Growth vs. Optimization: A Q2 2025 Analysis of First Watch, Denny's, & Dine Brands

Improved Visitation Trends Across American Cuisine Chains

First Watch, Denny's, IHOP, and Applebee's improved their visitation metrics in Q2 2025 relative to Q1 2025. 

First Watch increased its total visits by 13.7% year-over-year, fueled both by its ongoing expansion and by a notable 4.1% increase in average visits per location, signaling significant room for continued growth. 

In contrast to First Watch's expansion, Denny's has been closing stores. Its smaller footprint led to a 4.9% dip in overall visits, but its remaining restaurants became significantly busier, with average visits per location up 5.1% year-over-year – suggesting that loyal customers are consolidating at its remaining stores

Meanwhile, Dine brands IHOP and Applebee's also improved their visitation trends. IHOP narrowed its overall visits and average visits per location declines while Applebee's turned its traffic dips into gains in Q2, with overall visits up 2.7% YoY and average visits per venue up 5.5% – perhaps thanks to Dine's marketing efforts around the brand. 

Overall, the strong Q2 performance of these four chains highlights the resilience of the value-driven casual dining sector – and may indicate that consumers may be 'trading down' from more expensive restaurants while still seeking a sit-down experience.

How Does Visitor Income Impact Chain Loyalty? 

While First Watch caters to a wealthier clientele (with median HHI of $88.7K compared to the nationwide baseline of $79.6K), it's the chains’ serving of lower-income areas – Applebee's, Denny's, and IHOP – that attract a higher share of frequent monthly visitors. This suggests that loyalty is not dictated by disposable income; instead, brands that offer reliability and affordability can become a go-to option for their customers, driving high visit frequency even in times of macroeconomic uncertainty.

Multiple Paths to Casual Dining Success

The strong Q2 performance of these chains highlights the casual dining sector's resilience and reveals two distinct paths to success in today's economy. While First Watch thrives on aggressive expansion into higher-income areas, brands like Denny's and Applebee's prove that cultivating deep loyalty among a value-conscious base through affordability and optimization is an equally powerful and sustainable strategy.

For more data-driven dining insights, visit placer.ai/anchor.