Dine Brands (DIN) 2018 10-K analysis

I have been long on Dine Brands (DIN) since August 2017 when the stock was below $40. It is now at $99 and I wanted to check how things were going, and decide if I should take my money out and go to another stock or buy more.

I decided to take a close loo at the recently released 10-K. It turned out that I couldn’t find it on the investors website, and I was surprised of that, but it is always relatively easy to find 10-K anyways.

I like reading 10-Ks, because first they are quite an easy read compared with all the finance documents around here, and they show the fundamentals of the company, abstracting out the day to day valuation of the stock.

DIN is a franchise stock in the food industry. They own Applebee’s and IHOP brands. They also operate some of the Applebee’s restaurants.

In numbers, there are 1768 Applebee’s and 1831 IHOP franchised restaurants, and 69 Applebee’s restaurants that are operated by the company.

Then, we are given some details about the operation: the franchise fees, what amount should be spent in advertising, some “territory” rules in some states between franchises, and the supply chain to provide some context. It seems sound to me that franchises need to spend some of their revenues on local advertising, but that might be an industry practice.

I am biased, but I tend to skip over the risk factors and try to get my own idea of the risks.