New York (CNN) — Want a stack of IHOP pancakes with a side of Applebee’s riblets? This will soon become a reality in Texas with a new restaurant bringing the two chains together under one roof.

Dine Brands, owner of both restaurants, announced that the combined Applebee’s-IHOP restaurant will open about 35 miles west of San Antonio early next year, marking the first time the company has introduced the concept in the United States.

Plans for the dual-brand restaurant were announced earlier this year as part of Dine Brand’s plan to expand the two restaurants, both of which reported lackluster profits Wednesday. Applebee’s same-store sales fell nearly 6% in the third quarter, while IHOP’s same-store sales fell 2.1%.

Newly released renderings show two distinct portions, with a traditional IHOP interior on one side and an Applebee’s, including a large bar with televisions, on the other. Menus from both chains are available on either side and the restaurants share a kitchen.

The idea is to maximize revenue with the same footprint as a traditional restaurant. Indeed, both restaurants’ menus encompass all parts of the day (pancakes and eggs Benedict for breakfast and steak and wings for dinner) and will have staff trained to work with both.

“The idea behind the IHOP-Applebee’s dual brand is pretty simple: make better use of a store by combining brands that traditionally serve different time slots,” RJ Hottovy, head of analytics research at Placer.ai, told CNN. “By operating both brands in one store and utilizing a shared kitchen, the company seeks to drive footfall throughout the day and reduce the costs of operating two separate restaurants.”

So far, 13 of the dual-branded restaurants are open, including in Canada, Latin America and the Middle East. The company is “seeing a lot of success” with them and expects them to “fuel our growth rate next year as well,” according to Dine Brands CEO John Peyton during an earnings call this week.

Hybrid restaurants currently generate 1.5 to 2 times the revenue of a traditional outlet. However, Peyton admitted that this combination is not necessarily intended to attract consumers, but to be a financially sustainable concept for franchisees who see their customers reducing their spending.

“Having two iconic brands in our portfolio that complement each other is a competitive advantage, and we plan to leverage this to improve the economic situation and drive growth throughout our system,” Peyton said.

The concept’s challenge is “managing the complexity of different menus, but the company has some experience in this area in its dual-branded international locations,” Hottovy noted.

Other businesses are turning to the idea of ​​communal dining. Many of the combo fast-food restaurants customers see are owned by GoTo Foods, which often jointly builds Auntie Anne’s and Cinnabon, and Inspire Brands, which owns a few Jimmy John’s-Dunkin combo outlets.

The-CNN-Wire
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