Co-locating restaurant brands is easy to talk about and hard to pull off. Most examples create more confusion than clarity. But every so often, two brands become stronger by partnering with each other. This is exactly what’s happening with IHOP and Applebee’s.
Dine Brands, the parent company of both IHOP and Applebee’s, is expanding its idea to co-locate their restaurants. After testing a shared location in Texas, the company plans to nearly triple its number of co-located sites by the end of this year from six to 15, with more coming in 2025 and 2026. The reason is operational synergy, but the enabler is complementary brands.
Different dayparts
IHOP is built for breakfast, while Applebee’s shines in the afternoon and evening. Together, they can operate in one location and capture every daypart without cannibalizing each other’s demand.
The idea behind sharing locations is to streamline real estate costs, reduce staffing duplication, and create consistency in back-of-house operations. According to Dine Brands’ CEO John Peyton, co-locating the brands supports growth and efficiency because “when you put the two together, you get a fully utilized kitchen and physical space.”
Brand complementarity makes it workable
Operational improvements might be the opportunity, but brand alignment is what makes it possible. BERA.ai data shows that the Applebee’s and IHOP brands are highly complementary. Co-locating the two brands is a winning formula, not a forced marriage, based on consumers’ perceptions of them.
For example, both brands are in the top 25% of all U.S. brands in overall brand equity scores. They rank high in Familiarity, Regard, and Meaningfulness. IHOP also stands out for Uniqueness, which is a rare quality in casual dining.
Same customer
Moreover, they both perform especially well among younger adults aged 18 to 49. And critically, they share a lot of the same customers. More than half of Applebee’s customers also visit IHOP, while more than 90% of them consider IHOP when making dining decisions.
Overall, these brands are reinforcing each other’s strengths and making the customer experience seamless and efficient.
Same values, different functions
The brand positioning overlaps too. Both IHOP and Applebee’s map consistently across four key dimensions:
- Purpose: Universal connection
- Emotional: Sincerity
- Functional: Variety and features
- Experiential: Care and consistency
That consistency matters. It ensures that co-located spaces feel cohesive instead of just two different restaurants pretending to be one. It also makes the shared operations feel natural to customers and staff alike.
When should brands partner?
This isn’t the first attempt at co-branding in the restaurant space, as Dunkin’ and Baskin-Robbins have shared locations for years. But that example highlights what happens when brand conflict trumps any potential for operational synergy.
Despite both brands being under the same parent company (Inspire Brands), the dual-store model often struggles with mismatched menus, separate supply chains, and limited customer overlap. A person looking for coffee and breakfast is rarely the same person who walks in craving ice cream at 2 p.m. That makes staffing and store layout more complex than efficient. This led to a shift in strategy where, in one example, future Baskin-Robbins locations in North Florida would not share space with Dunkin’.
Outside of the restaurant space, Best Buy and IKEA have partnered to make it easier for shoppers to purchase appliances and furnishings all in one place. According to Best Buy chief merchandising office Patrick McGinnis, “With this partnership, we get to combine technology and design and show shoppers what’s truly possible in their home like never before.” The pilot program rolls out in fall 2025, so time will tell if this is a good partnership.
However, there are questions you can answer to get an idea of when co-locating brands will work. When the following are true, the co-locating brands are more likely to see success:
- The brands serve different but complementary dayparts or categories.
- The customer base significantly overlaps.
- The brand positioning aligns enough to create a seamless experience.
- Shared operations really do reduce cost and complexity, not increase it.
- Applebee’s and IHOP check every one of those boxes.
A template for smart growth
The restaurant industry is navigating higher labor costs, tighter margins, and more selective customers. This makes operational efficiency more important than ever, but cutting costs alone doesn’t drive loyalty.
The Applebee’s and IHOP model shows what’s possible when operational strategy is backed by brand metrics and the insight they inspire. The success isn’t just about real estate and operational fit; it’s about brand fit—the brand you’re partnering with, how your audiences line up, and whether the brands amplify each other’s positive attributes rather than diluting them.
