Cover Society: IHOP’s Julia Stewart’s Stretch Goals

Julia Stewart works to keep IHOP’s turnaround spirit alive.

By Mary Boltz Chapman, Editor-in-Chief -- Chain Leader, 9/1/2007

IHOP Chairman and CEO Julia Stewart has been lauded for bringing the almost 50-year-old family-dining chain back to life. But what happens next? Stewart, who appeared on Chain Leader’s cover in April 1999, when she was president of Applebee’s, discussed maintaining franchisee relationships, improving customer service and more in an interview with Chain Leader.

How do you nurture the franchisee relationship?

Boy, very carefully. And I do think at the core of that, the most important piece is communication. So it is constantly interacting and talking to the franchisees, making certain they understand your vision, they understand where you want to take the brand, they’re supportive, there’s collaboration, there’s buy-in—I think that’s an ongoing process. I don’t think you ever stop that. They’re doing a lot of the heavy lifting. We’re certainly doing the strategic part, but they’re doing the execution day in and day out. So it’s making sure they feel comfortable.

Do they sometimes do that "what have you done for me lately?"

Oh, I think there’s always—and I actually kind of like the challenge. I find it more intellectually stimulating to have people say to you, "What are you doing for me today? You know, that was yesterday, this is today. What are you doing?"

And I think it’s—and I’m sure it sounds corny—but there’s an honor and a privilege to say they’re taking their hard-earned money, in many cases a great deal of money, and investing it in you, management, to say, "OK, we believe in you. We believe in what you’re going to do next. You know, we’ll go with you."

When you did your 2007 guidance, you said that there was some work on operations, specifically service. What does that look like?

Well I think one of the things that came out—we’re always talking to the guests, and one of the things we asked the guests last year was, tell us what would make you come more often. And they talked about relevancy and advertising. But when you really dig deep, some consumers have said to us, "I would come more often if your service wasn’t just efficient, it was more hospitable."

Now that’s a bit of an interpretation from our consumer insights group, but really what that says is, we have an opportunity to make our service better and to exceed guests’ expectations both at IHOP and within the category. Some of what we’re reading into is recognizing people don’t expect a lot from family dining, and we’re going to exceed those expectations with the work we’re doing in service as good as our pancakes.

In family dining, is growth a market-share game, or is it a building-average-checks game?

I would argue for us to continue to grow and expand, it’s not just competing in family dining, it is looking at the independents and what I call the edges. And the edges is fast food and fast casual and casual dining.

I would argue that the lines have blurred. In the old days we used to talk about competing within your category. I don’t think that’s good enough anymore. I think there’s a lot of crossover on the edges. It’s not just family dining anymore. That was the easy part. That was really much easier for us. Now it’s thinking about how to keep our brand relevant to the consumers and all those different dayparts and crossover work.

VIDEO: Watch Chain Leader's exclusive video interview with Julia Stewart.