It’s almost Christmastime (at least according to my wife’s decorations around the house) and if anyone could get behind pancakes and mozzarella sticks on the same plate, it’s Buddy the Elf. Sweet, savory, deep-fried, and drenched in syrup? That’s practically his vision of the North Pole dinner spread. Starting next year, Applebee’s and IHOP are teaming up in San Antonio, Texas, to deliver just that. It’s the first-ever “dual-concept” U.S. location, and while it sounds like a dream meal for nostalgic restaurant enthusiasts, it’s also a not-so-subtle attempt by their parent company, Dine Brands, to keep both chains from going down the toilet.

And boy, does Dine Brands need it. Their stock’s down a cringe-worthy 29% this year, with revenue sliding from $202.6 million in Q3 2023 to a modest $195 million in Q3 2024. Applebee’s is also slumping with a near 6% drop in same-store sales, while IHOP is barely hanging on with a 2.1% decline.

National data shows that people aren’t eating out like they used to, thanks to inflation and tighter budgets. And when they do splurge, they’re going somewhere cooler. 

So what’s the solution? Smash the two old brands together like some kind of culinary Frankenstein. It reminds me of when my two college friends were struggling and decided to share the rent. Applebee’s and IHOP will share one kitchen, one staff, and one front door. For diners, this means you can order a stack of pancakes with a side of nachos or pair your cheeseburger with a tall stack of French toast. Basically, it’s the ultimate “choose your own adventure” dining experience.

It’s not a bad idea. Taco Bell and KFC have been doing the dual-concept thing for years, and it works. But fast food is a different game. Drive around your city and you’ll see that most sit-down chains aren’t exactly thriving these days. So while this move sounds encouraging, it also feels a little like Dine Brands duct-taping two unicycles together and calling it a Harley.

Before you laugh this off as a doomed experiment, consider this: Dine Brands has already opened 13 of these hybrid Applebee’s-IHOP locations in countries like Mexico, Peru, and Honduras. And guess what? They’re lighting it up, pulling in 1.5 to 2 times the revenue of standalone locations. CEO John Peyton is hoping for a similar result in the USA.

Let’s be real. U.S. diners are notoriously fickle. We love novelty, sure, but only if it delivers. If the food isn’t great or the experience feels like a desperate gimmick, it’s game over. The truth is, Applebee’s and IHOP need this win. Both brands have gone from family favorites to “Well, I guess it’s open” status. 

But it could also backfire. If the hybrid highlights the mediocrity of both brands, it’ll just reinforce why people stopped going in the first place. Pancakes and wings might sound fun, but if the execution is off, Dine Brands will be back at square one (with fewer customers and even more stockholders side-eyeing their choices).

Either way, we’ll soon find out if San Antonio embraces this sweet-and-savory experiment or if it ends up being the saddest mash-up since IHOP tried to convince us it was IHOb in 2018.

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Stock.News has positions in Yum! Brands and Dine Brands mentioned in article.