Good day. Thank you for standing by. Welcome to the Dine Brands Global Third Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press star one one on your telephone. You'll then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today. Please go ahead. Good morning, and welcome to Dine Brands Global's third quarter 2023 conference call. I'm Brett Levy, Dine's Vice President of Investor Relations and Treasury. This morning's call will include prepared remarks from John Peyton, CEO, and Vance Chang, CFO. Following those prepared remarks, Tony Moralejo, President of Applebee's, and Jay Johns, President of IHOP, will also be available to address questions from the investment community during the Q&A portion of the call. Please remember our safe harbor regarding forward-looking information. During the call, management will discuss information that is forward-looking and involves known and unknown risks, uncertainties, and other factors, which may cause the actual results to be different than those expressed or implied. Please evaluate the forward-looking information in the context of these factors, which are detailed in today's press release and 10-Q filing. The forward-looking statements are as of today, and we assume no obligation to update or supplement these statements. We will also refer to certain non-GAAP financial measures, which are described in our press release and also available on Dine Brands' Investor Relations website. For calendar planning purposes, we are tentatively scheduled to release our Q4 2023 earnings before the market open on February 28, 2024, and to host a conference call that morning to discuss the results. With that, it is my pleasure to turn the call over to Dine Brands' CEO, John Peyton. Thanks, Brett, and good morning, everyone. Thanks for joining us. Today, we'll provide updates on Dine's Q3 results and how we're advancing our strategic growth agenda, or as we call it, our Recipe for Growth. Vance will then provide a detailed financial update, including an update to our full year guidance metrics, and following those comments, Tony and Jay will join us for Q&A. To start, I'll share some thoughts on what we're seeing with respect to guest behavior and the consumer mindset. During the quarter, we noticed that guests are limiting their discretionary spending and have become more selective with where they choose to spend their money. Despite this, we believe that eating out continues to be an occasion our guests value across our brands. We're seeing our guests maintain spend in family and casual dining brands while tightening their wallets on quick service brands. We're also seeing guest traffic on weekends, and key holidays outperform the competition, further indicating that guests prioritize a full-service experience, even if it means they'll have to skip out on their next quick-service dining occasion. At the same time, we believe that decreased personal budgets are leading guests to ask, "Where should we go to eat less?" and, "Should we just cook at home more?" This means we're not only competing with other restaurant brands, but also with home-cooked meals. In general, we see guests prioritizing dining in and enjoying a full restaurant experience, which aligns with Dine's core strengths of providing abundant value and exceptional experiences, qualities deeply ingrained in the DNA of each of our brands. This is particularly important during the upcoming holiday season when restaurant visits increase. Now turning to our results. Our third quarter results highlight the resilience of Dine's franchise model. Despite lapping strong comps and an increasingly competitive landscape, we posted solid EBITDA results. First, Q3 revenue of approximately $203 million versus $230 million in the prior year. The difference is largely a result of the refranchising of 69 company-owned restaurants in October of last year to a franchisee. While company-owned revenues are now zero because of the refranchising, we benefit from the consistency of royalty income combined with reduced operations-related expenses. Second, adjusted EBITDA of $60.6 million, compared to $63.6 million in Q3 of 2022. The difference, again, is due to the refranchising of the company-owned restaurants. IHOP posted its 10th consecutive quarter of comp sales growth, up 2% year-over-year, and outperformed the family dining segment on sales for eight out of the 13 weeks of the quarter. Average Q3 weekly sales for IHOP were $37,800, exceeding pre-pandemic highs. Applebee's same-store sales declined 2.4%. However, average Q3 weekly sales for Applebee's were over $52,000, which also surpassed pre-pandemic highs. Throughout the quarter, we continued to focus on initiatives to drive growth and efficiency. First, we leveraged investments in technology, marketing, and training to improve both guest experiences and loyalty programs. Second, we introduced menu innovations and supported marketing initiatives to further engage our guests and better understand what they're looking for in our brands. This has been a huge area of focus with activity across both IHOP and Applebee's as we advance culinary innovation and the opportunities to lean into abundant value. And third, we remain highly focused on new development initiatives, and we're driving ahead with plans in this area to support unit growth over time.... These three areas make up our recipe for growth. Now, let's review the quarter highlights for each brand, starting with Applebee's. As I mentioned at the start of the call, Applebee's comp sales were down 2.4%. However, Applebee's continued to maintain sales volumes by executing promotional tactics, such as All You Can Eat Wings, to increase demand throughout the quarter, while still looking to advance its plans to drive traffic over the long term. Applebee's guests want compelling value and a great dining experience at an affordable price. Our strategy leverages fan-favorite menu items, new culinary options, and promotional offerings that appeal to both new and existing guests. Although there's been a decline in guest traffic, our check levels have shown an increase compared to 2022. In Q3, Applebee's offered several promotions to drive profitable traffic. For example, during our seven-week All You Can Eat Wings program, we sold 7.1 million pounds of boneless wings. That's about 114 million individual wings. The campaign performed better than our internal expectations, driving incremental sales, tickets, and franchisee margin dollars, and introducing new guests, particularly Gen Z, to our brand. In October, we brought back the iconic Dollarita for the first time since 2020, and while we'll wait to speak to the full results of this month-long promotion on our Q4 earnings call, we're pleased with the preliminary results. On the technology side, Applebee's is far along in its effort to redesign and relaunch its website and app, details of which will be revealed in the coming weeks. Two months ago, we launched Applebee's guest experience program, using Qualtrics's experience management platform to gather valuable feedback from our guests. We're pleased guest participation surpassed industry benchmarks and our own expectations, and this positive engagement highlights our guests' strong connection with the brand and provides us with valuable insights to meet and exceed their expectations. During the last five months, Applebee's culinary team has tested more than 200 new menu concepts, ranging from different cuisines to innovation of current menu items. We also have new beverage concepts rolling out in 2024, which are also generating positive anticipation throughout the franchise system. During the quarter, Tony strengthened his leadership team by hiring two industry veterans, a new Vice President of culinary, who brings a contemporary and innovative mindset to our menu, and a new leader of development focused on conversions, developing our new prototype, and our remodel program. Menu innovation and development are key focus areas for the brand, and we look forward to providing progress on these initiatives soon. Now on to IHOP. The quarter's comp sales growth was fueled by the introduction of the brand's new menu, combined with compelling offers. The data we're gathering from our loyalty program enables us to methodically plan promotions and menu offers that are most likely to appeal to our guests. As a result, we continue to see the brand gaining traction amongst a younger demographic. During the quarter, we focused on breakfast equities that span day parts, balancing both sweet and savory options to meet all cravings. First, in early July, we introduced pancake tacos, which came in sweet and savory flavors for a limited time, with three pancake tacos for $6. We sold nearly two million pancake tacos in just four weeks, and they were a hit in the restaurants and on social media. Overall, the campaign had over one billion media impressions. At the end of August, we introduced biscuits with flavors like fresh strawberries and cream, and bacon, egg, and cheese. Our biscuits premiered with a special introductory offer of breakfast biscuits with a side for $7 before becoming part of our core menu in September. During the quarter, we also expanded our waffle category. Our original chicken and waffles is one of our top-selling menu items for dine-in and to-go, and after receiving guest feedback asking for more variety, we expanded to add new flavors, including our new Nashville hot chicken and waffles. Finally, as we discussed on our Q2 call, we launched one of our most comprehensive menu updates in Q2, and the new and expanded categories of Benedicts and crepes are performing well. IHOP has always been known for its family-oriented menu and guest experience. To celebrate the brand's sixty-fifth anniversary, IHOP brought back its Kids Eat Free promotion during the month of August, and its All You Can Eat Pancakes for $5, both helping IHOP outperform the Black Box family dining index in comp sales, check, and traffic during the promotion. The brand continues to build its consumer-packaged goods program. In partnership with Kraft Heinz, we're selling our 100% Arabica coffee in approximately 25,000 retail stores. Additionally, in July, we introduced a new IHOP iced latte with cold foam at Walmart, with planned expansion to other retailers in Q1. Shifting to technology, we're on track for the new point-of-sale system to be completed by early 2024, and the tablet rollout is progressing accordingly. Our loyalty program, the International Bank of Pancakes, is steadily growing, now with seven million members. More information will be provided next quarter. Quickly touching on Fuzzy's. We added Fuzzy's to our existing portfolio because it's a young, compelling brand with the potential for substantial growth over the next decade by capitalizing on the scale and resources of Dine. In September, I attended the Fuzzy's annual franchisee conference called Family Reunion. I was blown away by the terrific energy from the franchisees, who all seemed energized by the brand and its plan for new menu offerings, future restaurant designs, and marketing innovation. One of the biggest moments from the franchisee conference was the unveiling of Fuzzy's new Baja strategy, a comprehensive plan and state of mind that takes the brand back to its roots, embracing the Baja lifestyle and cuisine.... It includes new restaurant design elements, a menu refresh, and enhancements to the overall guest experience. Testing will begin in Q4, with a full national rollout planned in Q1 of 2024. On the international side of the business, we opened 16 units so far this year. Our main focus remains on opportunities in our core international markets of Puerto Rico and the Caribbean, Latin America, the Middle East, and Canada. The international division delivered strong comp sales growth and is the incubator for our dual-branded IHOP Applebee's restaurants, of which there are now six open in the Middle East and Canada. Before I turn it over to Vance, I want to emphasize that our brand teams and franchisees are expertly navigating a still challenging economic environment through smart, compelling marketing, engaging promotions, and best-in-class service. Their commitment to upholding the highest standards is central to our recipe for growth, and it will continue to steer us forward. With that, I'll turn it over to Vance. Thank you, John. As you just heard, we had a mixed quarter in terms of comp sales, but we continue to see the strength of our business model reflected in our ability to generate steady cash flow and EBITDA. On the top line, consolidated total revenues, excluding the refranchised Applebee's restaurants, increased to over $200 million in Q3 versus $195 million in the prior year. Our total revenues decreased 13% to $202.6 million, compared to $233.2 million for the same quarter of 2022. The change was primarily due to the refranchising of the Applebee's restaurants in October of 2022. If we exclude advertising revenues, franchise revenues increased 6.4%. Rental segment revenues for the third quarter of 2023 remained flat at $29 million compared to the same quarter of 2022. The rental segment margin increased 3%. Our company restaurant operation sales were approximately $0.3 million for this third quarter, compared to $38.2 million for the same period of last year, as we only had one company-operated restaurant in Q3. G&A expenses increased nearly 5% to $48.6 million in Q3 of 2023, up from $46.3 million in the same period of last year, mostly due to an increase in compensation-related costs, offset by a decrease in occupancy costs. Adjusted EBITDA for Q3 of 2023 decreased to $60.6 million from $63.6 million in Q3 of 2022. Adjusted diluted EPS for the third quarter of 2023 was $1.46, compared to adjusted diluted EPS of $1.66 for the same period of last year. Now, let's turn to the statement of cash flows. We had adjusted free cash flow of $54 million for the first nine months of 2023, compared to $52.4 million for the same period of last year. Cash provided by operations at the end of the third quarter of 2023 was $79.3 million, compared to cash provided from operations of roughly $63.5 million for the same period of 2022. CapEx through Q3 of 2023 was $32 million, compared to $19.5 million for the same period of 2022. We finished the third quarter with total unrestricted cash of $98.2 million, compared with unrestricted cash of $98 million at the end of the second quarter. Additionally, we continued to return capital to investors. Through Q3 2023 year to date, we've returned approximately $203 million of capital back to equity and bond investors, including debt reduction as part of our refinance, demonstrating our prudent capital allocation strategy. Next, let me discuss Applebee's performance. Q3 same-store sales were -2.4% as we lapped strong comps from the year prior and we continue to face a price-sensitive consumer environment. However, as John mentioned earlier, Applebee's sales results have remained fairly steady, as average weekly sales were over $52,000, including over $11,000 from off-premise, or close to 22% of total sales, of which 11% is from to-go and 11% is from delivery. IHOP sales continued their positive momentum throughout the quarter, with Q3 same-store sales growth of 2%. Average weekly sales were over $37,000, including over $7,000 from off-premise, or close to 20% of total sales, of which 7% is from to-go and 12% is from delivery. On the labor front, our franchisees are reporting that restaurants' staffing continues to steadily improve. As more and more people return to the workforce, labor shortages are reduced, helping alleviate operational challenges in our restaurants. On the commodities front, our outlook for the full year for our franchisees remains consistent with what we previously provided. Both brands in the flat to low double single digits range through the remainder of the year as costs turn deflationary. Applebee's commodity costs improved by over 2% versus a year ago, and over 80% of Applebee's purchase prices are protected through the end of the year. IHOP's commodity costs have improved 3% versus last year, and its basket needs are locked at a similar level to Applebee's.... While our data indicates that overall consumer inflation continues to ease, we do expect inflation levels to remain moderately elevated in 2024. Now, I would like to provide an update on our financial guidance for the year. Starting with our G&A, we're reducing the top end of our expected G&A range for the year as we take proactive measures in managing our G&A spending. Our new 2023 G&A forecast guidance is $200 million-$205 million, compared to our prior guidance of $200 million-$210 million. With EBITDA, we're raising the lower end of our adjusted EBITDA range. Our expected adjusted EBITDA range is now $245 million-$255 million, compared to our prior guidance of $243 million-$255 million. We're also maintaining our CapEx range of $33 million-$38 million. Finally, moving on to development. Development is an important growth driver, and we have strategies in place across both brands to sustainably expand our footprint, both domestically and internationally. Through year to date, IHOP has opened 29 domestic restaurants, and many of those were conversions. However, as we enter the fourth quarter, our franchisees are still experiencing some near-term development headwinds, including permitting and construction delays, which could cause some of the openings to slip to 2024. As a result, we now expect IHOP development to be between 20-30 net openings for 2023, compared to 45-60 net openings we previously stated. Again, I want to emphasize that this change to guidance is the result of ongoing construction delays that have made it more challenging to accurately forecast the timing of these openings. IHOP still has a strong development pipeline as franchisees are excited to expand the brand, and we remain bullish on IHOP's long-term growth. On the Applebee's side, our development guidance remains unchanged, and the brand continues to execute the three-part plan we outlined last quarter, which includes the creation of a new restaurant design that matches the modern needs of our guests. Despite the mixed quarter in terms of comp sales, we continue to see the strength of our business model highlighted by our steady cash flow generation and EBITDA, and we remain focused on executing on our strategic priorities to drive long-term shareholder value. So now I hand the call back to John, and we'll open it up for Q&A. Hey, thanks so much, Vance. As a reminder, Jay and Tony are both on the line, along with me and Vance, and they're here to answer your questions. Kathy, please open up the queue, and we'll take the first question now. Yes, thank you. As a reminder, to ask a question, press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile our Q&A roster. Our first question comes from the line of Eric Gonzalez with KeyBanc Capital Markets. Please proceed with your question. Hi. Hi. Thanks. Good morning. My question is about Applebee's. I'm wondering if you could talk a little bit more about how the quarter progressed from a traffic perspective. You're on air with Boneless Wings for a good part of the quarter. So can you talk about how the promotion went, what you saw as that promotion rolled off? And also, I'm curious about the return of the Dollarita. Maybe if you could talk about what drove that decision to bring it back after the multi-year hiatus, and anything you can share about your expectations for that promotion in terms of traffic improvement in the fourth quarter. Thanks. Sure. So Tony, why don't you take both those questions about wings and Dollarita? Yeah, happy to. Hey, Eric. You know, we don't traditionally talk in detail about traffic, but it's obviously something we monitor closely. What I'll say about the quarter is that we were pleased with the performance of All You Can Eat Boneless Wings. We experienced quarter-over-quarter traffic improvement, profitable sales, and we brought younger guests into Applebee's. As for Dollarita, I'll save the specifics on Dollarita's performance for next quarter, but we're really excited about what we've experienced so far. And, you know, I'm happy to share that 93% of all the transactions involving Dollarita included the purchase of a food menu item. As for why, you know, guests want two things from Applebee's every time they visit us. They want great value, and they want a great experience, and Dollarita delivers on both. You'll continue to see Applebee's innovate with best-in-class marketing campaigns that'll continue to surprise and delight our guests. Got it. And then if I can maybe just ask about the overall operating environment, specifically on value. You know, from an industry perspective, are you seeing an uptick in promotional offerings from the competitors? And how has the brand reacted to one of your largest competitors coming back on air with value? Have you seen any sort of impact when they're back on air? Yeah, happy to take that one as well. You know, we're a brand that's built on value, Eric, and it-- guests know they can count on us when the economy is struggling or they face financial uncertainty. Again, with the All You Can Eat boneless wings promotion, we had strong results. It's an excellent example of abundant value, and, you know, it ignited a TikTok challenge that, again, introduced our brand to younger guests. It's compelling and provides the value that our guests increasingly seek in this environment. Eric, it's John. I would just add in that, you know, both brands think about value in three buckets. You know, there's the everyday value, which is on their menu, you know, every day. You know, there's special moment in time LTO offerings, and then there's, you know, exclusive value via the loyalty programs. And what both these brands do well, since they've been positioned as the value brand in their category for decades, is they know how to read the market. They have great data about their customers, particularly IHOP, most recently with its new seven million members in the loyalty program. So, you know, they lean into one of those three categories, everyday value, LTOs, or loyalty, you know, as they see the need and as they read the market, and as they also see what the competitors are doing. So they’ve got a sophisticated levers that they can pull when they need to. Thanks. I'll hop back in the queue. Thank you. One moment for our next question. This question comes from the line of Jake Bartlett with Truist Securities. Your line is now open. Great, thanks for taking the question. You know, mine was really about the sales drivers ahead that you see specifically at Applebee's. And you talked about, you know, a lot of tests, menu, new menu innovation, and that 2024, I think, is gonna be more of a catalyst there. What is the cadence that you expect? Should we expect kind of a more meaningful, you know, innovation really kind of out of the gate in 2024, or is that something that you think is gonna just build throughout the year? Yeah. Tony, you're on, you're on center stage today. Yeah, look, we're focused on innovation in multiple areas. So with respect to our value offerings, you know, we're looking to create new, compelling value offerings and to complement those with our, you know, our tried-and-true favorites, like a Dollarita, like an All You Can Eat boneless wings. We're focused on innovation on the culinary side with our menu. We know that we need new menu options that appeal to a younger guest. We're focused on innovation with respect to our prototype, which, you know, Vance mentioned in his opening remarks. So really, you're gonna see innovation throughout different parts of our business. And on top of all that, you'll see a renewed focus on our assets. You know, a lot of our restaurants are over 20 years old, and so they need, they need to be, they need to evolve, and they need to be renovated. So we've got a reimage program that we're launching later this year. So you'll see it through different stages. These are all work streams that currently are being addressed in parallel, but you'll see them come to fruition over time over the course of the next year. Okay. And I want to, you know, build on Eric's question about, you know, really the trend throughout the quarter. And I know you typically, you know, don't provide too much detail there, but you did mention that you stressed that IHOP was very consistent throughout the quarter. So, you know, I guess that leads me to wonder how, you know, how Applebee's trended throughout the quarter. If you can help us just with a trajectory, you know, that would be helpful as we look forward to the fourth quarter. Yeah, so you know, I'm happy to take that one, as well. You know, we don't typically talk about intra-quarter trends. You know, we're just a few weeks into Q4, so there isn't much I can share with you for Q4, otherwise as well. Okay, but I think you've mentioned that Applebee's was consistent in the third quarter, month to month, but you can't say the same for Applebee's, I assume? So for Applebee's in the third quarter, obviously, the all-you-can-eat promotion, I think, met or exceeded our expectations. So it was probably a stronger period within the quarter. Okay. And then my last question is on G&A, and you lowered the guidance a little bit for the year. You know, I'm wondering, you know, how much of that was kind of tightening the belt there, maybe pulling back on some of the initiatives a little bit in the near term versus your incentive comp and things like that, which would be temporary. The basis of the question is trying to figure out, you know, what the impact, you know, of the lowered outlook this year, you know, what the implication is for 2024. Sure, Vance, why don't you take that question? Hey, good morning, Jake. So it's a mix of both. So we are constantly evaluating sort of what to pull back, what to slow down, what to accelerate within our G&A, with all the initiatives we're working on. So the short answer to your question is, it's a little bit of both, but you know, our G&A reflects sort of the existing commitment to improve franchisee support and to improve guest experiences. And they take time, these projects, but they're building blocks to any successful franchisor, right? So you know, we have and will continue to apply this disciplined approach to G&A, you know, kind of as evidenced by this quarter, when we achieved spending level below Street expectation. Great. I appreciate it. Thank you. Thank you. One moment for our next question. This question comes from Jeffrey Bernstein with Barclays. Please proceed. Great. Thank you very much. Two questions. The first one is just on the. T he unit growth, and I know you mentioned it's an important part of the story, you tempered IHOP guidance, but it seems like it's due to permitting and construction delays, I should say, not a lack of franchisee demand. I know you maintained the guidance for declines at Applebee's on a net basis. But all of that said, as we look out to next year, I'm just wondering how you think about franchisee sentiment, whether there's any perhaps more cautious tone from franchisees, whether due to a more challenging macro or higher interest rates, whether there's any reason to believe that, you know, the growth outlook might be challenged going into 2024 because of those issues, or whether perhaps you're not hearing anything about that at all from the franchisee conversations. And then I had one follow-up. Sure, Jeffrey, it's John. You know, I'll make a general comment, you know, confirming what you said, that, you know, the IHOP push from fourth quarter into the first quarter, consistent with what happened last year, is about timing related to the new construction environment that seems to be the new normal, and that our franchisees are, you know, meeting their commitments and building as they were. And for Applebee's, you know, we adjusted that guidance, you know, reflecting in part the work we're doing on our prototype and franchisees working with us to be ready to do that. I don't know if, Jay, you have anything to add about IHOP specifically? Yeah, John. Hey, thanks, Jeffrey, for the question. I think the thing that's consistent about IHOP is we've been a steady developer for many, many years now, and we've got a pretty steady pipeline. We've got a good pipeline, and the thing that's just been tough in this environment is predicting when they're gonna open. So that's been a little bit of a challenge for us. But the ones that roll into next year actually just give you a little bit of a jump start on next year's numbers. We've already opened 29 this year. The fourth quarter should be busy for us as well. So, we're gonna end up not quite as well as we thought we would this year based on timing, but we'll end up with a good year, and we'll start the year off strong and have another good year next year, we assume. Okay, so it doesn't sound like in terms of conversations with franchisees, that there's a tempering of enthusiasm for either brand because of the broader macro environment at this point. I guess, looking to 2024, it seems like you're on track for a return to perhaps net openings at the Applebee's brand? Yes, I'll. I'm happy to take that one. We're not gonna provide guidance beyond 2023 on net openings, but we still remain optimistic about Applebee's return to net unit growth. Three of our last four restaurant openings are conversions, and they generate, on average, AUVs that exceed the system average. So we've shifted our short-term focus to conversion opportunities. Our franchisees recognize the benefits of conversions, right? Including shorter construction timelines for openings. As we leverage the benefit of conversions, we'll work on new, efficient, and economical prototype for the system. Collectively, these strategies, they should drive net unit growth. That's still the goal, and we'll keep you posted as we work through these challenges. John, conversions is a key focus for both brands. 70% of IHOP's openings this year were conversions, and we anticipate that that'll be a focus for both brands next year as well. Understood. And then just to, to follow up, I think you made reference to 2024 briefly at least, that you still see moderating but still elevated inflation. Just wondering if you can offer any specifics in terms of your outlook or franchisees outlook, perhaps for commodities and labor, whether you can share what the baskets were in the current quarter, or whether you can talk about directionally what you're thinking for 2024, as we think about the pricing environment going into next year. Thank you. Sure, I'm happy with that. Sure. Hey, Jeff, so you know, we talked about the fact that we're seeing deflationary commodity pricing for our franchisees for the rest of this year, which is a positive note, and our franchisees. We're working with our franchisees closely to encourage everyone to take that into consideration when setting menu pricing, right? But most of that, the improvement that we're seeing is really driven by, you know, probably not a surprise to you, but by coffee, by eggs, by poultry, but wheat and beef sort of remain elevated in our baskets. But next year, look, what we're seeing. It's still early, and we'll have more color next year. But for now, we are expecting sort of moderately, you know, inflation for next year, but not a ton of details just yet. And that's a pretty fast-moving environment that we're managing through. But for now, it does seem like things have meaningfully moderated. Do you guys share the component of the comp, maybe in the current quarter, how much of that is price versus the other components, just so we can gauge the pricing contribution? You mean in terms of our menu pricing, as part of the comp? Was that the question? That would be great. Yeah. Yes, please. I think for Applebee's, let me see. Applebee's menu pricing increase for Q3 year-over-year is about 4%. For IHOP, it's about 8%. Thank you. Thank you. One moment for our next question. This question comes to the line of Nick Setyan with Wedbush. Please proceed. Thank you. Thank you. You know, Q3 was obviously a pretty nice, you know, EBITDA quarter, despite the lower comp at Applebee's. You know, as we kind of look at Q4, sounds like the Dollarita has resulted in some kind of an acceleration, you know, versus Q3. I know you guys don't want to quantify it. You know, G&A guidance lowered slightly. And so the implied EBITDA would, you know, kind of result in a pretty big deceleration from Q3 to Q4, maybe even no growth versus Q4 of last year. And so, you know, just given the expectation that, you know, Dollarita has maybe normalized to even result in a little bit of an uptick in comp in Q4, you know, why shouldn't - why should that be the case? Why shouldn't EBITDA be a little bit higher? Vance? Hey, yes, I will address that. So the part of the... A big part of that, we talked about this in the prior quarters, is that Q4, our G&A, just for seasonality and the usual purposes, G&A tends to be a little higher than other quarters. So that's primarily the reason that you are going to see this quarter-over-quarter drop in EBITDA. It's more related to that than any of the top-line trends that we're seeing. Okay, fair enough. As we kind of look out to 2024, you know, how are you thinking about G&A in this environment versus 2023? I mean, could we actually see G&A be a little bit lower than 2023 in 2024? You know, so, so as I mentioned earlier, you know, our, our G&A, it, it sort of, the, the increase reflects, you know, the in-increase, the improved franchisee support and, and, you know, our efforts in improving the, the guest experiences. And, and they, they do take a little bit of time, right? So w-what, what we've said before is that 2023 level is, is probably the run rate that we, that we need to, to run the business and, and with, with these initiatives that we're running. So, so we're still, we're still looking at sort of that, that level of G&A for, for future, for future years. Okay. And then just last question for me. You know, during Q3, a lot of your peers have cited seasonality as you know one major driver of some of the comp weakness in Q3. Did you, you know, when looking at your comp at both IHOP and Applebee's, I mean, did you see any of that seasonality impact, or do you think, you know, your comps were a result of some other factors? John, should I take that? Yeah, I'm sorry. Yes, Vance, I thought you would take that too, but. Yep. Yep. So, it's our comps. There is certainly, you know, the sort of typical back-to-school trends that we see within the quarter. But a lot of it is really also driven by what campaigns we ran last year versus what campaigns we run this--we're running--we ran this year. So they don't always match, and we mix it up with different campaigns. So, there may be some noise with that, but that's probably a bigger driver than traditional seasonality, other than back to school, I would say. Nick, we've said in the past that, you know, we don't have a particular quarter, you know, that is, you know, stronger or weaker than, than the others. So from a seasonality perspective, we're fairly consistent, which we attribute to the size of, of both brands and their distribution across the, the country. So, we wouldn't lean into seasonality, as Vance said, for the explanation. Okay. Thank you very much. Thank you. One moment for our next question. This question is from the line of Brian Vaccaro with Raymond James. Please proceed. Hi. Thanks, and good morning. I just wanted to follow up on the healthier consumer, and I heard your comments earlier, but could you elaborate on any changes you're seeing as it relates to frequency across different income levels? And then, you know, understanding it's likely up, given your promotional strategy. Could you also comment on the% of sales that are occurring on some sort of discount or value LTO, and how that's trended over the last couple of quarters? Sure. Hey, hey, Brian, it's John. You know, when it comes to the consumer, we didn't see any significant change quarter-over-quarter in terms of income levels. You know, our core consumer household income for both brands is about $50,000-$75,000, as we reported in the past. We didn't see a significant change there. What we did see, you know, based upon the multiple sources of data that we get about our consumer at large, is we saw that they slightly decreased their spend in QSR, and when they came to us, they maintained their average check. And so as we've said also in the past, consistent with the last quarter, since we've raised prices, they're maintaining their average check. They are finding some of the, you know, value items on our menu. But when they come out to dine, they, they still want a full service experience. They want the expectations that they have from Applebee's and, and IHOP, you know, to come together with family and friends, and they're still spending when they're, when they're with us. Now, your second question, could you just repeat the second question? Yeah, just the percent of sales mix on some sort of value promotion or discount and how that's trended over the past few quarters. Vance, my belief is that we don't disclose specifically the mix associated with the specific promotions. Right. And then, you know, Brian, I think that what you will see is that, you know, we talked about our menu pricing increase and that the average check is fairly steady. So the makeup of that is a shift in Pmix. And the Pmix is what, you know, what you're referring to in terms of the consumers managing their check and dropping what they're ordering from us, but sticking with a similar check size. So we are seeing that in our business. Okay, and thank you for that, Vance. So just to clarify that, that's— Is that an Applebee's specific comment, where pricing is up four, but check is flattish, and thus, traffic is down around two year-on-year? Am I interpreting that correctly? Well, we didn't comment on the traffic part, but traffic is down for both brands, but we didn't quantify it. But directionally, 4% in menu pricing for Applebee's and 8% for IHOP. That's correct. Okay, and then, and on the off-premise side, assuming I got my numbers correct and did my quick math correct, it seems like the year-on-year declines in off-premise may have accelerated a little bit, maybe more so at Applebee's than IHOP. Is that accurate? And maybe just comment more broadly on what you're seeing in off-premise, the channels at both brands. I can address that, John. So yes, that is correct. I think that the off-premise volume is dropping a little bit for us, and most of that is really coming from the DSP business. So as consumers are managing, you know, how their dining budget, the delivery fees are part of the decision factor. So that is driving some of that decision-making process for our guests. Okay, thank you. And then just last one for me. I, I appreciate the color you gave on menu pricing during the call in the third quarter. And I know it's a franchisee decision, but I guess, to what degree do you expect menu pricing, that year-on-year tailwind, to moderate in the fourth quarter or even the, you know, over the next few quarters, as the inflation moderate environment has moderated? Thank you. Yeah, it's Brian, John. I'll take that. I mean, you're correct. Thank you for saying it. The franchisees make that decision, we don't. What we've reported is that in the past typically, franchisees raise their prices 2%-3% a year. Obviously, the last couple of years have been an exception to that. As we see the cost of goods, in particular, declining, as Vance described, you know, we would anticipate the franchisees would begin to feel less pressure to raise prices. So if this cost of goods environment flows into next year, then there is the potential for that. All right. Thank you very much. Thank you. Our next question comes from Brian Mullen with Piper Sandler. Please proceed with your question. Hi, good morning. This is actually Aisling on for Brian. My question is just an update on how the late night day part is doing at IHOP, if you're seeing any material traffic changes there, and if you're running any promotions to kind of drive traffic back in that day part. Thanks. Thanks, Aisling. Jay, take that. Yeah, Aisling, thanks for the question. Aisling, we're not seeing a tremendous amount of change in the, the late-night, business. It's been pretty steady. We have added on, over the last couple of quarters, we've added on about 50 more restaurants that are doing, you know, some form of 24 hours, either what we call 24/2 or 24/7. And, I think we're back up to almost 800 restaurants. We're still, probably, 100 or 200 restaurants below where we were, pre-pandemic. But it does slowly keep adding back a little bit of, of restaurants to that time period. As far as the sales themselves, we typically have not done national advertising for overnight hours just because it is so localized on who participates and who doesn't. So they may be doing some individual things to promote that themselves locally, but that's more independent and less of an organized national promotion than we do for the late-night business. But it's pretty steady. It's been running, you know, pretty consistent all year for us. That's great. Thank you for the color. I'll pass it back. Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, press star one one again. Stand by for our next question. This question comes from the line of Todd Brooks with The Benchmark Company. Please proceed. Hey, thanks for taking my questions. I have one follow-up and then one other question. The follow-up, you talked about a focus on finding conversions for new units and how that seems to speed some of the construction time, if you can go into an existing facility. Can you walk through quickly, economics to open via a conversion versus a new build? Just trying to think about it from something that could be enhancing the return for franchisees in a tough and higher cost construction environment going forward. Jay, why don't you take that since 70% of your openings are conversions this year? Yeah, thanks, Todd. We do a lot of these, and there's no one exact number to tell you. It depends what you're converting, it depends the work needs to be done. Sometimes it has kitchen equipment left inside it. Sometimes you're starting with new equipment, depends on the amount of repairs have to be done. But I can tell you this, compared to a new build, you're probably gonna save 30%-40% on the construction cost. Sometimes it could be a little less, a little more than that. But it's significantly cheaper to go in and convert an existing structure than it is to completely start from the ground up. Usually, the permitting goes a little faster. Permitting has been a problem in a lot of places around the country. They, you know, with, with people going remote and not everybody works back in an office again, it just, things have slowed down on trying to get approvals and trying to move paper, you know, across a desk, so to speak. So it's, it's still a little bit of a challenge, but it is still faster doing a conversion to get permitting done than it is, to get all the approvals for, for a ground-up facility. So, we've really been advising our franchisees to look at opportunities that are out there, because there's, there's still quite a few, and there's more happening all the time. And, and for ourselves, we've even got, you know, a smaller prototype, and that, that opens up even conversions of some, some quick service locations that have pickup windows, et cetera. So there's a lot of things you can do with the buildings that are out there, and the franchisees are becoming more and more excited about those as they see more and more results from others around them. That's very helpful. Thanks, Jay. And then my other question, a lot of talk about value on the call and just the abundant value that both brands are focused on delivering. So there's an offensive element. You've got it every day, you've got it through your LTOs, you've got it through loyalty. How about defensively? In an environment where value is becoming more of a focus for both customers and competitors, do you have a reactive value capability to kind of counterpunch when you see promotions from really close competitors that you have for both concepts? Thanks. Yeah, Todd, it's John. I'll take that on, on behalf of both brands. You know, both brands plan their marketing calendar, you know, we're planning 2024 now, right, as you can imagine, and that includes the beverage and the food item promotions for the year. So I like your characterization of it, is that we do it offensively based upon what we believe is necessary at a point in time, based upon our history and based upon what we expect for the future. And the answer about, you know, can we react defensively? Of course, we can, right? Because we're always looking at what our competitors do, and we're always looking at the current market conditions, and we would and will if we need to. But, you know, our strategy, the primary strategy for us is to focus on what we do best, you know, tell our story from a marketing perspective, and not be overly reactive to what a competitor does in any given quarter. That's helpful, John. Would you characterize the competitive intensity right now in the market as expected or something that, that you do think about maybe, "Okay, we, we need to react to a little bit? We would characterize it as expected, given the general consensus about the economy and the state of mind of, you know, our guests in particular. Great. Thanks, John. Thank you. One moment for our next question. This question comes from the line of Jake Bartlett with Truist Securities. Please proceed. Great. Thanks for taking the follow-ups here. Just real quickly, following up on Brian's question earlier, Brian Vaccaro. He asked about the value mix, and you guys have shared, and this is at Applebee's, you've shared in the past, and last quarter it was 19%, in the first quarter was 15%. So that's the number I'm looking for an update on. And that's, you know, LTOs and value-oriented menu, that section. Welcome back, Jake. So, yeah, I do, I do recall. So you did disclose it. Yeah, it was 19 last quarter and 15% in the first quarter. Mm-hmm. And I just do we have that for this quarter, Vance or Tony? I don't, I don't know that we have it handy. I don't have it handy, John. All right, so we'll, we'll think about that as a follow-up, Jake. Got it. Great. Yeah, John, I don't, Jake, I don't have it handy either, but I can add a little color to the value question, and that is, we did see guests trade down into the lower tiers of our value menu, or two for 25, value menu, as well as trading into it. So there was a little bit of a check management with respect to that, but we can follow up with you directly to get you the exact percentage. I appreciate it. I appreciate it. Then the. Oh, oh, hey, Jake, one second. Mm-hmm. Sure. This just in from our finance team that's helping out. 13%. 13. So it went down a bunch? Yes. Okay, thanks. And then the other question was on CapEx, and I just wanna make sure I understand your guidance versus kind of what's reported on the cash flow statement. I think it's, you know, $32 million year to date from what's reported for CapEx, and then the guidance is, you know, $33 million-$38 million. So I just wanna make sure that those are the same measures. So I wouldn't imagine it would go down so much in the fourth quarter. Just to clarify there. And then what you'd expect, really, kind of big picture for CapEx moving into 2024, whether you think it should, you know, be coming down as some of these tech investments are lapped, or just, you know, some big picture directional commentary for 2024 in CapEx. Sure. Hey, Jake, this is Vance again. So, for CapEx, you know, we're pretty much close to most of the initiatives that we've been working on. So now, the CapEx spend, you know, year to date and our guidance for this year, just as a reminder, it does not reflect about $10 million of TI reimbursements that we've received year to date. So, comparatively speaking, versus last year, it's already down meaningfully, and then we do expect, going forward, that the CapEx level will be more in line with historical levels, unless we have, you know, great return projects and, you know, and as our business and the restaurant sector evolve over time. Overall, you know, we've, you know, we're at the tail end of our, you know, CapEx initiatives. Thank you. One moment for our next question. Our final question comes from Andrew Wolf with CL King. Please proceed. Hi, thanks. My question is on, if I heard it right, I think one of y'all talking about Applebee's mentioned that volumes were flat despite the comps, you know, coming in down. So I think that, you know, that speaks to the level of discounting that, you know, obviously people who came for the all-you-can-eat promotions enjoyed. And my question is, you know, as you look at the supply chain, given, you know, the vendors, whether it's ribs or whatever is being promoted, you know, their volume's going up, logistics are getting, you know, cheaper on a case basis because of the volume and such. Is this discount something that the vendors participate in so that your franchisees, to some extent, you know, aren't kind of, you know, absorbing most of that discounting? Is that one way that the scale of the company, you know, is able to, kind of, in an efficient manner for the franchisees, bump up the promotionality? I will confess that I don't know the answer to that question. Vance, do you? Yeah. You know, the way we plan the promotions, Andrew, is, you know, because John talked about this earlier, we planned it a year ahead, and we have some visibility in terms of commodity expectations. So we do. That is part of the decisions in terms of what campaigns we're running. You know, so if we know pork pricing is favorable, we tend to, you know, lean heavier with that type, with those promotions. So it's not that we're asking specifically for the vendors to participate, but we factor in the expected inflation into the campaign decisions. Okay, so there's a planning calendar. Okay. All right. Thanks. Okay. Great. Is it always a year, or can you, on an ad hoc basis, change these kind of large scale promotional type of promotions? We can definitely do it on ad hoc basis, and it depends on the situation. John talked about this earlier. We can. We play offense, we can be reactive if we need to. I can't think of any recent examples that we've done that because things have been sort of going on as we expected. So we haven't had to pull any last-minute type of things that were unplanned, but we have the capability to do so. Okay. Thank you. That's it for me. Thank you. I would now like to turn the conference back to John Peyton, Dine Brands CEO, for closing remarks. Thanks, Kathy. Appreciate your facilitation today. Thanks, everybody, for your questions, and coming back around a second time for some questions. You know, we're pleased with the quarter. In particular, you know, I wanna just highlight that average weekly sales for both brands has been in excess of 2019 all year for both brands. And we think we're seeing the results of the resilience of our brands, their relevance, and our efforts around technology and menu and marketing innovation as well as our focus on store level execution. So thanks everybody for the questions, and we will see you again next quarter. Take care. This concludes today's conference call. Thank you for participating, and you may now disconnect.