Julia Stewart, chief executive of Glendale’s DineEquity, has said the sky is the limit for her IHOP and Applebee’s brands.

And now she’s getting them much closer to the sky.

DineEquity opened its first airport IHOP outpost Oct. 1 inside the main atrium of the busiest airport in the world, Atlanta’s Hartsfield-Jackson International.

The opening is the first part of a push for DineEquity to open restaurants in what it calls nontraditional venues – such as airports, casinos, college campuses and military bases.

Stewart declined to give a specific number of how many of these locations she plans to open in coming years, but did say DineEquity was bidding on a location inside Chicago’s O’Hare International Airport.

The expansion comes in response to what she said was demand from both consumers and franchisees. When she realized that she had the manpower and strategy to expand, she jumped at the chance.

“We’ve had interest from many people,” Stewart said. “There was clearly an interest from the franchising community. It was a perfect storm with the timing and sequence.”

Terry Harps, president of Global Concessions Inc., an Atlanta franchisee that has the license for a dozen restaurants at Hartsfield-Jackson, said he had been waiting for the opportunity to add a well-known breakfast eatery.

“I felt there was a need for a true breakfast concept, when you think about it that way, what do you think other than IHOP?” Harps said. “This is an international airport. It’s always breakfast somewhere.”

At Atlanta, IHOP would be exposed to a large slice of the 70,000 airport employees and 90 million travelers who pass through each year. Because of its location outside the security zone, it can reach even more guests.

DineEquity, which consists of mostly franchised locations, also has moved to open its Applebee’s brand in airports, starting with Richmond International Airport in Virginia.

Darren Tristano, an executive vice president with Chicago research group Technomic Inc., said the airport strategy makes sense for DineEquity, which has been slumping recently.

The company reported net income of $16.9 million (87 cents per diluted share) for the second quarter ended June 30, up 6 percent from $15.9 million (88 cents) compared with the same period a year earlier. Revenue for the restaurant franchisor fell 31 percent to $158 million, but that was partly because sales of restaurants to franchisees in the prior quarter boosted revenue.

“It represents a strong opportunity of growth for a brand many travelers recognize,” Tristano said. “Other brands like Ruby’s have done well. Airports are the next place to open restaurants.”

With their high volume of foot traffic and captive audiences, airports, university campuses and casinos boast coveted real estate and the promise of healthy cash flow. But at the same time, they can be a double challenge for a franchisor to break into: The franchisees who own the rights to these limited spaces have any number of brands tapping them on the shoulder.

Perhaps because of that, IHOP charges franchisees in nontraditional venues an initial licensing fee of about $25,000 for a regular-size 5,000-square-foot restaurant, much less than the typical $40,000-$50,000 fee. (However, IHOPs in nontraditional spaces might be the smaller 3,000-square-foot IHOP Express eateries. The licensing fee for an Express would be about $15,000 in an airport.)

Susan Schooley, a founding principal of airport concession consulting firm SI Partners Inc. in La Quinta, said there could be other reasons for lower licensing fees at nontraditional venues.

“At an airport, you’re working out of an already built shelf space,” she said. “The airport build could be a little cheaper.”

Nontraditional

Of course, opening in nontraditional venues such as airports means nontraditional IHOP menus.

The IHOP inside the Atlanta airport is a 24-hour IHOP Express. It features a grab-and-go section for rushed travelers as well as the more traditional sit-down service. The limited menu has many of the classic items – pancakes, waffles, omelets – but also travel-friendly food such as smoothies.

And the Atlanta location, unlike most IHOPs, has a liquor license.

“It’s something that I wanted to have,” Harps said about the license. “Here in the airport, 75 percent are connecting passengers, they may have had a long day. The kids may want pancakes, but the parents might want a beer or wine.”

The airport location is designed to appeal to both the weary and rushed fliers that pass through. But setting up shop in an airport also means having a different business plan. There’s more foot traffic going in and out, the logistics of food delivery are different and the price point is more expensive.

“It’s different than opening up in the middle of suburbia,” Stewart said.

As a result, DineEquity will look for franchisees, like Harps, who have experience operating in airports. Stewart said she is also open to selling to franchisees who want to learn how to operate in such venues.

The effort in opening in nontraditional venues is part of a broader strategy to expand IHOP’s brand, she said. With the Atlanta location, DineEquity has a chance to showcase its business to foreign travelers.

“It creates interest in our international business,” she said. “It’s like the licensing business. It’s not about ubiquity, it’s about extending the brand’s cachet where it’s appropriate and makes good sense.”

Stewart said the goal is finding ways to bring her brands to the customers, whether opening more restaurants in nontraditional venues or even offering IHOP on airplanes.

“The sky’s really the limit,” she said with a laugh.