Grubhub announced today it has expanded its partnership with Dine Brands, parent company of Applebee’s and IHOP, to over 3,000 U.S. locations across those two restaurants.
Delivery via Grubhub will be available at more than 1,700 Applebee’s locations and 1,300 IHOP locations in the U.S. And while the deal is officially with Dine Brands, Applebee’s and IHOP franchisees who use Grubhub as their preferred delivery provider will get access to more marketing opportunities and better analytics.
According to the press release, Dine Brands and Grubhub are also “working towards” a direct-to-POS integration for these restaurants, which means orders from Grubhub go directly to Applebee’s and IHOP POS systems — an increasingly common practice for national chains striking delivery deals with major third-party services. Grubhub, who acquired digital ordering platform LevelUp in 2018 to assist with such integrations, already has similar deals in place with chains like Taco Bell and Shake Shack. Other third-party delivery services offer POS integrations as well. DoorDash, for example, recently inked an exclusive deal with Chili’s that includes direct-to-POS integration.
Speaking of DoorDash: The Dine Brands-Grubhub deal comes just a couple weeks after Applebee’s announced a nationwide partnership with DoorDash.
The overlap itself isn’t a huge deal — most restaurants these days find it necessary to offer more than one third-party delivery service to attract the widest customer base possible. But Applebee’s is practically synonymous with suburbia, and no one does the ‘burbs like DoorDash. Grubhub, meanwhile, has long ruled New York City and has less of a presence in the nation’s strip malls.
Until now, it seems. As third-party delivery comes under increasing scrutiny, including questions around these companies’ profitability, being King of the Big Apple is no longer enough. Grubhub lost the number one spot in terms of market share to DoorDash earlier this year, and with the latter possibly IPO’ing as early as Q4, consolidation in the third-party delivery world seems imminent. To stay competitive with DoorDash, Grubhub will have to follow its rival out of the urban enclaves and strike more large-scale deals with major chains serving the rest of the country.