DineEquity to sell 33 Applebee's Neighborhood Grill & Bar and IHOP Restaurants to American Franchise Capital for approximately US$26M; locations primarily in Missouri and Indiana, transaction expected to close in Q3

Nevin Barich

Nevin Barich

May 29, 2012 – Business Wire

GLENDALE, California , May 29, 2012 (press release) – DineEquity, Inc. (NYSE:DIN), the parent company of Applebee's Neighborhood Grill & Bar and IHOP Restaurants, today announced that it has entered into an asset purchase agreement with American Franchise Capital, LLC for the sale of 33 Applebee's company-operated restaurants located primarily in Missouri and Indiana. The agreement does not contain financing contingencies, but closing is subject to regulatory processes related to liquor license transfers and other customary closing conditions.

The transaction is expected to result in net proceeds after taxes of approximately $26 million and reduce DineEquity's sale-leaseback related financing obligations by approximately $22 million. The Company expects to pay approximately $5 million related to the settlement of net working capital liabilities and deal costs. Additionally, the sale of these Applebee's company-operated restaurants will result in approximately $1.3 million in annualized general and administrative savings. The Company anticipates closing the transaction in the third quarter of 2012.

“We are pleased to announce the sale of 33 Applebee’s company-operated restaurants, reflecting yet another significant step in our strategy to transition to a 99% franchised restaurant system,” said Julia A. Stewart, Chairman and Chief Executive Officer of DineEquity, Inc. “American Franchise Capital is a great franchise partner with deep operating experience.”

William J. Georgas, a Managing Partner with American Franchise Capital and a previous Applebee’s franchisee with The Georgas Group, said, “We are excited about this iconic brand’s future and look forward to participating in the revitalization of Applebee's in a meaningful way. This transaction represents the long-term continued confidence we have in the brand and the establishment of a solid partnership.” Mr. Georgas was previously the co-managing owner of The Georgas Group, a restaurant franchise company which included 47 Applebee’s restaurants.

To date, DineEquity has sold a total of 342 Applebee's company-operated restaurants since its acquisition of Applebee's International in November 2007. DineEquity currently has two transactions, which it anticipates will close in the third quarter of 2012. Upon consummation of the pending sales of 33 additional Applebee's company-operated restaurants, as detailed in this news release, and the 39 Applebee's company-operated restaurants in Virginia detailed in DineEquity’s May 1st news release, 97% of DineEquity's restaurants will be franchised. The Company believes that its increasingly franchised business model is less capital intensive and experiences less volatility in cash flow performance compared to the operation of company-operated restaurants.

American Franchise Capital, LLC was formed by William Georgas and Trevor Ganshaw for the purpose of acquiring high-end restaurant franchises in the U.S. and Canada. Mr. Georgas is an industry veteran with over 20 years of operating experience in the restaurant franchise business. Mr. Ganshaw has over 20 years of experience in the banking and investment management industries. This is American Franchise Capital’s first acquisition of Applebee's company-operated restaurants. American Franchise Capital’s offices are located in Greenwich, Connecticut.

The Company will update its 2012 financial performance guidance upon closing of this transaction.

About DineEquity, Inc.

Based in Glendale, California, DineEquity, Inc., through its subsidiaries, franchises and operates restaurants under the Applebee’s Neighborhood Grill & Bar and IHOP brands. With more than 3,500 restaurants combined in 18 countries, over 400 franchisees and approximately 200,000 team members (including franchisee- and company-operated restaurant employees), we believe DineEquity is one of the largest full-service restaurant companies in the world. For more information on DineEquity, visit the Company's Web site located at www.dineequity.com.

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