IHOP Tries a New Twist for Some Locations: Alcoholic Beverages
For the first time, IHOP franchise owners, who manage the majority of IHOP restaurants, now have the option to incorporate alcoholic menus into their establishments, courtesy of IHOP itself. While a handful of IHOP locations already serve alcohol, they previously had the autonomy to choose what to offer and introduce new products.
The new IHOP menu includes Bud Light, Blue Moon, and Corona Beers as well as Barefoot Bubbly Brut, Barefoot Bubbly Chardonnay, and Barefoot Cabernet Sauvignon. Some locations may offer local beverages as well. There are no hard alcohol beverages on the menu to maintain IHOP's family-friendly vibe.
Two IHOP outlets in New Mexico will start serving alcoholic options as of this week, according to the company's announcement on Thursday. Another location in San Diego plans to start offering alcoholic beverages in September. IHOP President Jay Johns commented on CNN Business that they expect around 9 restaurants in markets like New York, Rhode Island, Maryland, and Ohio to introduce alcohol menus by the end of the year.
IHOP hopes this list will only mark the beginning.
"If everything goes well, we'll hit the gas and go faster," said Johns.
Convincing Franchise Owners
Johns isn't sure if alcohol will be offered at all locations in the future. But he emphasized, "We want it to be as broad as possible." He anticipates there will eventually be around 1000 restaurants capable of serving alcohol. The total number of IHOP restaurants stands at about 1750.
However, for the program to succeed, IHOP needs to convince its franchise owners that investing in a wine list will yield a profit. Those participating in the program must acquire a liquor license, train their staff in serving alcohol, and familiarize themselves with new menu items. Given the challenges of a recent sales dip and national labor shortage, this could be a significant development. The second-quarter sales of IHOP restaurants that have been open for at least one year surpassed the previous year's but are still below the 2019 second-quarter sales.
IHOP aims to attract late-day drinkers with the addition of a wine list, as it has long sought to generate interest in its menu options outside of breakfast. In 2018, the company temporarily changed its brand name to "IHOb," a marketing gimmick meant to draw attention to its burger options.
"Obviously, alcohol fits in with our strategy … finding more options for people to enjoy their dinner or lunch," said Johns.
Cracker Barrel introduced alcohol to hundreds of its locations last year, stating that it draws in customers who otherwise avoid Cracker Barrel and opt for establishments that serve alcohol. Taco Bell has also added alcoholic beverages to its menu in the past few years.
The program is currently in "test mode," said Johns. The first three restaurants volunteered to serve as early adopters, feeling secure with their staff. "They have the confidence to execute," he said.
Franchise owners overseeing nearly all IHOP locations can look forward to the program. With higher profit margins on alcohol sales, the franchise owners stand to benefit financially from the program, according to Johns. Furthermore, if customers spend more overall due to alcohol purchases, the tips for waitstaff also increase.
Given the simplified alcohol menu, "we thought it would be easy to implement," said Johns.
Additionally, IHOP's culinary team has created complementary dishes to pair with the alcoholic beverages. For instance, you could order a mimosa with French Toast, a Chardonnay with a Southwest Chicken Burrito, or a Corona Extra with a Poblano Omelette. These pairings can aid servers in upselling products.
Further Reading:
IHOP's inclusion of alcoholic beverages on its menu is primarily a business decision envisioned for franchise restaurants. A host of IHOP franchise owners have already offered alcohol to attract late-day drinkers, who seek an alcoholic beverage to complement their meal.
The addition of alcoholic beverages like Bud Light, Blue Moon, and Corona Beers, as well as wines like Barefoot Bubbly Brut, Barefoot Bubbly Chardonnay, and Barefoot Cabernet Sauvignon, relies on franchise owners' support and commitment. Despite the hurdles of acquiring a liquor license and training staff, IHOP has moved forward with its goal of making the family-friendly IHOP restaurants more successful.
