have agreed to accept reduced royalties and/or lease payments from franchisees or have provided other accommodations to franchisees for specified periods of time to assist them in either establishing or reinvigorating their business. From time to time, we may also offer reduced or eliminated initial franchise fees, franchisee incentives, equipment leasing options, and periods of reduced royalties as incentive to develop new restaurants.

Advertising Fees

Advertising fees collected from our franchisees are contributed to the IHOP National Advertising Fund (IHOP NAF) or the Applebee’s National Advertising Fund (Applebee’s NAF). Contributions to the IHOP NAF or Applebee’s NAF are used to purchase various media, including television, radio, print, point of sale, mobile app, outdoor banners, billboards, online, digital, social media and other emerging media on a national, regional or local level, though most advertising is national.

Domestic and International Franchise Sites

Each franchisee is responsible for selecting the site for each new restaurant. We may consult with franchisees when they are selecting appropriate sites, and selections made by franchisees are subject to our approval. For domestic restaurants, we also conduct a physical inspection, review any proposed lease or purchase agreement for compliance with our requirements, and may make available to franchisees demographic and other studies for domestic restaurants. We make the design specifications for a typical restaurant available to franchisees, and we retain the right to prohibit or modify the use of any set of plans.

Franchise Operations

We monitor franchise restaurant operations. Company and third-party representatives make both scheduled and unannounced inspections of franchised restaurants to ensure that only approved products are in use and that our prescribed operations practices and procedures are being followed. We have the right to terminate a franchise agreement if a franchisee does not operate and maintain a restaurant in accordance with our requirements. Due to cultural and regulatory differences, we may have different requirements for restaurants opened outside of the United States. We also monitor the financial health of our franchisees through business and financial reviews.

Franchisee Relationships

We value our franchisees and strive to maintain a positive working relationship with them. IHOP, Applebee's and Fuzzy’s franchisees participate in Company-sponsored advisory groups. These groups provide a forum for franchisees to share demonstrated best practices, offer counsel and review successful strategies, while working side-by-side with management of the IHOP, Applebee's and Fuzzy’s brands. The IHOP sponsored Franchise Leadership Council is an elected and appointed body of up to 14 IHOP franchisees. The Applebee’s Franchise Business Council is a sponsored group, which consists of eight elected franchisee representatives and three Applebee's representatives. Fuzzy’s sponsors an elected body of eight Fuzzy’s franchisees plus a Fuzzy’s representative for its Franchise Advisory Council.

Company-Owned Restaurants

From time to time, we may acquire a number of restaurants from franchisees for a variety of reasons. We assess and monitor opportunities to refranchise company-owned restaurants under favorable circumstances and, historically, have been able to refranchise these restaurants to new franchisees. When these restaurants require investments in remodeling and

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rehabilitation before they can be refranchised, we typically operate the acquired restaurants to bring them back to Company standards before they are refranchised. As a result, an acquired restaurant may incur operating losses for some period of time.

Supply Chain

In February 2009, Centralized Supply Chain Services, LLC (“CSCS” or the “Co-op”), an independent cooperative entity, was formed by us and franchisees of IHOP and Applebee's domestic restaurants. CSCS has been appointed as the sole authorized purchasing organization and purchasing agent for goods, equipment and distribution services for IHOP and Applebee's restaurants in the United States.

CSCS combines the purchasing volume for goods, equipment and distribution services across the IHOP and Applebee's concepts. Its mission is to provide for its members the benefit of available goods, higher quality goods and equipment, and distribution services at the lowest possible sustainable prices. We do not control CSCS, but do have contractual rights associated with supplier certification, quality assurance and protection of our intellectual property. The operations of CSCS are funded by a separately stated administrative fee added to one or more products purchased by restaurant operators.

Industry Overview and Competition

The restaurant and related food-service industries are highly competitive and are affected by, among other things, economic conditions, price levels, ongoing changes in eating habits and food preferences, population trends and traffic patterns. The principal bases of competition in the industry are the type, quality and price of the food products served. Restaurant location, quality and speed of service, advertising, name identification and attractiveness of facilities are important. Additionally, changes in the price of groceries may influence the attractiveness of dining at home versus dining out.

IHOP, Applebee's and Fuzzy's are among the numerous restaurant chains and independent restaurants competing in the restaurant industry in the United States. The restaurant industry is generally classified into categories and segments based on various factors including price point ranges, the types of food and beverages offered, and the types of service available to customers.

IHOP competes in the family dining category against national restaurant chains such as Denny's, Cracker Barrel Old Country Store, Waffle House and Bob Evans Restaurants. IHOP also faces competition from fast-casual and quick service restaurant chains that serve breakfast.

Applebee's competes in the casual dining category against national restaurant chains such as Buffalo Wild Wings, Olive Garden, Chili's Grill & Bar, Texas Roadhouse and Outback Steakhouse, among others, as well as fast-casual and quick service restaurant chains.

Fuzzy's competes in the fast-casual dining category against multi-state restaurant chains such as Velvet Taco, Torchy's Tacos, and Rusty Taco, among others, as well as casual and quick service restaurant chains.

In addition, there are many independent restaurants across the country in the above discussed categories that are considered competition to our brands.

The market for high quality commercial real estate is also very competitive. We and our franchisees compete with other restaurant chains and retail businesses for suitable sites for the development of new restaurants. We also compete against other franchisors both within and outside the restaurant industry for new franchisees.

For further information regarding competition, see Item 1A - Risk Factors.

Trademarks and Service Marks

We and our affiliates have registered or submitted registrations for certain trademarks and service marks with the United States Patent and Trademark Office and various international jurisdictions, including “Dine Brands Global®.” We own trademarks and service marks used in the Applebee's system, including various logos and the trademarks “Applebee's®,” “Applebee's Neighborhood Grill + Bar®” and variations of each. In addition, we own trademarks and service marks used in the IHOP system, including various logos and the trademarks “IHOP®,” “International House of Pancakes®” and variations of each. Further, we own trademarks and service marks used in the Fuzzy’s system, including various logos and the trademark “Fuzzy’s Taco Shop®” and variations of such.

We consider our trademarks and service marks important to the identification of our company and our restaurants and believe they are of material importance to the conduct of our business. We own or have rights to all trademarks we believe are material to our restaurant operations. In addition, we have registered various domain names on the Internet that incorporate some of our trademarks and service marks and believe these domain name registrations are an integral part of our identity. From time to time, we may take appropriate legal action to defend and protect the use of our intellectual property.

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Information Technology

We use in-house developed and third-party point of sale systems for order processing, and back-of-the house systems for accounting, labor and inventory management in our franchisees' restaurants. We utilize a variety of proprietary and commercially available systems to support our corporate operations. Sales and product mix information is transmitted to our restaurant support centers daily and this information supports our operations and marketing initiatives. We mitigate the potential impact from operational interruption of our information technology systems through a disaster recovery plan that is updated on a regular basis. We believe that technology is and will continue to be a key component of our long-term plans and are committed to providing system stability and targeted innovation. Our use of technology, particularly in terms of managing electronic payments and confidential information, also represents security and operational risks that we must manage and may result in additional costs incurred.

Protection of financial and personal information is a high priority for us, led by our Cybersecurity Department and a committee representing key functional areas. We continue to focus on enhancing our cybersecurity capabilities, educating our team members on cybersecurity importance, and managing our cyber risks. In addition, we participate in annual audits of our financial and human resources systems to verify that measures are in place to protect our employees' personal information. We accept credit cards, third party gift cards, and branded gift cards as payment in our restaurants. We submit our systems to regular audit and review, as required by the Payment Card Industry Data Security Standard (“PCI DSS”), including periodic scanning of our networks to check for vulnerability. To further secure customers' payment data, we worked with our franchisees to deploy and implement encryption and tokenization technologies, ensuring credit card data is not stored in our franchisees' and our restaurants' systems. This includes installation of equipment to improve authentication and to prevent fraud using EMV (Europay, Mastercard, Visa) technology. We and our franchisees are required and responsible for maintaining compliance with PCI DSS, and we regularly communicate and encourage our franchisees to maintain compliance and to manage risk. For further information regarding Information Technology, see Item 1A - Risk Factors, and for information regarding Cybersecurity, see Item 1C - Cybersecurity.

Seasonality

We may experience a slight increase in system-wide sales in the first quarter of our fiscal year due to redemptions of gift cards sold during the preceding December holiday season but we do not consider our operations to be seasonal to a material degree.

Government Regulation

We are subject to regulation by the Federal Trade Commission (“FTC”) and a number of foreign and state laws that regulate the offer and sale of franchises. We are also subject to a number of foreign and state laws that regulate substantive aspects of the franchisor-franchisee relationship. The FTC's Trade Regulation Rule on Franchising, as amended (the “FTC Rule”), requires us to furnish to prospective domestic franchisees a Franchise Disclosure Document containing information prescribed by the FTC Rule unless an exemption applies.

State laws that regulate the offer and sale of franchises and the franchisor-franchisee relationship presently exist in a number of states and some of these laws require registration of the franchise offering with state authorities. Those states that regulate the franchise relationship generally require that the franchisor deal with its franchisees in good faith, prohibit interference with the right of free association among franchisees, limit the imposition of unreasonable standards of performance on a franchisee and regulate discrimination against franchisees with respect to charges, royalty fees or other fees. Although such laws may restrict a franchisor in the termination and/or non-renewal of a franchise agreement. These provisions have not historically had a significant effect on our business.

Each restaurant is subject to licensing and regulation by a number of governmental authorities, which may include liquor license authorities (primarily in the case of Applebee's and Fuzzy's restaurants), health, sanitation, safety, fire, building and other agencies in the state or municipality in which the restaurant is located.

More stringent and varied requirements of local governmental bodies with respect to zoning, land use and environmental factors could delay or prevent the development of new restaurants in particular areas.

Various federal and state labor laws govern our relationship with employees and our franchisees' relationship with their own employees. These include such matters as minimum wage requirements, overtime, tip credits and other working requirements and conditions. Significant additional government-imposed increases in compensation and benefits could be detrimental to the economic viability of company-owned restaurants and our franchisees' restaurants.

We are subject to a number of privacy and data protection laws and regulations globally, including, without limitation, the EU General Data Protection Regulation, Section 5 of the FTC Act, California Consumer Privacy Act, as amended by the California Privacy Rights Act ("CCPA") and similar state laws. The legislative and regulatory landscape for privacy and data protection continues to evolve, and there has been increased attention in privacy and data protection issues. This has the

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potential to directly impact our business, especially due to new laws and regulations in the United States and internationally that require notifying individuals and government authorities about security breaches involving certain types of personal information, or expanding data privacy rights for individuals that may increase our legal risks and compliance requirements.

We are also subject to laws and regulations, which may vary from jurisdiction to jurisdiction, relating to nutritional content and menu labeling. In recent years, there has been an increased legislative, regulatory and consumer focus at the federal, state and municipal levels on the food industry including nutrition and advertising practices. Restaurants operating in the quick-service and fast-casual segments have been a particular focus. Initiatives in the area of nutrition disclosure or advertising, such as requirements to provide information about the nutritional content of our food, may result in increased costs of compliance with the requirements for us and our franchisees and may also change customer buying habits in a way that adversely impacts our sales. For further information regarding governmental regulation, see Item 1A - Risk Factors.

Environmental Matters

We are subject to federal and state environmental regulations, but historically these have not had a material effect on our operations. We are not aware of any federal, state or local environmental laws or regulations that are likely to materially impact our revenues, cash flow or competitive position, or result in any material capital expenditure. However, we cannot predict the effect of possible future environmental legislation or regulations.

Human Capital

We view our team members as one of the three core strategic pillars of our business, which are "People, Brand, and Growth." We believe that hiring, developing and retaining qualified team members is critical to our operations. We take a comprehensive approach to leadership, team members, franchisees and the community.

We believe the power to meaningfully impact the people and communities we serve is realized when each team member is personally and professionally fulfilled. One of our primary focuses is to ensure the health and well-being of our team members. Our Total Rewards Program plays a big part in our commitment to creating an environment of well-being. We have a consistent and fair compensation program that reflects our pay-for-performance philosophy and rewards our team members for their contributions to our success. We offer comprehensive health and protection benefits that support our team members and their families’ overall well-being. We also contribute to programs that provide our team members with financial security, now and in the future. We offer other rewards that focus on recognition, career building, health and wellness, time-off benefits, and other perks that are designed to make our peoples’ experience as Dine Brands team members productive and fun.

We assess our culture and listen to our workforce through periodic team member engagement surveys. Numerous policy changes have been made or been influenced by the feedback we receive from our team members. A recent example of such a change is our hybrid work schedule, which offers increased flexibility for our restaurant support center team members.

Approximately 92% of our company-owned restaurant employees are paid on an hourly basis, while certain restaurant and operations management and corporate positions are salaried. At our company-owned restaurants, we employ both full-time and part-time restaurant employees in order to provide the flexibility necessary during peak periods of restaurant operations and meet the individual needs of our employees. Our employees are not presently represented by any collective bargaining agreements and we have not experienced any significant work stoppages. We believe our relations with employees are good. Our franchisees, as independent business owners, are not our employees and their employees also are not our employees. Therefore, franchisees and their employees are not included in our employee count.

Corporate Information

We were incorporated under the laws of the State of Delaware in 1976 with the name IHOP Corp. Effective June 2, 2008, we changed our name to DineEquity, Inc. and on February 20, 2018, we changed our name to Dine Brands Global, Inc. Our principal executive offices are located at 10 West Walnut Street, 5th Floor, Pasadena, California 91103 and our telephone number is (818) 240-6055. Our Internet address is www.dinebrands.com. Our common stock is listed on the New York Stock Exchange (“NYSE”) and trades under the ticker symbol “DIN.”

Available Information

Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements and amendments to those reports filed with or furnished to the United States Securities and Exchange Commission (the “SEC”) pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, are available free of charge through our website as soon as reasonably practicable after electronically filing such materials with the SEC. The SEC maintains an Internet site that contains periodic reports, proxy and information statements and other information regarding our filings at www.sec.gov. The above references to our website and the SEC’s website do not constitute incorporation by reference of the information contained on those websites and should not be considered part of this document.