Dine Brands Global DIN Form 10-Q filing Q2 FY2026

Fiscal Quarter End

Our fiscal quarters end on the Sunday closest to the last day of each calendar quarter. The second fiscal quarter of 2026 and 2025 ended on June 28, 2026 and June 29, 2025, respectively.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

See the accompanying Notes to Condensed Consolidated Financial Statements.

See the accompanying Notes to Condensed Consolidated Financial Statements.

Dine Brands Global, Inc. and Subsidiaries

Condensed Consolidated Statements of Stockholders' Deficit

(In millions, except share amounts)

(Unaudited)

See the accompanying Notes to Condensed Consolidated Financial Statements.

Dine Brands Global, Inc. and Subsidiaries

Condensed Consolidated Statements of Stockholders' Deficit

(In millions, except share amounts)

(Unaudited)

See the accompanying Notes to Condensed Consolidated Financial Statements.

See the accompanying Notes to Condensed Consolidated Financial Statements.

Dine Brands Global, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1. Basis of Presentation

The accompanying unaudited interim Condensed Consolidated Financial Statements of Dine Brands Global, Inc. (the "Company," "Dine Brands Global," "we," "us," or "our") have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by U.S. GAAP for complete financial statements. We believe that all adjustments consisting of normal recurring accruals considered necessary for a fair presentation have been included. The operating results for the six months ended June 28, 2026 are not necessarily indicative of the results that may be expected for the fiscal year ending January 3, 2027.

These Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 28, 2025.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities, if any, at the date of the Condensed Consolidated Financial Statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results may differ from those estimates.

Allowance for Credit Losses

The balances of the Company's receivables and long-term receivables are primarily comprised of receivables from franchisees, distributors, and gift card vendors. Generally, accounts receivables are due from franchisees for royalty, advertising and other franchise-related fees, and from distributors related to the sale of proprietary products to franchisees through the Company's network of suppliers and distributors. Gift card receivables primarily consist of amounts due from third-party vendors for cash collected on purchased cards. Notes receivable balances primarily relate to the conversion of certain past due franchisee accounts receivable, cash loans to franchisees for working capital purposes, or financing of the sale of IHOP and Applebee's company restaurants and franchise fees. Interest accrues on notes receivables based on the contractual terms. Leases receivable primarily relate to IHOP franchise restaurants that were developed prior to 2003.

The Company closely monitors the financial condition of our franchisees and estimates the allowance for credit losses based on historical collection experience, credit quality, and current market conditions.

Net Income Available to Common Shareholders Per Share

Net income available to common shareholders per share is calculated using the treasury stock method. Basic net income per share is computed by dividing the net income available to common stockholders for the period by the weighted average number of common shares outstanding during the period. Diluted net income per share is computed by dividing the net income available to common stockholders for the period by the weighted average number of common shares outstanding and dilutive potential shares of common stock. Dilutive potential common shares are reduced by the number of shares that could be purchased by the Company assuming the amount of unvested restricted stock awards would be received as proceeds.

2. Recent Accounting Pronouncements

Newly Issued Accounting Standards Not Yet Adopted

In November 2024, the FASB issued ASU No. 2024-03, "Disaggregation of Income Statement Expenses," which requires public business entities to provide, in the footnotes to the financial statements, disaggregated disclosures of certain expense categories that are included in expense line items on the face of the income statement. The guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027 with early adoption permitted. The Company is currently evaluating the impact of adopting this ASU to our disclosures.

Dine Brands Global, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Continued)

2. Recent Accounting Pronouncements (Continued)

In September 2025, the FASB issued ASU No. 2025-06, "Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements for Internal-Use Software," which simplifies the accounting guidance for internal-use software costs by eliminating the existing project-stage framework. Under the new guidance, entities will capitalize qualifying software costs once management has approved and committed funding to the project and it is probable that the software will be completed and placed into service. The guidance is effective for fiscal years beginning after December 15, 2027, with early adoption permitted. The guidance may be adopted on a prospective, retrospective, or modified retrospective basis. The Company is currently evaluating the impact to our financial statements of adopting this ASU.

3. Cash, Cash Equivalents and Restricted Cash

Cash and Cash Equivalents

The Company considers all highly liquid investment securities with remaining maturities at the date of purchase of three months or less to be cash equivalents. Cash held related to IHOP advertising funds and the Company's gift card programs is not considered to be restricted cash as there are no restrictions on the use of these funds.

The components of cash and cash equivalents were as follows:

Current Restricted Cash

Current restricted cash primarily consisted of cash required to be held in trust in connection with the Company's securitized debt and cash for Applebee's and Fuzzy's advertising funds. The components of current restricted cash were as follows:

Non-current Restricted Cash

Non-current restricted cash of $22.5 million and $22.0 million as of June 28, 2026 and December 28, 2025, respectively, represents interest reserves contractually restricted as required under the terms of our debt agreements.

Dine Brands Global, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Continued)

4. Revenues

The following table disaggregates our franchise revenues by major type:

Changes in the Company's contract liability for deferred franchise and development fees during the six months ended June 28, 2026 were as follows:

The balance of deferred franchise revenue as of June 28, 2026 is expected to be recognized as follows:

5. Receivables

Total receivables balances at June 28, 2026 and December 28, 2025 were as follows:

Dine Brands Global, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Continued)

5. Receivables (Continued)

Changes in the allowance for credit losses during the six months ended June 28, 2026 were as follows:

The $1.8 million of bad debt expense recorded for the six months ended June 28, 2026 is primarily attributable to accounts receivable. The Company's primary credit quality indicator for all portfolio segments is delinquency.

The year of origination of the Company's notes and financing receivables at June 28, 2026 is as follows:

6. Leases

The Company currently leases from third parties the real property for certain company-owned restaurants and leases and subleases to franchisees for certain franchise operated restaurants. The Company also leases office space for its principal corporate office in Pasadena, California. The Company does not have a significant amount of non-real estate leases.

The Company's leases and subleases related to IHOP restaurants generally provide for an initial term of 20 to 25 years, with most having one or more five-year renewal options. Leases related to Applebee's restaurants generally have an initial term of 10 to 20 years, with renewal terms of five to 20 years. Generally, option periods were not included in determining lease liabilities and right-of-use assets related to operating leases. Certain leases also include variable rental payments based on a percentage of restaurant sales if certain restaurant sales thresholds are met.

Dine Brands Global, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Continued)

6. Leases (Continued)

During the three and six months ended June 28, 2026 and June 29, 2025, the Company made the following cash payments for operating leases:

The Company's income from operating leases for the three and six months ended June 28, 2026 and June 29, 2025 was as follows:

7. Long-Term Debt

The Company's long-term debt consists of the following:

_________________________________________ (a) Variable interest rate of 6.14% and 6.56% at June 28, 2026 and December 28, 2025, respectively.

The A-2 Notes

Our Series 2023-1 Class A-2 Notes ("2023 Class A-2 Notes") and Series 2025-1 Class A-2 Notes ("2025 Class A-2 Notes," together with the 2023 Class A-2 Notes, the "A-2 Notes") have a legal final maturity of March 2053 for the 2023 Class A-2 Notes and June 2055 for the 2025 Class A-2 Notes. However, it is anticipated that, unless repaid earlier to the extent permitted under the Indenture, the 2023 Class A-2 Notes will be repaid by June 2029 and the 2025 Class A-2 Notes by June 2030.

The quarterly principal payment of $1.25 million on the 2023 Class A-2 Notes and $1.5 million on the 2025 Class A-2 Notes may be suspended when the leverage ratio for the Company and its subsidiaries is less than or equal to 5.25x.

As of June 28, 2026, the Company's leverage ratio was approximately 5.10x. As a result, the Company did not make quarterly principal payments on the A-2 Notes.

The Credit Facility

The Series 2025-1 Class A-1 Notes (the "Credit Facility" and collectively with the A-2 Notes, the "Notes") generally have an interest rate for advances calculated at a per annum rate equal to the commercial paper funding rate or one-, two-, three- or six-month Term Secured Overnight Financing Rate ("SOFR"), in either case, plus 2.50%. The applicable interest rate for swingline advances and unreimbursed draws on outstanding letters of credit is a per annum base rate equal to the sum of (a) the greatest of (A) the Prime Rate in effect from time to time, (B) the Federal Funds Rate in effect from time to time plus 0.50% and (C) Term SOFR for a one-month tenor in effect at such time plus 0.50% plus (b) 2.00%.

Dine Brands Global, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Continued)

7. Long-Term Debt (Continued)

The legal final maturity of the Credit Facility is June 2055, but rapid amortization will apply if there are outstanding amounts under the Credit Facility after June 2030. The renewal date of the Credit Facility is June 2030, subject to two additional one-year extensions at the option of the Company upon the satisfaction of certain conditions.

As of June 28, 2026, the outstanding balance of the Credit Facility was $100 million. The amount of $0.5 million was pledged against the Credit Facility for outstanding letters of credit, leaving $224.5 million of the Credit Facility available for borrowing at June 28, 2026. The weighted average interest rate for the period outstanding during the six months ended June 28, 2026 was 6.24%.

Covenants and Restrictions

The Notes are subject to a series of covenants and restrictions customary for transactions of this type, including but not limited to maintaining specified reserve accounts, optional and mandatory prepayments and related redemption premiums, and certain indemnification payments. The Notes are also subject to customary rapid amortization events provided for in the Indenture, including events tied to failure of the Securitization Entities (as defined in the Indenture) to maintain the stated debt service coverage ratio ("DSCR"), the sum of domestic retail sales for all restaurants being below certain levels on certain measurement dates, certain manager termination events, certain events of default and the failure to repay or refinance the A-2 Notes on the anticipated repayment dates. The Notes are also subject to certain events of default, including events relating to non-payment of required interest, principal or other amounts due on or with respect to the Notes, failure of the Securitization Entities to maintain the stated DSCR, failure to comply with covenants within certain time frames, certain bankruptcy events, breaches of specified representations and warranties and certain judgments.

Key DSCRs are as follows:

• DSCR less than 1.75x - Cash Trapping Event
• DSCR less than 1.20x - Rapid Amortization Event
• Interest-only DSCR less than 1.20x - Manager Termination Event
• Interest-only DSCR less than 1.10x - Default Event

The Company's DSCR for the reporting period ended June 28, 2026 was approximately 3.0x.

8. Stockholders' Deficit

Stock Repurchase Program

During the six months ended June 28, 2026, the Company repurchased 901,436 shares of common stock at a cost of $29.3 million.

On May 14, 2026, the Company's Board of Directors authorized a share repurchase program of up to $100 million (the "2026 Repurchase Program") in addition to the Corporation's existing share repurchase program, approved in February 2022 (together with the 2026 Repurchase Program, the "Repurchase Programs"). Cumulatively under the Repurchase Programs, the Company repurchased 5,119,471 shares at a cost of $206.2 million. As of June 28, 2026, a remaining amount of $143.8 million in the value of shares may be repurchased under the Repurchase Programs.

Dividends

Dividends declared and paid per share for the three and six months ended June 28, 2026 and June 29, 2025 were as follows:

During the six months ended June 28, 2026 and June 29, 2025, the Company paid dividends of $4.9 million and $15.8 million, respectively.

Dine Brands Global, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Continued)

9. Stock-Based Compensation

The following table summarizes the Company's stock-based compensation expense included as a component of general and administrative expenses in the Condensed Consolidated Statements of Comprehensive Income:

As of June 28, 2026, total unrecognized compensation cost related to restricted stock awards and restricted stock units of $18.8 million and $0.4 million related to stock options is expected to be recognized over a weighted average period of approximately 1.5 years for restricted stock and restricted stock units and 0.6 years for stock options.

A significant majority of the Company’s equity grants occur in the first quarter of its fiscal year. During the six months ended June 28, 2026, the Company granted approximately 360,000 restricted stock and 147,000 restricted stock unit awards with a weighted average grant date fair value of $30.88 and $31.84, respectively. The Company did not grant any options in this period.

For the three months ended June 28, 2026 and June 29, 2025, the Company recorded expense of $0.1 million and the reversal of expense of $0.5 million, respectively, related to liability classified awards. For the six months ended June 28, 2026 and June 29, 2025, the Company recorded expense of $0.8 million and the reversal of expense of $0.2 million, respectively, related to liability classified awards. As of June 28, 2026 and December 28, 2025, a liability of $2.3 million and $3.3 million, respectively, was recorded as Other non-current liabilities on the Condensed Consolidated Balance Sheets.

10. Income Taxes

The Company's effective tax rate was 27.7% for the six months ended June 28, 2026, as compared to 30.6% for the six months ended June 29, 2025. The effective tax rate for the six months ended June 28, 2026 was lower than the rate of the prior year period primarily due to a higher tax deduction related to stock-based compensation resulting from an increase in our share price.

Dine Brands Global, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Continued)

11. Intangible Assets

Changes in indefinite-lived intangible assets during the six months ended June 28, 2026 were as follows:

Gross and net carrying amounts of finite-lived intangible assets at June 28, 2026 and December 28, 2025 are as follows:

The Company reclassified certain intangible assets from indefinite-lived to finite-lived, including $28.2 million tradename in the fourth quarter of 2025 and $2.5 million of other intangibles in the second quarter of 2026.

12. Fair Value Measurements

For financial assets and liabilities, as well as non-financial assets and liabilities that are recognized or disclosed at fair value, we may use the following inputs to derive the fair value:

• Level 1 inputs are quoted prices in active markets for identical assets or liabilities.
• Level 2 inputs are observable for the asset or liability, either directly or indirectly, including quoted prices in active markets for similar assets or liabilities.
• Level 3 inputs are unobservable and reflect the Company's own assumptions.

The Company believes the carrying amounts of cash and cash equivalents, restricted cash, accounts receivable and accounts payable approximate their fair values due to their liquidity or short duration. The Company believes the fair value of the Credit Facility approximates its carrying value as it is based on the SOFR or prevailing benchmark rate.

The fair value of the Company's long-term debt, excluding the Credit Facility, is based on quoted market prices which represent Level 1 inputs. The fair value as of June 28, 2026 and December 28, 2025 were as follows:

Dine Brands Global, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Continued)

13. Reportable Segments

Information on segments and a reconciliation of segment operating profit to income before income taxes is as follows:

Dine Brand Global, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Continued)

13. Reportable Segments (Continued)

Dine Brand Global, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Continued)

13. Reportable Segments (Continued)

Dine Brand Global, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Continued)

13. Reportable Segments (Continued)

(a) Segment items include: Franchise: Costs of proprietary products, bad debt expense, pre-opening training expenses and other franchise-related costs. Company-owned restaurants: Operating expenses at company-owned restaurants include food, beverage, labor, benefits, utilities, rent and other operating costs. Rental: Costs of operating leases, such as rent expense, and interest expense of finance leases on franchisee-operated restaurants.

We do not present a measure of assets for our reportable segments as this information is not used by the chief operating decision maker to allocate resources or assess performance.

14. Business Acquisition

From time to time, the Company may acquire restaurants from franchisees to invest in the system, improve operations and create a blueprint for franchisee success and growth.

On February 23, 2026, the Company entered into an agreement with an Applebee's franchisee to acquire 12 Applebee's restaurants across Virginia and North Carolina for $0.9 million of consideration. The results of operations of the acquired restaurants have been included in the Company's Condensed Consolidated Financial Statements from the acquisition date.

On June 1, 2026, the Company entered into an agreement with an Applebee's franchisee to acquire 48 Applebee's restaurants across Florida, Georgia, and Alabama for $8.7 million, which included $1.0 million of cash and $7.7 million of noncash consideration. The results of operations of the acquired restaurants are included in the Company's Condensed

Dine Brands Global, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Continued)

14. Business Acquisition (Continued)

Consolidated Financial Statements from the acquisition date.

15. Commitments and Contingencies

Litigation, Claims and Disputes

The Company is subject to various lawsuits, governmental inspections, administrative proceedings, audits, and claims arising in the ordinary course of business. Some of these lawsuits purport to be class actions and/or seek substantial damages. The Company is required to record an accrual for litigation loss contingencies that are both probable and reasonably estimable. Legal fees and expenses associated with the defense of the Company's litigation are expensed as incurred. In the opinion of management, these matters are adequately covered by insurance or, if not so covered, are without merit or are of such a nature or involve amounts that would not have a material adverse impact on the Company's business or Condensed Consolidated Financial Statements. Management regularly assesses the Company's insurance deductibles, analyzes litigation information with the Company's attorneys and evaluates its loss experience in connection with pending legal proceedings. While the Company does not presently believe that any of the legal proceedings to which the Company is currently a party will ultimately have a material adverse impact on the Company, there can be no assurance that the Company will prevail in all the proceedings the Company is party to, or that the Company will not incur material losses from them.

Lease Guarantees

In connection with refranchising restaurants to franchisees, in certain cases the Company has guaranteed lease payments. As of June 28, 2026 the notional amount of lease guarantees by the Company was $312.0 million. Excluding unexercised option periods, the Company's potential liability for future payments under these leases is $79.4 million. This amount represents the maximum potential liability of future payments under these leases. These leases expire at the end of the respective lease terms, which range from 2026 through 2058. In the event of default, the indemnity and default clauses in the sale or assignment agreements govern the Company's ability to pursue and recover damages incurred.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Management's Discussion and Analysis of our results of operations and financial condition should be read in conjunction with the Condensed Consolidated Financial Statements included in this Form 10-Q. This Item 2 is organized as follows:

• Consolidated Results
• Key Performance Indicators
• Segment Results
• Non-Segment Results
• Liquidity and Capital Resources of the Company
• Critical Accounting Estimates

Consolidated Results

Total revenues for the three months ended June 28, 2026 increased $10.1 million compared to the prior year quarter. The increase was driven by a $19.1 million increase in company-owned restaurant revenues from restaurants acquired and opened since the second quarter of 2025. This increase was partially offset by a $7.8 million decrease in franchise revenue from lower proprietary product sales, international franchise performance, less franchise termination fees recognized in the current period, and a decrease in Applebee's same restaurant sales change. In addition, franchise revenues decreased as a result of closures and the acquisition of 12 Applebee's restaurants in February 2026 and 48 Applebee's restaurants in June 2026. Total cost of revenues increased $11.1 million primarily due to the increase in company-owned restaurants, partially offset by lower bad debt expense as compared to the prior year quarter.

Income before income taxes in the three months ended June 28, 2026, was lower due to a decrease in gross profit, increase in general and administrative expenses, increase in interest expense and an increase in closure and impairment charges. The increase in general and administrative expenses is primarily due to our investment in company-owned and dual-branded restaurant initiatives, increased reorganization costs, and higher professional service fees from the acquisition of additional company-owned restaurants. The increase in interest expense is primarily the result of the refinancing of our 2025 Class A-2

Notes completed in June 2025 which resulted in increased principal and a higher interest rate. Closure and impairment charges increased primarily due to the impairment of trademarks.

Total revenues for the six months ended June 28, 2026 increased $20.6 million compared to the prior year period, driven by a $30.9 million increase in company-owned restaurant revenues from restaurants acquired and opened since the second quarter of 2025. This increase was partially offset by a $9.0 million decrease in franchise revenues from lower franchisee termination fees, lower proprietary product sales due to a decrease in the types of product offerings, and a reduction in the number of franchised restaurants. The reduction in the number of franchised restaurants was primarily driven by acquisitions completed since the second quarter of 2025 and closures. Total cost of revenues increased $24.6 million primarily due to an increase in company-owned restaurants, partially offset by a decrease in bad debt expense compared to the prior year period.

Income before income taxes in the six months ended June 28, 2026, was lower due to a decrease in gross profit, increase in interest expense and an increase in general and administrative expenses, partially offset by a gain on disposition of assets. The increase in interest expense is primarily the result of the refinancing of our 2025 Class A-2 Notes completed in June 2025 which resulted in increased principal and a higher interest rate. The increase in general and administrative expenses is primarily due to our investment in company-owned and dual-branded restaurant initiatives and higher year to date incentive compensation due to an increase in the number of employees and higher expectations for the remainder of the year as compared to the prior year period. Gain on disposition of assets was primarily related to the sale of land and building of two IHOP restaurants.

Key Performance Indicators

In addition to revenues, cost of revenues, and gross profit in evaluating the performance of each of our brands, management also considers the following key performance indicators in evaluating our business:

"System sales" are retail sales at IHOP, Applebee’s and Fuzzy's restaurants operated by franchisees reported to the Company and revenues generated at company-owned restaurants. Sales at restaurants that are operated by franchisees are not revenues attributable to the Company. An increase in system sales of franchised restaurants will result in a corresponding increase in our royalty revenues, while a decrease will result in a corresponding decrease in our royalty revenues.

"Domestic same-restaurant sales change" reflects the percentage change in sales of domestic restaurants in any given fiscal period that operated during the comparable prior year period and have been open for at least 18 months. Due to new restaurant openings and restaurant closures, the restaurants open throughout both fiscal periods being compared may be different from period to period.

"Same-restaurant sales change" reflects the percentage change in sales of domestic and international restaurants in any given fiscal period that operated during the comparable prior year period and have been open for at least 18 months. Due to new restaurant openings and restaurant closures, the restaurants open throughout both fiscal periods being compared may be different from period to period.

"Domestic average weekly unit sales" represents the average sales generated per restaurant per operating week during the reporting period. This is calculated by dividing total restaurant sales by the number of operating weeks for all restaurants open during the period. For restaurants that were open for only part of the period, adjustments are made to the number of operating weeks to correspond to the period there were restaurant sales.

"Net development" refers to the overall change in the number of restaurants during a period, calculated as total openings less total closures.

_________________________________________ (a) The calculation of franchise sales percentage change and average weekly unit sales excludes restaurants that were closed or acquired by the Company. (b) For the six months ended June 29, 2025, IHOP franchise closures and company-owned openings included 10 restaurants acquired in March 2025. Applebee’s franchise closures and company-owned openings included 12 restaurants acquired in May 2025 for the three and six months ended June 29, 2025; 12 acquired in February 2026 for the six months ended June 28, 2026; and 48 acquired in June 2026 for the three and six months ended June 28, 2026.

Dual-branded restaurants are defined as restaurants that operate our IHOP and Applebee's restaurant concepts under two separate franchise agreements but within one restaurant location. Because of this, each dual-branded restaurant is counted in both IHOP and Applebee’s restaurant count and activity.

As of June 28, 2026, we had 44 dual-branded domestic IHOP and Applebee's restaurant locations. During the three months ended June 28, 2026, we had three existing company-owned Applebee's restaurants which added the IHOP brand, three existing Applebee's franchised restaurants which added the IHOP brand, two existing IHOP franchised restaurants which added the Applebee's brand, and one new franchised restaurant which added to both brands. This totaled 10 dual-branded domestic openings.

During the six months ended June 28, 2026, we had five existing company-owned Applebee's restaurants which added the IHOP brand, six existing Applebee's franchised restaurants which added the IHOP brand, three existing IHOP franchised restaurants which added the Applebee's brand, and three new franchised restaurants which added to both brands. This totaled 20 dual-branded domestic openings.

During the three and six months ended June 29, 2025, we had one existing IHOP franchised restaurant which added the Applebee's brand for a total of one dual-branded opening.

As of June 28, 2026, we had 37 dual-branded international IHOP and Applebee's restaurant locations. During the three months ended June 28, 2026, we had one dual-branded international opening and two dual-branded international closures.

During the six months ended June 28, 2026, we had five new franchised restaurants which added both brands, and one dual-brand international closure. This totaled 10 dual-branded international openings and one dual-branded international closure.

As of June 29, 2025, we had 20 dual-branded international IHOP and Applebee's restaurant locations. During the three months ended June 29, 2025, we had one existing Applebee's franchised restaurant which added the IHOP brand for a total of one dual-branded international opening.

During the six months ended June 29, 2025, we had two existing Applebee's franchised restaurants which added the IHOP brand for a total of two dual-branded international openings.

The following table shows the effects of the domestic and international restaurant count methodology described above as of June 28, 2026 and June 29, 2025:

As our dual-branded business expands, we may reevaluate how these restaurants are counted in future disclosures.

IHOP's system domestic same-restaurant sales increased 1.5% for the three months ended June 28, 2026 as compared to the prior year period, due to an increase in average check partially offset by a decrease in traffic. IHOP's system domestic same-restaurant sales increased 0.8% for the six months ended June 28, 2026 as compared to the respective prior year period, due to an increase in average check partially offset by a decrease in traffic.

Based on data from Black Box Intelligence, a restaurant sales reporting firm ("Black Box"), IHOP domestic same-restaurant sales outperformed for the three and six months ended June 28, 2026 in the family dining category (excluding IHOP). According to Black Box, for the three and six months ended June 28, 2026 the family dining category experienced a decrease in same-restaurant sales resulting from a decrease in customer traffic, partially offset by an increase in average customer check.

(1) Primarily to-go, delivery and catering sales.

IHOP's off-premise sales for the three and six months ended June 28, 2026 increased by $3.8 million and $7.1 million, respectively, as compared to the respective prior year periods primarily due to the brand's focus on delivery promotions.

Applebee's system domestic same-restaurant sales decreased 1.8% for the three months ended June 28, 2026 as compared to the prior year quarter due to a decrease in traffic partially offset by an increase in average check. Applebee's system domestic same-restaurant sales remained flat for the six months ended June 28, 2026 as compared to the respective prior year period. This was the result of an increase in average check offset by a decrease in traffic.

Based on data from Black Box, Applebee's domestic same-restaurant sales for the three and six months ended June 28, 2026 underperformed the casual dining category (excluding Applebee's). Black Box reported the casual dining category experienced a same-restaurant sales increase for the three and six months ended June 28, 2026 driven by an increase in average check, partially offset by a decrease in customer traffic.

(1) Primarily to-go, delivery and catering sales.

Applebee's off-premise sales for the three and six months ended June 28, 2026 increased $1.5 million and $7.3 million, respectively, as compared to the respective prior year periods primarily due to delivery and digital promotions.

Quarterly Domestic Same-Restaurant Sales - Fuzzy's

Fuzzy's system domestic same-restaurant sales increased 4.6% and 3.6% for the three and six months ended June 28, 2026, respectively, as compared to the respective prior year periods. The increase was primarily due to growth in average check resulting from menu price increases, partially offset by a decrease in traffic.

Segment Results

For the three months ended June 28, 2026 our total franchise segment profit decreased $2.1 million as compared to the prior year quarter.

Franchise revenues decreased as a result of the following:

• IHOP franchise revenue decreased $0.9 million primarily due to a decrease in fees related to franchisee terminations and a decrease in proprietary product sales, partially offset by a 1.5% increase in franchise domestic same-restaurant sales. The decrease in franchise termination fees was primarily due to fewer franchisee restaurant closures as compared to the prior year quarter. The decrease in proprietary product sales was primarily due to changes to product offerings.
• Applebee's franchise revenue decreased $4.7 million primarily due to a decrease in franchise termination fees, a decrease in the number of franchise restaurants, and a decrease in same restaurant sales change. The decrease in franchise termination fees was due to fewer closures in the current year quarter. The decrease in the number of franchise restaurants was the result of the acquisition of 12 Applebee's restaurants in February 2026, 48 Applebee's restaurants in June 2026, and closures.
• Fuzzy's franchise revenue decreased $0.6 million primarily due to a decrease in royalty revenues as a result of a decrease in the number of franchise restaurants and a decrease in forfeited development fees.
• Advertising revenue decreased $1.6 million due to a 1.8% decrease in Applebee's domestic same-restaurant sales and a decrease in the number of Applebee's and Fuzzy's franchise restaurants, partially offset by a 1.5% increase in IHOP domestic same-restaurant sales.

Franchise expenses decreased as a result of the following:

• IHOP franchise expenses decreased $0.7 million primarily due to a decrease in the cost of proprietary product sales and a decrease in bad debt expense as compared to the respective prior year quarter.
• Applebee's franchise expenses decreased $3.3 million primarily due to expenses incurred in the prior year quarter related to transaction costs of refranchising restaurants and bad debt expense.
• Advertising expenses decreased $1.6 million given the decrease in advertising revenue.

For the six months ended June 28, 2026 our total franchise segment profit decreased $4.4 million as compared to the prior year period of 2025.

Franchise revenues decreased as a result of the following:

• IHOP franchise revenue decreased $2.6 million primarily due to a decrease in franchisee termination fees and proprietary product sales, partially offset by an increase in the number of franchise restaurants. The decrease in franchise termination fees was the result of fewer franchisee restaurant closures as compared to the prior year period. The decrease in proprietary product sales was primarily due to changes to product offerings.
• Applebee's franchise revenue decreased $4.8 million primarily due to a decrease in the number of franchise restaurants and a decrease in franchisee terminations fees. The decrease in the number of franchise restaurants was primarily due to the acquisition of 12 Applebee's restaurants in May 2025, 12 Applebee's restaurants in February 2026 and 48 Applebee's restaurants in June 2026. The decrease in franchise termination fees was primarily due to fewer franchisee restaurant closures as compared to the prior year period.
• Fuzzy's franchise revenue decreased $0.7 million primarily due to a decrease in royalty revenues and proprietary product sales as a result of a decrease in the number of franchise restaurants, partially offset by a 3.6% increase in Fuzzy's domestic same-restaurant sales.
• Advertising revenue decreased $1.0 million due to a decrease in the number of Applebee's and Fuzzy's franchise restaurants, partially offset by an increase in the number of IHOP franchise restaurants and a 0.8% increase in IHOP domestic same-restaurant sales.

Franchise expenses decreased as a result of the following:

• IHOP franchise expenses increased $0.2 million primarily due to an increase in bad debt expense, partially offset by a decrease in the cost of proprietary product sales.
• Applebee’s franchise expenses decreased $3.8 million primarily due to a decrease in bad debt expense as compared to the prior year period.
• Advertising expenses decreased $1.0 million given the decrease in advertising revenue.

The Company acquired 12 Applebee's restaurants from a franchisee in February 2026 and 48 Applebee's restaurants from a franchisee in June 2026. As of June 28, 2026, the Company owned 136 restaurants, which includes seven dual-branded restaurants, compared to 70 restaurants as of June 29, 2025. The change in company-owned restaurant revenue and expenses for the three and six months ended June 28, 2026 is primarily driven by the increase in the number and timing of restaurants acquired since the second quarter of 2025. Company-owned restaurant segment loss for the three and six months ended June 28, 2026 was primarily due to costs of transitioning the restaurants, including closures from remodeling activities.

Rental revenues for the three and six months ended June 28, 2026 decreased as compared to the prior year periods, primarily due to closures. Rental expenses for the three and six months ended June 28, 2026 decreased as compared with the same prior year period primarily due to lease terminations.

Non-Segment Items

Total general and administrative expenses for the three months ended June 28, 2026 increased $4.8 million, primarily due to higher employee-related costs associated with the expansion of company-owned restaurants and dual-brand operations, increased reorganization costs, and higher professional services from the acquisition of 48 Applebee's restaurants in June 2026.

Total general and administrative expenses for the six months ended June 28, 2026 increased $6.6 million, primarily due to higher employee-related costs associated with the expansion of company-owned restaurants and dual-brand operations, increased year to date incentive compensation due to an increase in the number of employees and higher expectations for the remainder of the year as compared to the prior year, and higher long-term incentive compensation expense driven by an increase in the Company's share price.

Interest expense, net, increased $4.2 million and $8.3 million for the three and six months ended June 28, 2026, respectively, primarily due to the refinancing of our 2025 Class A-2 Notes at a higher interest rate and an increased principal in June 2025, and a decrease of interest income resulting from reduced cash balances.

For the three and six months ended June 28, 2026 and June 29, 2025, we recorded closure charges primarily related to properties for which we are the lessee but have ceased using in prior periods.

For the three and six months ended June 28, 2026, we recorded a $3.2 million trademark impairment charge related to the strategic realignment of the international market. For the six months ended June 29, 2025, other asset impairment charges were primarily related to the impairment of an asset upon closure of certain IHOP restaurants in March 2025.

Amortization of intangible assets primarily relates to Applebee's and Fuzzy's franchise rights and the Fuzzy's tradename. Amortization increased $1.2 million and $2.2 million for the three and six months ended June 28, 2026, respectively, compared to the prior periods due to the reclassification of certain indefinite-lived intangible assets to finite-lived in the fourth quarter of fiscal 2025. In addition, in the current year, the useful lives of certain finite-lived intangible assets were reduced.

The gain on disposition of assets for the three months ended June 28, 2026 is related to the gain on lease terminations. The gain on disposition of assets for the six months ended June 28, 2026 primarily relates to the sale of land and building on which two IHOP properties were located.

The effective tax rate for the three months ended June 28, 2026 was higher than the rate of the prior year quarter primarily due to higher non-deductible executive compensation partially offset by increased income tax credits.

The effective tax rate for the six months ended June 28, 2026 was lower than the rate of the prior year period primarily due to a higher tax deduction related to stock-based compensation resulting from an increase in our share price.

Liquidity and Capital Resources of the Company

Our total cash balances including restricted cash, net of revolving credit facility borrowings, at June 28, 2026 and December 28, 2025 were as follows:

Cash Flows

In summary, our cash flows for the six months ended June 28, 2026 and June 29, 2025 were as follows:

Operating Activities

Net cash provided by operating activities decreased $33.2 million during the six months ended June 28, 2026 compared to the same period of the prior year. The decrease was primarily driven by timing of marketing spend, higher payments related to performance-based compensation and interest, in addition to lower segment profit.

Investing Activities

Net cash used in investing activities was $9.0 million for the six months ended June 28, 2026 compared to net cash used of $5.1 million during the comparable prior period. The increase in cash used was primarily attributable to capital expenditures for the remodeling of company-owned restaurants, partially offset by the net cash acquired from the acquisition of restaurants from franchisees, principal collections on notes and equipment receivables and proceeds from the sale of two properties.

Financing Activities

Net cash used in financing activities increased $6.5 million for the six months ended June 28, 2026. The increase in cash used in financing activities was primarily due to $29.3 million in common stock repurchases, partially offset by a decrease in dividends paid and the debt issuance cost.

Long-Term Debt

In addition to the below, see Note 7 — Long-Term Debt, of the Notes to Condensed Consolidated Financial Statements, for additional detail on long-term debt, including key provisions potentially impacting liquidity.

On February 16, 2023, our Company's Board of Directors authorized a debt repurchase program of up to $100 million. Repurchases of the Company's debt, if any, are expected to reduce future cash interest payments, as well as future amounts due at maturity or upon redemption. Under the authorization, the Company may make repurchases of the Company's debt from time to time in the open market or in privately negotiated transactions upon such terms and at such prices as management may determine.

Make-whole Premiums

We may voluntarily repay the Class A-2 Notes at any time; however, if repaid prior to certain dates we would be required to pay make-whole premiums. As of June 28, 2026, the make-whole premium associated with voluntary prepayment of the 2023 Class A-2 Notes was approximately $7.1 million and for the 2025 Class A-2 Notes was approximately $22.8 million. We also would be subject to a make-whole premium in the event of a mandatory prepayment required following certain rapid amortization events or certain asset dispositions.

Capital Allocation

Dividends

During the six months ended June 28, 2026 and June 29, 2025, we declared and paid dividends on common stock as shown in Note 8 - Stockholders' Deficit, of the Notes to the Condensed Consolidated Financial Statements. On May 14, 2026, our Board of Directors declared a second quarter 2026 cash dividend of $0.19 per share of common stock, payable on July 10, 2026 to the stockholders of record as of the close of business on June 24, 2026.

Share Repurchases

On May 14, 2026, the Company's Board of Directors authorized a share repurchase program of up to $100 million (the "2026 Repurchase Program") in addition to the Corporation’s existing share repurchase program, approved in February 2022 (together with the 2026 Repurchase Program, the "Repurchase Programs"). A summary of shares repurchased under the Repurchase Programs, during the six months ended June 28, 2026 and cumulatively, is as follows:

From time to time, we also repurchase shares owned and tendered by employees to satisfy tax withholding obligations on the vesting of restricted stock awards. Shares are deemed purchased at the closing price of our common stock on the vesting date. See Part II, Item 2 of this Form 10-Q for detail of this stock repurchase activity during the six months ended June 28, 2026.

Adjusted Free Cash Flow

We define "adjusted free cash flow" for a given period as cash provided by operating activities, plus receipts from notes and equipment contract receivables, less additions to property and equipment. Management uses this liquidity measure in its periodic assessments of, among other things, the amount of cash dividends per share of common stock and the amount of repurchases of common stock. We believe it is important for investors to have the same measure used by management for that purpose. Adjusted free cash flow does not represent residual cash flow available for discretionary purposes.

Adjusted free cash flow is a non-GAAP measure. This non-GAAP measure is not defined in the same manner by all companies and may not be comparable to other similarly titled measures of other companies. Non-GAAP measures should be considered in addition to, and not as a substitute for, the U.S. GAAP information contained within our financial statements. Reconciliation of the cash provided by operating activities to adjusted free cash flow is as follows:

The decrease in adjusted free cash flow for the six months ended June 28, 2026 compared to the same period of 2025 was primarily due to the increase in additions to property and equipment and the decrease in cash provided by operating activities as discussed above. Additionally, we continue to provide remodel and development incentives to our franchisees which also had a negative impact on adjusted free cash flow for the period.

Contractual Obligations and Commitments

There were no material changes to the contractual obligations as disclosed in our Annual Report on Form 10-K for the year ended December 28, 2025.

Critical Accounting Estimates

A discussion of our critical accounting policies and estimates and the related assumptions used in their application is included in Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the year ended December 28, 2025.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

There were no material changes from the information contained in the Company’s Annual Report on Form 10-K for the year ended December 28, 2025.

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the period covered by this report. Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures are effective at the reasonable assurance level.

Changes in Internal Control Over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Part II. OTHER INFORMATION

Item 1. Legal Proceedings.

We are subject to various lawsuits, administrative proceedings, audits and claims arising in the ordinary course of business. Some of these lawsuits purport to be class actions and/or seek substantial damages. We are required to record an accrual for litigation loss contingencies that are both probable and reasonably estimable. Legal fees and expenses associated with the defense of all of our litigation are expensed as such fees and expenses are incurred. Management regularly assesses our insurance deductibles, analyzes litigation information with our attorneys and evaluates our loss experience in connection with pending legal proceedings. While we do not presently believe that any of the legal proceedings to which we are currently a party will ultimately have a material adverse impact on us, there can be no assurance that we will prevail in all the proceedings we are party to, or that we will not incur material losses from them.

Item 1A. Risk Factors.

There are no material changes from the risk factors set forth under Item 1A of Part I of the Company’s Annual Report on Form 10-K for the fiscal year ended December 28, 2025.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Purchases of Equity Securities by the Company

(a) These amounts are shares owned and tendered by employees to satisfy tax withholding obligations arising upon the vesting of restricted stock awards. The shares tendered by holders are repurchased by us pursuant to the terms of the plan under which the shares were issued and the applicable individual award agreements and not pursuant to publicly announced repurchase authorizations.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not Applicable.

Item 5. Other Information.

Securities Trading Plans of Directors and Executive Officers

During the fiscal quarter ended June 28, 2026, none of our directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted, modified, or terminated a Rule 10b5-1 trading plan or a non-Rule 10b5-1 trading arrangement for our securities (as defined in Item 408(c) of Regulation S-K).

Item 6. Exhibits.

• Filed herewith.

** The certifications attached as Exhibits 32.1 and 32.2 accompany this Quarterly Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

*** Pursuant to Rule 406T of Regulation S-T, the interactive data files on Exhibit 101 and 104 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Section 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

† A contract, compensatory plan or arrangement in which directors or executive officers are eligible to participate.