Business Franchises - INACTIVE

By Bethany Ramos

IHOP corporate realized a few years ago that with more than 1,500 locations across the country, 99% of which are franchised, it can get pretty tricky presenting a unified marketing message. One unit down South, for instance, may have something very different to say in a local coupon promotion than an IHOP television campaign might convey nationwide.

The Glendale, Calif.-based family-dining chain wanted to make its overall brand image consistent, yet still allow franchisees to meet their customers' unique pricing needs and regional preferences. After all, country-fried steak in one area of the United States is chicken-fried steak in another. In 2003 the company began using a print-management system that helped units create customized marketing materials and menus online.

IHOP uses a print-management system that allows franchisees to visit a secure Web site and peruse a catalog of materials that they can customize for their stores.

"The system is helping franchisees drive down printing and distribution costs, but this is also about that fact that we are sending the right message to guests and representing the IHOP brand appropriately," said Patrick Lenow, director of public relations and communications, after the introduction. "We have 1550 restaurants acting like a chain, not a bunch of units with some disjointed effort."

IHOP Expansion Calls for Franchise Unity

Laying the groundwork to get all franchisees on the same (menu) page was critical to support a unified front with major franchise changes on the horizon. Franchise owners and prospects now have even more options after a fast casual concept was introduced to the chain in 2011.

IHOP Express locations have opened to make the brand more accessible to new and current customers for breakfast, lunch, and dinner. The fast casual concept was initially tested on military bases and university campuses and has since proven to be an "exciting new option for guests on the go who want the IHOP experience," according to President Jean Birch.

IHOP Express was named a franchise to watch in 2012 by Franchise Chatter. Franchise owners can embrace a new, fun restaurant concept with amenities like an open grill and interactive syrup bar, while integrating the same marketing and menu support utilized in traditional franchise locations.

Tools of the Trade

IHOP's printing and marketing support system, called eTools, allows franchisees to visit a secure website and peruse a catalog of materials such as coupons, door hangers, and even newspaper ads that they can customize for their stores. It even has templates to help franchisees create marketing materials to address unique situations such as road construction by a unit or new competitors in the area.

IHOP franchisees can also order national point-of-purchase materials online.

Franchisees use the system to order menus online twice a year. Lenow explains that menus are IHOP's primary marketing tool, so it is important to keep them fresh with limited-time offers and items labeled as "new." The franchisee can go into the system to add or delete menu items or adjust pricing. The core items are there, but there are specific variations from which to choose. Regional offices then go into the site and review the franchisees' choices to make sure the overall market strategy is on target.

Orders for menus and other marketing materials go to the vendor, where they are printed and distributed. Franchisees can still use local printers if they have an urgent need for the materials. eTools is designed to be an all-inclusive system that offers user-friendly printing of direct mail, signage, outdoor advertising, consulting, stationery, photography, and logo materials, in addition to its primary function of menu printing.

Prior to automated menu printing, franchisees were printing menus on demand, depending on their needs. "We were not doing a good job taking advantage of efficiencies of scale," Lenow says. "With this paperless system, there is no more faxing or overnighting of proofs back and forth."

Lenow won't put a dollar amount on IHOP's overall savings but does say that the average franchisee has seen 15 percent to 20 percent savings on menu printing alone. "Considering the quantities they print twice yearly, that is significant," he says.

"Other savings, though, include getting our franchisee back out with the guests instead of poring over proofs, and having materials out there that we are proud of as a corporation," Lenow adds.

IHOP's tool solves some of the cost and logistics problems of customization while still allowing corporate to maintain control of quality. Fortunately, all this technology is not intimidating. IHOP has 100 percent system participation.