Dine Brands Global, Inc.
For the period ended Jun 30, 2025. Filed Aug 6, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 6, 2025
DIN$35.85-0.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-07.
0001628280-25-022869
Item 2. —Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-06.
0000049754-25-000005
Item 2. —Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 123 previous paragraphs and 135 current paragraphs.
65 unchanged; 51 reworded; 17 added; 5 removed; 2 previous and 2 current paragraphs rearranged.
Tables are not compared: 24 previous and 23 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (17)
Current report
Total gross profit for the three months ended June 30, 2025 decreased compared with the same period of the prior year due to decreased revenue from franchise, company restaurant and rental operations. In addition, income before income taxes for the three months ended June 30, 2025 decreased compared with the prior year period primarily due to a decrease in gross profit, an increase in G&A expenses and a loss on extinguishment of debt in the current period. The increase in G&A expenses is primarily attributable to an increase in compensation-related expenses and an increase in professional service fees, both due in part to the G&A expenses related to company restaurant operations as well as dual brand and remodel initiatives. The loss on extinguishment of debt for the three months ended June 30, 2025 relates to the write-off of the unamortized debt issuance costs of the 2019 Class A-2-II Notes that were voluntarily fully repaid in June 2025.
Current report
Applebee’s system-wide domestic same-restaurant sales increased 4.9% for the three months ended June 30, 2025 and 1.3% for the six months ended June 30, 2025 as compared to the same periods of 2024. The increase in same-restaurant sales was primarily due to an increase in traffic and average check.
Current report
Comparison of the Three and Six Months Ended June 30, 2025 and 2024
Current report
Acquisition of Franchise Restaurants
Current report
Total gross profit for the three months ended June 30, 2025 decreased compared with the same period of the prior year, primarily due to decreased gross profit from franchise operations and decreased gross profit from company restaurant operations. The franchise operations gross profit decreased primarily due to lower Applebee's and IHOP franchise operations gross profit (see Franchise Operations section below for further details). The company restaurant operations gross profit decreased primarily due to the operation of the 59 Applebee's restaurants and ten IHOP restaurants acquired over the last eight months as mentioned above which the Company is investing in and working towards improving their operations.
Current report
Applebee's franchise fee revenue for the three months ended June 30, 2025 increased 6.2% as compared with the same period of the prior year, primarily due to an increase in termination fees and the favorable impact on royalties from a 5.0% increase in domestic franchise same-restaurant sales, partially offset by the decrease in the number of effective franchise restaurants due in part to our acquisition of 47 Applebee's restaurants in November 2024 and 12 Applebee's restaurants in May 2025.
Current report
Applebee's franchise fee revenue for the six months ended June 30, 2025 increased 0.3% as compared with the same period of the prior year, primarily due to an increase in termination fees and the favorable impact on royalties from a 1.5% increase in domestic franchise same-restaurant sales, partially offset by the decrease in the number of effective franchise restaurants due in part to our acquisition of 47 Applebee's restaurants and a decrease in accelerated franchise fee revenue recognition due to restaurant closures.
Current report
IHOP franchise fee revenue for the three months ended June 30, 2025 decreased 4.9% as compared with the same period of the prior year, primarily due to a decrease in proprietary product sales and the unfavorable impact on royalties of a 2.2% decrease in domestic franchise same-restaurant sales and a decrease in the number of effective franchise restaurants partially offset by an increase in termination fees.
Current report
IHOP franchise expense for the three months ended June 30, 2025 decreased $0.8 million as compared with the same period of the prior year, primarily due to a decrease in franchisor advertising contribution.
Current report
Fuzzy's franchise fee revenue for the six months ended June 30, 2025 decreased $1.3 million as compared with the same period of the prior year, primarily due to the unfavorable impact on royalties of a 12.0% decrease in franchise same-restaurant sales and a decrease in the number of effective franchise restaurants.
Current report
Fuzzy's franchise expenses for the three and six months ended June 30, 2025 decreased $1.5 million and $2.4 million, respectively, as compared with the same periods of the prior year primarily due to a decrease in franchisor advertising contribution and a decrease in bad debt expense.
Current report
G&A expenses, including costs related to company restaurant operations, for the six months ended June 30, 2025 increased 3.1% compared to the same period of the prior year, primarily due to an increase in professional service and legal fees and costs related to company restaurant operations as well as dual brand and remodel initiatives, partially offset by a decrease in stock-based compensation and a decrease in software maintenance costs.
Current report
The Company repaid the entire outstanding balance of approximately $594.0 million of its 2019 Class A-2-II Notes during the three months ended June 30, 2025 and recognized a $0.9 million loss on extinguishment of debt from the write-off of the related remaining issuance costs.
Current report
Closure and impairment charges for the three months ended June 30, 2025 increased $0.7 million compared to the same period of the prior year primarily attributable to revisions to existing closure reserves, including accretion, for IHOP restaurants closed prior to 2025.
Current report
Subsequent to the end of the second quarter of 2025, on July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was enacted. The OBBBA amends U.S. tax law, including provisions related to bonus depreciation, research and development expensing, and interest expense deduction, among other provisions. The Company is currently evaluating the impact of the OBBBA on its consolidated financial statements.
Current report
On May 14, 2025, the Board of Directors declared a second quarter 2025 cash dividend of $0.51 per share of common stock, paid on July 9, 2025 to the stockholders of record as of the close of business on June 20, 2025.
Current report
Financing activities used net cash of $33.3 million for the six months ended June 30, 2025 and 2024. The change in cash used by financing activities was primarily due to proceeds from issuance of long-term debt and decreases in common stock repurchases, compared to the same period of the prior year offset by the repayment of long-term debt and payment of debt issuance costs during the six months ended June 30, 2025.
Removed paragraphs (5)
Previous report
Applebee’s system-wide domestic same-restaurant sales decreased 2.2% for the three months ended March 31, 2025 as compared to the same period of 2024. The decrease in same-restaurant sales was primarily due to a decrease in traffic, partially offset by an increase in average check.
Previous report
Acquisition of Franchise Restaurants and Refranchising of Company-Operated Restaurants
Previous report
Applebee's franchise fee revenue for the three months ended March 31, 2025 decreased 5.6% as compared with the same period of the prior year, primarily due to fewer effective franchise restaurants, the number of which declined due to our acquisition of 47 Applebee's restaurants in November 2024 and restaurant closures, and a 2.1% decrease in domestic franchise same-restaurant sales.
Previous report
Fuzzy's franchise expenses for the three months ended March 31, 2025 decreased $1.1 million as compared with the same period of the prior year primarily due to a decrease in franchisor advertising contribution.
Previous report
Financing activities used net cash of $12.4 million for the three months ended March 31, 2025. The decrease in cash used by financing activities of $5.4 million was primarily due to a $4.4 million decrease in repurchase of common stock and a $0.6 million decrease in repurchase of surrendered shares.
Reworded paragraphs (51)
Previous wording
Through various subsidiaries, we own and franchise the Applebee's Neighborhood Grill & Bar® (“Applebee's”) concept in the American full-service segment within the casual dining category of the restaurant industry, the International House of Pancakes® (“IHOP”) concept in the mid-scale full-service restaurant segment within the family dining category of the restaurant industry, and the Fuzzy's Taco Shop®(“Fuzzy's”) concept in the Mexican limited-service restaurant segment within the fast-casual dining category of the restaurant industry. References herein to Applebee's®, IHOP® and Fuzzy's Taco Shop® restaurants are to these three restaurant concepts, whether operated by franchisees, area licensees and their sub-licensees (collectively, “area licensees”) or by us. With over 3,500 restaurants, we believe we are one of the largest full-service restaurant companies in the world.
Current wording
Through various subsidiaries, we own and franchise the Applebee's Neighborhood Grill & Bar® (“Applebee's”) concept in the American full-service segment within the casual dining category of the restaurant industry, the International House of Pancakes® (“IHOP”) concept in the mid-scale full-service restaurant segment within the family dining category of the restaurant industry, and the Fuzzy's Taco Shop®(“Fuzzy's”) concept in the Mexican limited-service restaurant segment within the fast-casual dining category of the restaurant industry. References herein to Applebee's®, IHOP® and Fuzzy's Taco Shop® restaurants are to these three restaurant concepts, whether operated by franchisees, area licensees and their sub-licensees (collectively, “area licensees”) or by us. With close to 3,500 restaurants, we are one of the largest full-service restaurant companies in the world.
Previous wording
We identify our business segments based on the organizational units used by management to monitor performance and make operating decisions. We currently have six operating segments: Applebee's franchise operations, IHOP franchise operations, Fuzzy's franchise operations, rental operations, financing operations, and company-operated restaurant operations. We have four reportable segments: franchise operations (an aggregation of each restaurant concept's franchise operations), rental operations, financing operations, and company-operated restaurant operations.
Current wording
We identify our business segments based on the organizational units used by management to monitor performance and make operating decisions. We currently have six operating segments: Applebee's franchise operations, IHOP franchise operations, Fuzzy's franchise operations, rental operations, financing operations, and company-owned restaurant operations. We have four reportable segments: franchise operations (an aggregation of each restaurant concept's franchise operations), rental operations, financing operations, and company-owned restaurant operations.
Previous wording
The effective tax rate for the three months ended March 31, 2025 was higher than the rate of the prior comparable period primarily due to a lower tax deduction related to stock-based compensation, resulting from the changes in our stock price.
Current wording
The effective tax rate for the three and six months ended June 30, 2025 was higher than the rate of the comparable prior periods primarily due to a lower tax deduction related to stock-based compensation, resulting from the changes in our stock price.
Previous wording
The following table highlights the primary components of the decrease in our income before income taxes for the three months ended March 31, 2025, compared to our income before income taxes for the comparable prior period (in millions):
Current wording
The following table highlights the primary components of the decrease in our income before income taxes for the three and six months ended June 30, 2025, compared to our income before income taxes for the comparable prior periods (in millions):
Previous wording
Income before income taxes for the three months ended March 31, 2025 decreased compared to the prior year period primarily due to a decrease in gross profit and an increase in closure and impairment charges, partially offset by a decrease in G&A expenses. Total gross profit for the three months ended March 31, 2025 decreased compared with the same period of the prior year due to decreased revenue from franchise and rental operations. The increase in closure and impairment charges was primarily attributable to the strategic realignment of the IHOP Cincinnati market resulting in the acquisition and closure of certain IHOP restaurants in March 2025. The decrease in G&A expenses is primarily attributable to a decrease in compensation-related expenses, partially offset by an increase in legal and professional services.
Current wording
Total gross profit for the six months ended June 30, 2025 decreased compared with the same period of the prior year due to decreased revenue from franchise, rental and company restaurant operations. In addition, income before income taxes for the six months ended June 30, 2025 decreased compared with the prior year period due to a decrease in gross profit, an increase in closure and impairment charges and an increase in G&A expenses. The increase in closure and impairment charges was primarily attributable to the strategic realignment of the IHOP Cincinnati market resulting in the acquisition and closure of certain IHOP restaurants in March 2025. The increase in G&A expenses is primarily due to an increase in professional service and legal fees and costs related to company restaurant operations as well as dual brand and remodel initiatives, partially offset by a decrease in stock-based compensation and a decrease in software maintenance costs.
Previous wording
Increases in commodity, labor and other restaurant operating costs experienced at restaurants owned and operated by our franchisees could impact us to the extent our franchisees are adversely impacted by a sustained decline in their operating margins. At company operated restaurants, when applicable, increases in commodity, labor and other restaurant operating costs impact us directly.
Current wording
Increases in commodity, labor and other restaurant operating costs experienced at restaurants owned and operated by our franchisees could impact us to the extent our franchisees are adversely impacted by a sustained decline in their operating margins. At company-owned restaurants, when applicable, increases in commodity, labor and other restaurant operating costs impact us directly.
Previous wording
See“Consolidated Results of Operations - Comparison of the Three Months Ended March 31, 2025 and 2024” for additional discussion of the changes shown above.
Current wording
See“Consolidated Results of Operations - Comparison of the Three and Six Months Ended June 30, 2025 and 2024” for additional discussion of the changes shown above.
Previous wording
Our key performance indicators for the three months ended March 31, 2025 were as follows:
Current wording
Our key performance indicators for the three and six months ended June 30, 2025 were as follows:
Previous wording
(1) Franchise and area license restaurant closings, net of openings, during the three months ended March 31, 2025.
Current wording
(1) Franchise and area license restaurant closings, net of openings, during the three and six months ended June 30, 2025.
Previous wording
(2) Change in the weighted average number of franchise, area license and company-operated restaurants open during the three months ended March 31, 2025, compared to the weighted average number of those open during the same period of 2024.
Current wording
(2) Change in the weighted average number of franchise, area license and company-owned restaurants open during the three and six months ended June 30, 2025, compared to the weighted average number of those open during the same periods of 2024.
Previous wording
Based on data from Black Box Intelligence, a restaurant sales reporting firm (“Black Box”), Applebee's same-restaurant sales for the three months ended March 31, 2025 underperformed the casual dining segment of the restaurant industry (excluding Applebee's) during the same period.
Current wording
Based on data from Black Box Intelligence, a restaurant sales reporting firm (“Black Box”), Applebee's increase in same-restaurant sales for the three months ended June 30, 2025 outperformed, and for the six months ended June 30, 2025 underperformed the casual dining segment of the restaurant industry (excluding Applebee's) as compared with the same respective periods of 2024.
Previous wording
IHOP's system-wide domestic same-restaurant sales decreased 2.7% for the three months ended March 31, 2025 as compared to the same period of 2024. The decrease in same-restaurant sales was primarily due to a decrease in traffic and a decrease in average check.
Current wording
IHOP's system-wide domestic same-restaurant sales decreased 2.3% for the three months ended June 30, 2025 as compared to the same period of 2024, primarily due to a decrease in average check. IHOP's system-wide domestic same-restaurant sales decreased 2.5% for the six months ended June 30, 2025 as compared to the same period of 2024, primarily due to a decrease in average check and a decrease in traffic.
Previous wording
Based on data from Black Box, IHOP's same-restaurant sales for the three months ended March 31, 2025 underperformed the family dining segment of the restaurant industry (excluding IHOP) during the same period.
Current wording
Based on data from Black Box, IHOP's same-restaurant sales for the three and six months ended June 30, 2025 underperformed the family dining segment of the restaurant industry (excluding IHOP) as compared with the same respective periods of 2024.
Previous wording
Fuzzy's system-wide domestic same-restaurant sales decreased 12.2% for the three months ended March 31, 2025 as compared to the same period of 2024. The decrease in same-restaurant sales was primarily due to a decrease in traffic and a decrease in average check.
Current wording
Fuzzy's system-wide domestic same-restaurant sales decreased 11.8% for the three months ended June 30, 2025 and 12.0% for the six months ended June 30, 2025 as compared to the same respective periods of 2024. The decrease in same-restaurant sales was primarily due to a decrease in traffic and a decrease in average check.
Previous wording
The following table sets forth the number of “Effective Restaurants” in the Applebee’s, IHOP and Fuzzy's systems and information regarding the percentage change in sales at those restaurants compared to the same period of the prior year. Sales at restaurants that are owned by franchisees and area licensees are not attributable to the Company and, as such, the percentage change in sales at Effective Restaurants is based on non-GAAP sales data. However, we believe that presentation of this information is useful in analyzing our revenues because franchisees and area licensees pay us royalties and advertising fees that are based on a percentage of their sales, and, where applicable, rental payments under leases that partially may be based on a percentage of their sales. Management also uses this information to make decisions about plans for future development of additional restaurants as well as evaluation of current operations.
Current wording
The following table sets forth the number of “Effective Restaurants” in the Applebee’s, IHOP and Fuzzy's systems and information regarding the percentage change in sales at those restaurants compared to the same period of the prior year. Sales at restaurants that are owned by franchisees and area licensees are not attributable to the Company and, as such, the percentage change in sales at Effective Restaurants is based on non-GAAP sales data. However, we believe that presentation of this information is useful in analyzing our revenues because franchisees and area licensees pay us royalties and advertising fees that are based on a percentage of their sales, and, where applicable, rental payments under leases that are based on a percentage of their sales. Management also uses this information to make decisions about plans for future development of additional restaurants as well as evaluation of current operations.
Previous wording
(b) “System-wide sales” are retail sales at Applebee’s and Fuzzy's restaurants operated by franchisees and IHOP restaurants operated by franchisees and area licensees, as reported to the Company, in addition to retail sales at company-operated Applebee's, IHOP and Fuzzy's restaurants. System-wide sales do not include retail sales of ghost kitchens. Sales at restaurants that are owned by franchisees and area licensees are not attributable to the Company. An increase in franchisees' reported sales will result in a corresponding increase in our royalty revenue, while a decrease in franchisees' reported sales will result in a corresponding decrease in our royalty revenue. Unaudited reported sales for Applebee's and Fuzzy's franchise restaurants, IHOP franchise restaurants, IHOP area license restaurants, and Applebee's, IHOP and Fuzzy's company-operated restaurants were as follows:
Current wording
(b) “System-wide sales” are retail sales at Applebee’s and Fuzzy's restaurants operated by franchisees and IHOP restaurants operated by franchisees and area licensees, as reported to the Company, in addition to retail sales at company-owned Applebee's, IHOP and Fuzzy's restaurants. System-wide sales do not include retail sales of ghost kitchens. Sales at restaurants that are owned by franchisees and area licensees are not attributable to the Company. An increase in franchisees' reported sales will result in a corresponding increase in our royalty revenue, while a decrease in franchisees' reported sales will result in a corresponding decrease in our royalty revenue. Unaudited reported sales for Applebee's, IHOP and Fuzzy's franchise restaurants, IHOP area license restaurants, and Applebee's, IHOP and Fuzzy's company-owned restaurants were as follows:
Previous wording
(e) The franchise sales percentage change for 2025 was impacted by the acquisition of 47 Applebee's restaurants in November 2024 and 10 IHOP restaurants in March 2025 now reported as company-operated.
Current wording
(e) The franchise sales percentage change for 2025 was impacted by the acquisition of 47 Applebee's restaurants in November 2024, 10 IHOP restaurants in March 2025, and 12 Applebee's restaurants in May 2025 now reported as company-owned.
Previous wording
The restaurant counts and activity presented above include 19 dual-branded international and one dual-branded domestic Applebee's and IHOP restaurants at March 31, 2025, and eight dual-branded international Applebee's and IHOP restaurants at March 31, 2024, which are separately counted in each of our brands' restaurant counts and activity. Dual-branded restaurants are defined as restaurants that reside in one location and operate two of our restaurant concepts under two separate franchise agreements.
Current wording
The restaurant counts and activity presented above include 20 dual-branded international and one dual-branded domestic Applebee's and IHOP restaurants at June 30, 2025, and 10 dual-branded international Applebee's and IHOP restaurants at June 30, 2024, which are separately counted in each of our brands' restaurant counts and activity. Dual-branded restaurants are defined as restaurants that reside in one location and operate two of our restaurant concepts under two separate franchise agreements.
Previous wording
During the three months ended March 31, 2025, we operated 47 Applebee's restaurants across Georgia, Texas, Arkansas, Illinois, Kentucky, Tennessee, Mississippi and Missouri acquired in November 2024 and 10 IHOP restaurants in Ohio and Kentucky acquired in March 2025. During the three months ended March 31, 2024, we did not operate any Applebee's and IHOP restaurants.
Current wording
During the three and six months ended June 30, 2025, we operated 47 Applebee's restaurants across Georgia, Texas, Arkansas, Illinois, Kentucky, Tennessee, Mississippi and Missouri acquired in November 2024 and 10 IHOP restaurants in Ohio and Kentucky acquired in March 2025. During the three months ended June 30, 2025 we also operated 12 Applebee's restaurants across Kentucky, Indiana, Arkansas, and Oklahoma acquired in May 2025. During the three and six months ended June 30, 2024, we did not operate any Applebee's and IHOP restaurants.
Previous wording
March 2025, partially offset by the decrease in franchise and rental operations revenue. The decrease in franchise operations revenue was primarily attributable to the decrease in domestic same-restaurant sales, the decrease in the number of effective restaurants and the decrease in proprietary product sales at IHOP. Rental operations revenue for the three months ended March 31, 2025 decreased compared with the same period of the prior year, primarily due to lease terminations and a decrease in percentage rent due to lower system sales.
Current wording
Total revenue for the three and six months ended June 30, 2025 increased compared with the same periods of the prior year, primarily due to the operation of 47 Applebee's restaurants acquired in November 2024 and ten IHOP restaurants acquired in March 2025 (and to a lesser extent for the six-month period, 12 Applebee's restaurants acquired in May 2025), partially offset by the decreases in franchise and rental operations revenue. The decrease in franchise operations revenue was primarily attributable to the decreases in IHOP and Fuzzy's domestic same-restaurant sales, the decrease in the number of effective franchise restaurants and the decrease in proprietary product sales partially offset by an increase in Applebee's domestic same-restaurant sales. Rental operations revenue for the three months ended June 30, 2025 decreased compared with the same period of the prior year, primarily due to lease terminations. Rental operations revenue for the six months ended June 30, 2025 decreased compared with the same period of the prior year, primarily due to lease terminations and a decrease in percentage rent due to lower system sales.
Previous wording
Total gross profit for the three months ended March 31, 2025 decreased compared with the same period of the prior year, primarily due to the decrease in franchise and rental operations revenue. The franchise operations gross profit decreased primarily due to Applebee's and IHOP decreased franchise operations gross profit. The decrease in rental operations gross profit for the three months ended March 31, 2025 was primarily due to decreased rental revenue as described above.
Current wording
Total gross profit for the six months ended June 30, 2025 decreased compared with the same period of the prior year, primarily due to decreased gross profit from franchise operations as well as decreased gross profit from rental and company restaurant operations. The franchise operations gross profit decreased primarily due to lower Applebee's and IHOP franchise operations gross profit (see Franchise Operations section below for further details). The decrease in rental operations gross profit for the six months ended June 30, 2025 was primarily due to decreased rental revenue as described above. The company restaurant operations gross profit decreased primarily due to the operation of the 59 Applebee's restaurants and ten IHOP restaurants acquired over the last eight months as mentioned above.
Previous wording
Applebee's franchise expenses for the three months ended March 31, 2025 increased $1.2 million compared with the same period of the prior year primarily due to an increase in bad debt expense and an increase in IT franchisee support costs.
Current wording
Applebee's franchise expenses for the three and six months ended June 30, 2025 increased $4.8 million and $6.0 million, respectively, compared with the same period of the prior year primarily due to an increase in bad debt expense mainly resulting from a recovery of bad debt expense in the same period of the prior year as well as an increase in refranchising costs.
Previous wording
IHOP's franchise fee revenue for the three months ended March 31, 2025 decreased 3.4%, as compared with the same period of the prior year, primarily due to a 2.6% decrease in domestic franchise same-restaurant sales and a decrease in the number of effective franchise restaurants as well as a decrease in proprietary product sales.
Current wording
IHOP franchise fee revenue for the six months ended June 30, 2025 decreased 4.2%, as compared with the same period of the prior year, primarily due to a 2.4% decrease in domestic franchise same-restaurant sales and a decrease in the number of effective franchise restaurants as well as a decrease in proprietary product sales.
Previous wording
IHOP's franchise expenses for the three months ended March 31, 2025 decreased $0.6 million as compared with the same period of the prior year, primarily due to a decrease in franchisor advertising contribution and a decrease in the cost of proprietary product sales, partially offset by an increase in bad debt expense.
Current wording
IHOP franchise expenses for the six months ended June 30, 2025 decreased $1.5 million as compared with the same period of the prior year, primarily due to a decrease in franchisor advertising contribution and a decrease in the cost of proprietary product sales, partially offset by an increase in bad debt expense and an increase in franchisee IT support costs.
Previous wording
Fuzzy's franchise fee revenue for the three months ended March 31, 2025 decreased $0.6 million as compared with the same period of the prior year, primarily due to the unfavorable impact on royalties of a 12.2% decrease in franchise same-restaurant sales and a decrease in the number of effective franchise restaurants.
Current wording
Fuzzy's franchise fee revenue for the three months ended June 30, 2025 decreased $0.7 million as compared with the same period of the prior year, primarily due to the unfavorable impact on royalties of a 11.8% decrease in franchise same-restaurant sales and a decrease in the number of effective franchise restaurants.
Previous wording
Applebee's advertising revenues and expenses for the three months ended March 31, 2025 decreased $3.5 million compared to the same period of the prior year primarily due to fewer effective franchise restaurants, the number of which declined due to our acquisition of 47 Applebee's restaurants in November 2024 (whose contributions to the national advertising fund are reflected as company restaurant expenses instead of advertising revenues) and restaurant closures, and a 2.1% decrease in domestic franchise same-restaurant sales. IHOP advertising revenues and expenses for the three months ended March 31, 2025 decreased 3.9% compared to the same period of the prior year, primarily due to a 2.6% decrease in domestic franchise same-restaurant sales and a decrease in the number of effective franchise restaurants.
Current wording
Advertising revenues and expenses for the three and six months ended June 30, 2025 decreased compared to the same periods of the prior year primarily due to fewer effective franchise restaurants due in part to our acquisition of company restaurants (whose contributions to the respective brand's national advertising fund are reflected as company restaurant expenses instead of advertising revenue) and the decreases in IHOP and Fuzzy's domestic franchise same-restaurant sales, partially offset by the increase in Applebee's domestic franchise same-restaurant sales.
Previous wording
Rental operations gross profit for the three months ended March 31, 2025 decreased as compared to the same period of the prior year, primarily due to lease terminations and a decrease in percentage rent due to lower system sales.
Current wording
Rental operations gross profit for the six months ended June 30, 2025 decreased as compared to the same period of the prior year, primarily due to lease terminations and a decrease in percentage rent due to lower system sales.
Previous wording
As discussed under "Events Impacting Comparability of Financial Information," company restaurant operations for the three months ended March 31, 2025 included 47 Applebee's restaurants acquired in November 2024, 10 IHOP restaurants acquired in March 2025, and one Fuzzy's restaurant. Company restaurant operations for the three months ended March 31, 2024 included one Fuzzy's restaurant. Company segment restaurant expenses may include costs associated with acquired restaurants in the process of being refranchised. There were no acquired restaurants expenses during the three months ended March 31, 2024.
Current wording
As discussed under "Events Impacting Comparability of Financial Information," company restaurant operations for the six months ended June 30, 2025 included 47 Applebee's restaurants acquired in November 2024, 10 IHOP restaurants acquired in March 2025, 12 Applebee's restaurants acquired in May 2025, and one Fuzzy's restaurant. Company restaurant operations for the six months ended June 30, 2024 included one Fuzzy's restaurant. Company segment restaurant expenses may include costs associated with acquired restaurants in the process of being refranchised. There were no acquired restaurants expenses during the six months ended June 30, 2024.
Previous wording
Financing revenues primarily consist of interest income from the financing of IHOP equipment leases and franchise fees as well as interest income on notes receivable due from franchisees. Financing expenses are sales and use taxes related to IHOP equipment leases. Financing revenue and gross profit for the three months ended March 31, 2025 declined compared to the same period of the prior year, primarily due to progressive decline in interest income as note balances are repaid.
Current wording
Financing revenues primarily consist of interest income from the financing of IHOP equipment leases and franchise fees as well as interest income on notes receivable due from franchisees. Financing expenses are sales and use taxes related to IHOP equipment leases. Financing revenue and gross profit for the three and six months ended June 30, 2025 declined compared to the same period of the prior year, primarily due to progressive decline in interest income as note balances are repaid.
Previous wording
G&A expenses for the three months ended March 31, 2025 decreased 1.6% compared to the same period of the prior year, primarily due to a decrease in compensation-related expenses, partially offset by an increase in legal and professional services.
Current wording
G&A expenses for the three months ended June 30, 2025 increased 8.3% compared to the same period of the prior year, primarily due to an increase in compensation-related expenses and an increase in professional service fees, both due in part to the G&A expenses related to company restaurant operations as well as dual brand and remodel initiatives.
Previous wording
Interest expense, net for the three months ended March 31, 2025 was slightly lower than the same period of the prior year, primarily due to the decrease in interest rates on our Credit Facility as well as an increase in interest income from improved yields.
Current wording
Interest expense, net for the three months ended June 30, 2025 was slightly lower than the same period of the prior year, primarily due to a decrease in interest rates on our Credit Facility offset by a decrease in interest income from lower yields.
Previous wording
Closure and impairment charges for the three months ended March 31, 2025 increased $5.2 million compared to the same period of the prior year. The increase in closure and impairment charges was primarily attributable to the strategic realignment of the IHOP Cincinnati market resulting in the acquisition and closure of certain IHOP restaurants in March 2025.
Current wording
Closure and impairment charges for the six months ended June 30, 2025 increased $5.9 million compared to the same period of the prior year primarily attributable to the strategic realignment of the IHOP Cincinnati market resulting in the acquisition and closure of certain IHOP restaurants in March 2025 and revisions to existing closure reserves including accretion.
Previous wording
Our income tax provision or benefit will vary from period to period in our normal course of business for two reasons: a change in income before income taxes and a change in the effective tax rate. Changes in our income before income taxes were addressed in the preceding sections of“Consolidated Results of Operations - Comparison of the Three Months Ended March 31, 2025 and 2024."
Current wording
Our income tax provision or benefit will vary from period to period in our normal course of business for two reasons: a change in income before income taxes and a change in the effective tax rate. Changes in our income before income taxes were addressed in the preceding sections of“Consolidated Results of Operations - Comparison of the Three and Six Months Ended June 30, 2025 and 2024."
Previous wording
Our effective tax rate for the three months ended March 31, 2025 was higher than the rate of the prior comparable period primarily due to a lower tax deduction related to stock-based compensation, resulting from the changes in our stock price.
Current wording
Our effective tax rate for the three and six months ended June 30, 2025 was higher than the rate of the prior comparable periods primarily due to a lower tax deduction related to stock-based compensation, resulting from the changes in our stock price.
Previous wording
Key provisions of our long-term debt potentially impacting liquidity are summarized below. See Note 7 — Long-Term Debt, of the Notes to the Consolidated Financial Statements, for additional detail on long-term debt, including the balances outstanding at March 31, 2025 and 2024.
Current wording
Key provisions of our long-term debt potentially impacting liquidity are summarized below. See Note 7 — Long-Term Debt, of the Notes to Consolidated Financial Statements, for additional detail on long-term debt, including the balances outstanding at June 30, 2025 and 2024.
Previous wording
Our long-term debt includes two series of fixed rate senior secured notes, the Series 2019-1 4.723% Fixed Rate Senior Secured Notes in an initial aggregate principal amount of $600 million (the “2019 Class A-2-II Notes”) and the Series 2023-1 7.824% Fixed Rate Senior Secured Notes, Class A-2 in an initial aggregate principal amount of $500 million (the “2023 Class A-2 Notes” and, together with the 2019 Class A-2-II Notes, the “Class A-2 Notes”).
Current wording
Our long-term debt includes two series of fixed rate senior secured notes, the Series 2023-1 7.824% Fixed Rate Senior Secured Notes, Class A-2 in an initial aggregate principal amount of $500 million (the “2023 Class A-2 Notes”) and the Series 2025-1 6.720% Fixed Rate Senior Secured Notes, Class A-2 in an initial aggregate principal amount of $600 million (the "2025 Class A-2 Notes" and, together with the 2023 Class A-2 Notes, the "Class A-2 Notes").
Previous wording
The final maturity of the 2019 Class A-2-II Notes is in June 2049, but it is anticipated that, unless repaid earlier, the 2019 Class A-2-II Notes will be repaid in June 2026.
Current wording
The final maturity of the 2025 Class A-2 Notes is in June 2055, but it is anticipated that, unless repaid earlier, the 2025 Class A-2 Notes will be repaid in June 2030.
Previous wording
While the Class A-2 Notes are outstanding, payment of principal and interest is required to be made on the Class A-2 Notes on a quarterly basis. The payment of principal on the Class A-2 Notes may be suspended when the leverage ratio for the Company and its subsidiaries is less than or equal to 5.25x. As of March 31, 2025, our leverage ratio was approximately 4.15x. Therefore, quarterly principal payments are not required.
Current wording
While the Class A-2 Notes are outstanding, payment of principal and interest is required to be made on the Class A-2 Notes on a quarterly basis. The payment of principal on the Class A-2 Notes may be suspended when the leverage ratio for the Company and its subsidiaries is less than or equal to 5.25x. As of June 30, 2025, our leverage ratio was approximately 4.25x. Therefore, quarterly principal payments are not required.
Previous wording
We may voluntarily repay the Class A-2 Notes at any time; however, if repaid prior to certain dates we would be required to pay make-whole premiums. As of March 31, 2025, there was no make-whole premium associated with voluntary prepayment of the 2019 Class A-2-II Notes. As of March 31, 2025, the make-whole premium associated with voluntary prepayment of the 2023 Class A-2 Notes was approximately $27.2 million. We also would be subject to a make-whole premium in the event of a mandatory prepayment required following certain rapid amortization events or certain asset dispositions. The mandatory make-whole premium requirements are considered derivatives embedded that must be bifurcated for separate valuation. We estimated the fair value of these derivatives to be immaterial as of March 31, 2025, based on the probability-weighted discounted cash flows associated with either event.
Current wording
We may voluntarily repay the Class A-2 Notes at any time; however, if repaid prior to certain dates we would be required to pay make-whole premiums. As of June 30, 2025, the make-whole premium associated with voluntary prepayment of the 2023 Class A-2 Notes was approximately $23.9 million. As of June 30, 2025, the make-whole premium associated with the voluntary prepayment of the 2025 Class A-2 Notes was approximately $42.4 million. We also would be subject to a make-whole premium in the event of a mandatory prepayment required following certain rapid amortization events or certain asset dispositions. The mandatory make-whole premium requirements are considered derivatives embedded that must be bifurcated for separate valuation. We estimated the fair value of these derivatives to be immaterial as of June 30, 2025, based on the probability-weighted discounted cash flows associated with either event.
Previous wording
•DSCR less than 1.75x - Cash Flow Sweeping Event
Current wording
•DSCR less than 1.75x - Cash Trapping Event
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Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Rental operations gross profit for the three months ended June 30, 2025 decreased as compared to the same period of the prior year, primarily due to operating lease terminations.
Current report — wording carried from elsewhere
Interest expense, net for the six months ended June 30, 2025 decreased compared to the same period of the prior year, primarily due to a decrease in interest rates on our Credit Facility.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Comparison of the Three Months Ended March 31, 2025 and 2024
Previous report — wording carried elsewhere
Total revenue for the three months ended March 31, 2025 increased compared with the same period of the prior year, primarily due to the operation of 47 Applebee's restaurants acquired in November 2024 and 10 IHOP restaurants acquired in