From the filed FDD — automated extraction, check the source
2026 FDD
SBA-eligible · directory code S0846 since 2017
IHOP
Breakfast & brunch · parent company: not identified
IHOP (International House of Pancakes) is a family-restaurant chain best known for pancakes and all-day breakfast, plus lunch and dinner; this entry is its non-traditional program for venues like travel centers, airports, or campuses. A franchisee operates an IHOP outlet, managing kitchen and service staff.
IHOP net unit count grew 0.2% over 2021–2025 per its FDD Item 20.
New to franchising? Start here
A franchise is a business where you (the franchisee) pay a company (the franchisor) for the right to open and run a location using their brand and system — think a local Anytime Fitness or Taco John's owned by a small-business owner, not the corporation.
Before you can buy in, U.S. law requires the franchisor to give you a Franchise Disclosure Document (FDD) — a long legal filing covering its fees, finances, and history. Most numbers on this page come from that document; others come from federal SBA loan records and labor and census data, each labelled with its source:
- Franchise fee — the one-time cost to buy in.
- Royalty — the ongoing cut of your sales you pay the franchisor.
- Item 20 — how many locations opened, transferred and left the system, the main basis for our verdict, which rates how strong the disclosed record is, or says when the system is too new, the filing too old, or the disclosure too thin to judge.
Our rating · opinion
Proven & steady
A real track record with mixed signals. Units fell in 2 of 4 years (2021–2025: 1,638 → 1,642); the fiscal 2025 exit rate was 2.9%, below the 4.6% median across 133 comparable systems (food & dining). SBA loans to its franchisees approved FY1992–2020 charged off far less often than franchise loans of the same years (15 vs about 36 expected, 0.4×).
Exit rate · fiscal 2025
2.9%
vs 4.6% median across 133 comparable systems (food & dining)
Cost to open
$784K–$4.1M
Item 7 total investment range
SBA loan losses · vs same-year loans
0.4×
15 of 208 charged off vs ~36 expected
Market density · Georgia
Typical density
2% thinner than the national average
Email me when this brand’s record changes
A weekly check for new filings, changes to disclosed costs or earnings, SBA loan totals, and verified public-record events. Only changes to these 1 selected brand. No email when nothing changes. Coverage depends on when source data reaches our database.
Unsubscribe in any alert. We never sell your email.
Data as of 2026-10-29. Figures come from IHOP's public FDD filings (latest: MN 2026, extracted 2026-07-22) and SBA FOIA loan records (through FY2026), extracted by us and possibly containing errors. The rating is our opinion, not investment, legal, or tax advice. Franchisor or owner and see something wrong? Report a correction — we review every request.
Buying an existing IHOP? Transfer fee $7,500, resale record and asking-price check →
What each source says
FDD record · SBA loans · model · auditor
The sources broadly agree, and the verdict follows the FDD's operating record.
FDD record · Item 20
Steady operating record
Units fell in 2 of 4 years (2021–2025: 1,638 → 1,642); exit rate 2.9% (fiscal 2025) vs 4.6% median.
SBA loans · vs same-year loans
Far fewer defaults than expected (0.4×)
15 charge-offs among 208 resolved loans approved FY1992–2020; about 36 expected.
Modeled risk
Lower risk
Safer than 82% of scored systems.
Auditor opinion · Item 21
Clean opinion
Unqualified audit, 2026 FDD. Says nothing about franchisee results.
Behind the verdict
the record, factor by factor · Item 20
latest consecutive years · Item 20 Table 1
terminations + ceased-ops vs. all exits · Table 3
transfers vs. base · Table 3
actual vs. projected openings · Table 5
Item 19 disclosure + completeness · shown, not counted in the verdict
Systemwide units
2021–2025
Survival record
FDD Item 20 · outlet status by year
In fiscal 2025, 48 of 1,655 franchised outlets left the system — an exit rate of 2.9% (fiscal 2025), vs a 4.6% median across 133 comparable systems (food & dining). An exit is not a failure: this counts terminations, non-renewals and "ceased — other reasons" as reported, and excludes transfers to new owners.
Show the outlet tables ↓Hide the evidence ↑
| Status (FTC) | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Outlets at start | 1,657 | 1,637 | 1,646 | 1,658 | 1,655 |
| Opened | 30 | 26 | 35 | 25 | 33 |
| Transfers | 146 | 37 | 53 | 46 | 69 |
| Terminations | 0 | 0 | 0 | 0 | 0 |
| Non-renewals | 3 | 7 | 3 | 12 | 9 |
| Reacquired by franchisor | 0 | 0 | 0 | 0 | 10 |
| Ceased — other reasons | 45 | 10 | 20 | 17 | 39 |
| Outlets at end | 1,638 | 1,646 | 1,658 | 1,655 | 1,642 |
| Net change | -19 | +9 | +12 | -3 | -13 |
The franchisor's own finances
FDD ITEM 21 · AUDITED STATEMENTS · 2026 FDD
KPMG LLP gave an unmodified (clean) opinion on the statements in the 2026 FDD; revenue rose 13% from FY2023 to FY2025.
This is the company selling the franchise, not any franchisee. A clean opinion means the statements are fairly presented — not that the business is healthy.
Revenue · FY2025
$182.5M
p. 122 · matched to statement
Net income · FY2025
$77.3M
p. 122 · matched to statement
Where FY2025 revenue came from
54% royalties
initial-fee share not extracted
Show the statement figures ↓Hide the evidence ↑
| Fiscal year | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
| Total revenue | $161.8Mp. 137 · matched to statement | $171.7Mp. 122 · matched to statement | $182.5Mp. 122 · matched to statement |
| Royalty revenue | not extracted | $92.8Mp. 122 · matched to statement | $99.2Mp. 122 · matched to statement |
| Net income (loss) | $67.0Mp. 137 · matched to statement | $74.8Mp. 122 · matched to statement | $77.3Mp. 122 · matched to statement |
| Equity (deficit) at year end | not extracted | $38.0Mp. 121 | $41.1Mp. 121 |
| Cash at year end | not extracted | $1.2Mp. 121 | $897Kp. 121 |
The lender's view
SBA 7(a)/504 loan outcomes · compared with franchise loans of the same years
Banks have made 300 SBA-backed loans to IHOP franchisees since 1992. Of the 208 approved FY1992–2020 that have resolved, 15 charged off — where about 36 would be expected for franchise loans made in the same years. That is 0.4× the expected rate: these loans defaulted far less often than comparable franchise loans.
All-time, 15 of 215 resolved loans charged off (7.0%). That raw figure mixes every approval year since 1992 — loans made in 2006–08 failed at several times the rate of loans made in 2010–13 across all franchises — so it is shown as evidence, not as the score.
0.4×
15 of 208 resolved (FY1992–2020) vs ~36 expected
7.0%
15 of 215 resolved, every approval year
65.0%
charged-off $ ÷ approved $, defaulted loans
$1,624,679
what recent franchisees borrowed
108 mo
approval → charge-off, defaulted loans
—
distinct banks lending
Charge-off rate by loan approval year (%) · dashed line = all franchise loans that year
SOURCE: SBA 7(a)/504 FOIA LOAN DATA (DATA.SBA.GOV), FY1991–PRESENT · MATCHED TO IHOP BY SBA FRANCHISE NAME/CODE · RESOLVED = CHARGED-OFF + PAID-IN-FULL · EXPECTED = SAME-YEAR RATE ACROSS ALL SBA FRANCHISE LOANS, LOANS ≥ ~6 YEARS OLD
What it costs — and what it drags
FDD Items 5–7 · fees, investment, royalty
Buying in means a $25,000 franchise fee (Item 5) and a total investment of $784K–$4.1M (Item 7). The franchisor publishes an earnings claim (Item 19) — read its methodology closely.
To open (Item 7)
$784K–$4.1M
all-in investment range
Franchise fee (Item 5)
$25,000
upfront, one-time
Royalty (Item 6)
4.5%
of sales, ongoing
Starts at a placeholder of $900K — a round figure for the sector, not from IHOP’s filings. Set your own figure and check it against this brand's Item 19 and what owners tell you.
Royalty you'd pay / yr
$41K
4.5% of sales, before profit
Over a 10-yr term
$405K
royalties alone, excl. ad fund
This estimate is computed by software from the brand's public filings and any inputs you enter. No CPA prepared it for you and no assurance is provided on it. Actual results will differ, and the differences may be material.
This is not profit. It covers what the FDD fixes: what you put in, and the royalty you owe on sales. Your take-home depends on food and packaging cost, labor, rent, and the months to breakeven, none of which the FDD fixes for your unit (some Item 19s include cost data — read it).
Build a real pro-forma for IHOP with a buyer-paid CPAHow the earnings claim is built
FDD ITEM 19 · BASIS · 2026 FDD
This filing makes an Item 19 earnings claim; we have not yet read how it is built. Open Item 19 and check which units it covers, which it leaves out, and whether it shows costs.
Show the basis ↓Hide the evidence ↑
Labor record
US Dept. of Labor enforcement · franchisee-level · FY2005–present
Federal investigators have concluded 23 wage cases against operators of this system, recovering $320K in back wages for 1,007 workers, including 4 child-labor cases. These cases name franchisee-owned locations, not the franchisor itself.
Concluded cases
23
Back wages owed
$320K
Employees affected
1,007
Since 2020
0
4 of these cases involved child-labor violations, covering 17 minors across the system's franchised locations.
Read this carefully. The employers in these cases are individual IHOP franchisees — separately owned businesses operating under the brand name — not IHOP itself. The franchisor is not the respondent and in most cases is not a party. What the record shows is how this system's operators run their payrolls, which is worth knowing before you become one of them. Counts rise with system size and with age: a 20-year-old, 10,000-unit system will out-count a young one regardless of conduct. Cases are matched to the brand by trade name and may include misattributed employers. Source: DOL Wage and Hour Division concluded compliance actions, FY2005–present, most recent finding 2018.
Modeled risk
FDD Risk Score · a prediction from disclosure and loan-file features
Modeled from the public record, this brand looks safer than 82% of the systems we score (lower-risk band).
Observed · vs same-year loans
0.4×
15 of 208 seasoned loans charged off
Risk percentile
18th
Checkable · higher = riskier
Modeled · vs same-year loans
0.8×
≈ 13.0% at the all-loan vintage mix
Top drivers: Item 3 litigation (log) (lowers) · System size (log units) (raises) · Investment ceiling (log) (lowers) · Share financed by high-loss lenders (lowers). The brand has 30+ seasoned resolved SBA loans, so the score can be checked against its own record. A linear scorecard trained on brands' vintage-adjusted SBA loss records; full spec and cross-validated accuracy on the methodology page. A score is context, not a verdict.
Public records
Bankruptcy, closure & federal court records · coverage is selective · dockets are not scored
We have no verified public-record signals published for IHOP. This is not evidence that no events exist. Check PACER, the FDD's Item 3 (litigation) and Item 4 (bankruptcy), and recent news yourself.
11 questions to ask an IHOP franchisee
Built from this brand's own disclosures · take it to your validation calls
The franchisor will give you a list of owners to call. Most buyers ask whether they like it. These questions come from what IHOP has disclosed. Each one carries the number it came from, so you can check the answer against the record.
- 01
IHOP’s own Item 20 shows 48 of 1,655 franchised outlets left the system in fiscal 2025 — about 2.9%. Do you know any of those owners, and do you know why they left?
A franchisor will call these “transitions.” An owner three doors down usually knows whether they sold at a profit or handed the keys back.
FDD Item 20 · FY2025
- 02
69 units transferred to new owners in fiscal 2025. When you look at those, were they people cashing out a good business — or getting out of a bad one?
Item 20 counts transfers as neutral, but a transfer can be a good sale or a reluctant exit — the filing does not say which.
FDD Item 20 · FY2025
- 03
SBA loans to IHOP franchisees approved 1992–2020 defaulted far less often than franchise loans made in the same years: 15 charge-offs among 208 resolved loans, where about 36 would be expected (0.4×). Did you finance with an SBA loan, and how close did your first two years come to trouble?
This is the lender's view of how these loans ended, from public federal records matched by SBA franchise code — independent of anything the franchisor discloses — compared with franchise loans made in the same years. A charge-off is a loan outcome, not proof the business closed.
SBA 7(a)/504 loan record, seasoned loans FY1992–FY2020 · 0.4× of same-vintage franchise loans
- 04
Item 7 says the low end to open is $784K; the average recent SBA loan to IHOP franchisees was $1.6M. What did you actually spend to open, all in — and did your loan cover anything beyond the build-out?
Lenders size loans to the project they finance. If owners say they spent near the loan figure rather than the Item 7 floor, budget from what they spent.
FDD Item 7 vs SBA approvals FY2020+
- 05
You pay 4.5% royalty on gross sales, plus the ad fund, before any of your own costs. On your actual revenue last year, what did you take home as the owner — not revenue, take-home?
Royalty is charged on sales, not profit. This is the number the brochure never shows and the one your life actually runs on.
FDD Item 6
- 06
IHOP makes an earnings claim in Item 19. Does your unit look like that number — and do you know which units they included to build it?
Item 19 is legal to build from a flattering subset. Ask whether they excluded new units, closed units, or company stores.
FDD Item 19 · 2026
- 07
How many months did it take to cover your own costs, and how much cash did you burn getting there?
Ramp-to-breakeven working capital is the most underestimated line in any franchise purchase, and the most common reason otherwise-good units fail.
Not disclosed in any FDD — ask an owner
- 08
Item 3 discloses 22 legal matters. Do you know what those were about, and were any brought by franchisees?
Franchisee-brought suits over territory, fees or support tell you how the franchisor behaves when there's a disagreement.
FDD Item 3 · 2026
- 09
What does the franchisor charge for that you didn't expect — required tech fees, mandatory remodels, approved-supplier pricing?
Required spending appears across Items 6, 8 and 11 rather than in one place, so buyers routinely miss the total.
FDD Items 6, 8, 11
- 10
If your agreement came up for renewal tomorrow at current terms, would you sign again?
The single most predictive question you can ask. A hesitation is the answer.
Ask every owner you speak to
- 11
Who else should I call — including someone who left?
The franchisor's list is curated by definition. Former franchisees are where the unflattering truth lives, and current owners usually know how to reach them.
Ask every owner you speak to
Want this as a checklist you can take to the calls?
I'll email you the printable version, and tell you if IHOP’s numbers move — a new filing, a rising exit rate, a distress signal. Unsubscribe in one click.
A broker is usually paid by the franchisor to place you. I'm paid only by you, never by a franchisor you're considering — and the job is pressure-testing IHOP’s numbers, including talking you out of a bad deal.
This page is what buyers see before they call you for validation. If the record above is wrong — or right in a way the numbers can't show — say so. Franchisors: send corrections with the page reference and we will review them against the filing and update or annotate the page. Corrections are checked against the filings; nothing you write is published with your name unless you agree to it.
IHOP franchise questions, answered from the filings
How many IHOP franchised outlets left the system last year?
In IHOP's latest FDD Item 20 (fiscal 2025), 48 of 1,655 franchised outlets left the system — an exit rate of 2.9% — compared with a 4.6% median across 133 comparable systems (food & dining) tracked here. That counts terminations, non-renewals, and "ceased operations — other reasons" as the franchisor reported them; it excludes transfers to new owners. The FDD does not say why each outlet left, and an exit is not the same as a failure.
How much does a IHOP franchise cost?
Per IHOP's 2026 FDD, buying in requires an initial franchise fee of $25,000 (Item 5) and a total initial investment of $784K–$4.1M (Item 7).
What royalty does IHOP charge?
IHOP charges an ongoing royalty of 4.5% of gross sales, per Item 6 of its 2026 FDD.
Does IHOP disclose earnings (Item 19)?
Yes — IHOP makes a financial performance representation in Item 19 of its 2026 FDD. Read it closely: franchisors choose which units and which metrics to include.
How often do SBA loans for IHOP franchises default?
SBA loans to IHOP franchisees approved 1992–2020 defaulted far less often than franchise loans made in the same years: 15 charge-offs among 208 resolved loans, where about 36 would be expected (0.4×). All-time, 15 of 215 resolved loans since 1992 charged off (7.0%); that raw figure mixes every approval year, so we compare with same-year loans instead. A charge-off is a loan loss, not proof the business closed. Source: public SBA 7(a)/504 FOIA data.