Financial Data and Key Metrics Changes - Consolidated total revenues increased by 11.9% to $230.8 million in Q2 compared to $206.3 million in the prior year, primarily driven by an increase in company restaurant sales [25] - Adjusted EBITDA decreased to $56.2 million from $67 million in the previous year [26] - Adjusted diluted EPS for 2025 was $1.17 compared to $1.71 for 2024 [26] - Adjusted free cash flow was $48.7 million compared to $52.9 million for the same period last year [27] Business Line Data and Key Metrics Changes - Applebee's reported a 4.9% increase in comparable sales, while IHOP posted a negative 2.3% in comparable sales [7][29] - Average weekly sales for Applebee's were $58,000, including approximately $12,800 from off-premise sales, which accounted for 22% of total sales [29] - IHOP's average weekly sales were $37,800, with $7,600 from off-premise sales, representing 20% of total sales [29] Market Data and Key Metrics Changes - Applebee's value mix was approximately 30% in Q2, while IHOP's value mix was about 19% [7] - Off-premise sales for Applebee's saw a positive lift of 7.6% in Q2 [29] - IHOP's House Faves menu drove incremental traffic and dollar margin for franchisees, leading to a sequential improvement in comparable sales [14] Company Strategy and Development Direction - The company is focused on enhancing menu and value platforms, improving marketing communication, and elevating guest experience [6] - Strategic investments are being made to modernize the brand and improve operations, including remodeling efforts and dual brand conversions [20][21] - The company plans to open at least a dozen dual brand restaurants by year-end, leveraging the complementary nature of Applebee's and IHOP [23] Management's Comments on Operating Environment and Future Outlook - Management noted that consumers are still feeling macroeconomic pressure, leading to changes in ordering behavior [6] - The company remains confident in its strategy to drive traffic, sales, and unit growth, with updated guidance reflecting positive trends [34] - Management expressed optimism about the potential for international expansion and new restaurant formats [19] Other Important Information - The company completed a refinancing transaction with new senior secured notes of $600 million at a fixed rate of 6.72% [28] - G&A expenses increased to $50.8 million due to higher compensation and professional services fees [26] - The company added 12 Applebee's to its portfolio, now operating a total of 70 company-operated restaurants [19] Q&A Session Summary Question: Performance at Applebee's and sustaining operations with frequent menu changes - Management confirmed strong performance driven by the two for 25 platform and emphasized effective training and processes to manage complexity [39][41] Question: Impact of the House Faves platform on franchisee profitability - Management indicated positive results from the House Faves program, leading to an expansion to seven days a week [47][49] Question: Path forward with corporate-owned stores and timeline for profitability - Management expects a timeline of approximately three years to improve operations and refranchise the restaurants for appropriate valuation [53][56]