10 K Research Report
IHOP CORPORATION The first International House of Pancakes ("IHOP") restaurant opened in 1958 in Toluca Lake, California. IHOP was incorporated under the laws of the State of Delaware in 1976. The company has intense growth plan. In November 2007, IHOP Corp. completed the acquisition of Applebee’s International, Inc. (Applebee’s) which became a wholly-owned subsidiary of the company. The IHOP Corp 10K is larger than in years past due to this acquisition. The primary reason for the Applebee 's acquisition was to add a growth vehicle in the casual dining segment of the restaurant industry. IHOP Corp. attribute the goodwill associated with the transaction to the long-term historical performance and the…show more content… The restaurant industry is highly competitive, and that competition could lower their revenues, margins and market share. The business is subject to macroeconomic and other factors that may negatively impact the results of operations. Restaurant development plans under development agreements may not be implemented effectively. IHOP Corp. may have difficulty expanding in new markets outside the United States.
Risks factors can also be related to franchises and the acquisition of Applebee’s. Concentration of Applebee 's franchised restaurants in a limited number of franchisees subjects IHOP to greater credit risk. Franchisees generally are not "limited purpose entities", making them subject to business, credit, financial and other risks. IHOP Corp. business strategy may not achieve the anticipated results for Applebee’s. The significant costs that they incur in connection with the acquisition may not be offset by cost-savings in the future. IHOP may fail to realize the anticipated benefits of the acquisition as a result of risks associated with integrating the business of Applebee 's with their existing business. IHOP may be unable to generate sufficient cash flow to satisfy their significant debt service obligations, which would adversely affect their financial condition and results of operations. IHOP believes the Applebee 's