In a bid to boost business, several U.S.-based restaurateurs are currently focusing on unit expansion both domestically as well as internationally. Glendale, Calif.-based restaurateur, DineEquity, Inc. (DIN) is also focused on expanding its overall presence.
Recently, the company unveiled its first IHOP branded restaurant in Jeddah, Kingdom of Saudi Arabia under a licensing agreement with Alshaya Trading Co., W.L.L.. Alshaya Trading Co. is a provider of commercial equipment for homes and offices.
Since the signing of the multi-franchise agreement with M.H. Alshaya Co. in 2012, DineEquity and Alshaya have together opened a few units in Kuwait and the United Arab Emirates under the IHOP brand. This opening represents the fifth restaurant under this agreement.
Going forward, the agreement calls for the development of 40 restaurants in the Middle East and the North Africa region. These include expansion projects in Lebanon, Qatar, Oman, Bahrain and Egypt.
Like DineEquity, another restaurateur The Cheesecake Factory Inc. (CAKE) also opened a restaurant in Jeddah, in association with Alshaya Trading Co. Cheesecake’s licensing agreements with Alshaya are targeted toward the development of its restaurants in United Arab Emirates, Kuwait, Bahrain, Qatar and the Kingdom of Saudi Arabia and other operating markets in the Middle East and North Africa, Russia, Turkey and Europe. This would likely intensify competition for DineEquity, Inc.
DineEquity presently has a short-term Zacks Rank #3 (Hold). Some better-ranked stocks in the restaurant industry include Cracker Barrel Old Country Store, Inc. (CBRL) and Jack in the Box Inc. (JACK). Both these stocks hold a Zacks Rank #2 (Buy).
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