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Chain LeaderEditorial Archives2004 — October — Restauratour

People’s Choice
IHOP’s prototype combines customer-friendly elements from 10 test units.

Take a photographic tour of IHOP
Photography by Todd Winters

In May, the Glendale, Calif.-based operator of 1,167 family restaurants unveiled a new prototype in Crestwood, Ill. That itself is no big deal—IHOP rolls out a new design every five years and requires franchisees to remodel.

The Crestwood location, however, isn’t a lofty concept of some designer or construction executive. Rather, the prototype is the result of more than a year’s worth of testing in 10 IHOP markets around the country.

Customers wanted soft light, so IHOP complied with residential-looking fixtures made of tinted glass and wrought iron. Customers preferred ultra-comfortable seats; IHOP came back with booths backed with geometric fabric rather than vinyl. Customers liked the idea of IHOP’s history, so the chain replaced a generic “plant and picture” decor package with historic black-and-white photos and shadow boxes displaying IHOP memorabilia.

Outside, a bright blue façade with red trim, a faux-cobblestone entry, a white trellis above the door and a big “Welcome” sign got a stamp of approval, too.

IHOP tested its new prototype in 10 markets around the country for about a year.

The result? Franchisees like the design, which hasn’t always been the case with past remodels, says Patrick Lenow, director, public relations and communications for IHOP. In the past, changes were so subtle that “we didn’t get credit for the remodels,” Lenow says. “We’d make the blue vinyl a different blue.” Those slight changes translated into unhappy franchisees, who found themselves spending tens of thousands of dollars on changes that customers didn’t notice.

This time, franchisees approve. “It’s a better ambience for lunch and dinner,” says Victoria Janmohammed, who with her husband, Sal, owns the Crestwood location as well as 15 other IHOPs in the Midwest. Janmohammed spent $90,000 to remodel the restaurant, and she says customers have indeed noticed. “They look around, and they say, ‘You really did a lot,’” she says.

Testing Time
The process began in March 2003, when IHOP embarked on the next round of its regular remodeling schedule. Rather than simply launch a prototype, however, the chain decided to let customers in on the action. Lenow credits the decision to President and CEO Julia Stewart.

“We’ve done more research in the past three years than in the 40 years prior,” says Lenow. “It’s not rocket science—you just ask the guest.”

Louis & Partners, a Bath, Ohio-based design firm, designed a prototype, redesigning 10 IHOPs around the country. The test units represented three cost levels of the prototype and three building designs, according to Barbara Churchill, partner at Louis & Partners.

IHOP tested the prototype with customers three times: first in the blueprint stage, again in exit interviews prior to the remodels, and finally in exit interviews following the remodel. The company conducted a fourth check three to four weeks after the remodel to examine the design for function such as the durability of finishes, Churchill says.

Crestwood, Ill.
May 20, 2004
Louis & Partners, Bath, Ohio
5,000 square feet
Average Check
Unit Volume
$1.5 million
Expansion Plans
40 remodels and 40 to 55 new units this year; 150 to 160 remodels and 64 new units in 2005

Using customers’ comments from all three tests, the chain created a “best of” prototype, which is on exhibit at the Crestwood store. Some comments praised the softer lighting, fabric-backed booths and brand-relevant decor, Lenow says.

Other feedback came as a surprise. Churchill says that exterior stone work in the planning stages looked promising, but customers didn’t notice it. “I thought it would come off more strongly,” she says. By contrast, customers appreciated the prototype’s faux-cobblestone entry so much that IHOP made it a mandatory element of the design package.

Still other comments just didn’t work for financial or operational reasons. For instance, customers liked blue glass booth dividers, but managers complained that they interfered with sight lines. The company removed the blue dividers, but kept the partitions made of wood and wavy glass to shield the busing areas. Customers also liked an upscale entry tile, but it proved too expensive to fit the $80,000 to $82,000 target budget for each remodel.

Moving Right Along
Lenow could neither gauge the effect of the new prototype on sales or check averages nor offer an ROI. Still, the new look is rolling through the system, which is 98 percent franchised.

Forty remodels will be completed by the end of this year, and 150 to 160 are planned for next year. Franchisees will also open 40 stores with the new look this year and 60 in 2005. In addition, IHOP will open four corporate stores in Cincinnati, a new market for the company.

One of those locations will be a brand new prototype, featuring improved elements of the current redesign such as more durable, stain-resistant carpeting, according to Lenow.

The prototype’s exterior will include an architectural nod to the chain’s original A-frame building and will abandon the words “International House of Pancakes” in favor of the IHOP acronym. Inside, there’ll be new uniforms and new tableware.

The prototype will open in November and undergo six to eight months of testing. Lenow called the prototype one element in the company’s brand rejuvenation, which will also include a new menu and new marketing tactics. “It’s just one piece of the puzzle,” he says.

International Passport Breakfast: two eggs, two bacon strips, two pork-sausage links and choice of two same-style pancakes (Swedish, French, German, buttermilk), $5.99
Western Skillet: seasoned red-skin potatoes with green pepper, onions, mushroom and a blend of cheeses, topped with four strips of bacon or four pork-sausage links and two eggs any style, $6.99
Cheese Blintzes: three light, crepe-style pancakes filled with a combination of cheeses, served with dairy fresh sour cream and strawberries or warm fruit compote, $5.99
Signature Sampler: deep-fried shrimp, a golden-brown chicken strip and a juicy steak, $13.99

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