One of the world's largest full service restaurant companies, DineEquity, Inc. (DIN - Free Report) , announced four new multi-unit development agreements in the Middle East, Asia Pacific and Latin America.
DineEquity operates through its subsidiaries, franchises and operates restaurants under the Applebee's Neighborhood Grill & Bar and IHOP brands. Currently, the company has more than 3,700 restaurants combined in 18 countries and U.S. territories and over 400 franchisees. The company plans to double international locations by 2021 and the recently inked agreements – covering five countries – are likely to assist in the same.
In Asia Pacific, the company plans to bring IHOP brand to Thailand and India. Ten locations are set to open in Thailand by 2021, per the multi-unit franchise agreement with King of Pancakes Co., Ltd. Meanwhile, another agreement with Kwals Catering Private Ltd. – a subsidiary of Kwality Group – calls for 20 locations to open throughout multiple states of Northern and Southern India by 2025.
In the Middle East, the company plans to extend growth of Applebee’s brand via a development agreement with Mohammed Fakhro which includes the opening of six locations in Bahrain and Oman by 2023. Also, in Latin America, the Applebee’s footprint is planned to expand under an agreement with franchisee Collins Restaurant Group, whereby five new locations will be built in Panama by 2021.
Shares of DineEquity have underperformed the broader Retail–Restaurants industry over the last year. While the industry grew 0.4%, the company’s stock dipped 8.5% in the same time frame. A soft industry backdrop and unfavorable currency translations have been hurting DineEquity’s results along with most restaurateurs like YUM! Brands, Inc. (YUM - Free Report) , The ONE Group Hospitality, Inc. (STKS - Free Report) and McDonald’s Corporation (MCD - Free Report) , to name a few.
Nevertheless, the company’s focus on adding new territories based on its strategic growth plan and its 360-degree brand evolution efforts, bode well. It continues to see strong interest in building new restaurants and remodeling existing ones from its international franchisees. All of these should help in reinvigorating the performance of this Zacks Rank #3 (Hold) company. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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