IHOP Considers Options for Franchisee Loans

IHOP Inc., owner of the International House of Pancakes restaurant chain, said it hired Salomon Smith Barney Inc. to explore options and consider a major shareholder’s suggestion to securitize some receivables.

Southeastern Asset Management Inc., IHOP’s largest shareholder, said in a Securities and Exchange Commission filing in May that the company should sell or refinance $287 million of loans made to franchisees. This would free IHOP to focus on the International House of Pancakes operations, Southeastern said.

Of the 965 IHOP restaurants, 774 are operated by franchisees, 121 by area licensees and 70 by the company.

Shares of the Glendale-based company fell 28 cents to $28.02 on the NYSE.