Good morning and welcome to Dine Brands First Quarter Conference Call. I'm joined by Richard Dhal, Chairman of the Board; Steve Joyce, CEO; Tom Song, CFO; Jay Johns, President of IHOP; and John Cywinski, President of Applebee's. Before I turn the call over to Richard for opening remarks, please remember our Safe Harbor regarding forward-looking information. During the call, management may discuss information that is forward-looking and involves known and unknown risks, uncertainties and other factors which may cause the actual results to differ than those expressed or implied. Please evaluate the forward-looking information and the context of these factors which are detailed in today's press release and 10-Q filing. The forward-looking statements are as of today and it seems no obligations to update or supplement these statements. You may also refer to certain non-GAAP financial measures which are described in our press release and also available on Dine’s website. With that, I’ll turn the call over to Richard.

Thank you, Ken. Good morning. I hope you and your families are doing well. I wish to take a moment in this call to give my thoughts. Clearly, the primary focus of company for management and the board is the crisis brought on by the coronavirus pandemic. The wellbeing of our guests, employees, franchisees, and investors is of utmost importance and concern. I wish to assure you that the board and management are working ever so closely to ensure that everyone's expertise is brought to this war. The board is constantly addressed of the ever changing situation and is participating in all the major decision making. I know you have read our earnings announcement. We have made some very tough decisions and the board is completely supportive of these actions. We appreciate and respect the strength, we can do attitude of our team members, our franchisees and our vendors knowing that together we will succeed. I'm very proud to be a part of this company and this team. I thank them and all of you for your support. Now, I'll turn the call over to Steve.

Thank you, Richard. Good morning and thank you for joining us today. Before we begin, I would like to say that I hope everyone participating on the call is safe and doing well and your families. These are truly unprecedented times. The country and our industry as we know it has changed drastically. The physical distancing measures and government mandates requiring restaurants to close diners only allowing all premise to go and delivery has had a significant impact on our industry as a whole. During the unceasing challenges we faced this past month, I have been tremendously proud of the resiliency, focus and commitment of our teams, our franchisees, and the thousands of restaurant team members across the country and the communities in which we serve. Each who have stepped up to work tirelessly on behalf of our company and brands during these trying times. I've truly seen the best of our people. Our Board of Directors is actively engaged with me and the management team and is confident that we have the leadership, resources and agility to manage through these various scenarios with a steady hand and a clear path. Our response to the impact of the coronavirus is ongoing. Dine’s, cross functional crisis team has been fully engaged with the authorities at all levels to obtain timely information, which has enabled us to maintain business continuity and make informed and crucial decisions related to operations across the organization, as well as our company operated restaurants. The health and safety of our team members and guests remains our number one priority. We have been monitoring the virus around the clock, making up-to-the minute decisions on how best to stay safe in our work and in our restaurants while also keeping critical operations running. To our franchisees, I'm pleased to…

Thank you, Steve. Good morning everyone, and thank you for participating today. I hope that you're all doing well. Our industry is certainly in uncharted territory. I'll begin by discussing how we respond to the pandemic and the steps we've taken to reinforce for financial flexibility. Last month, we drew down a total of $220 million from our revolving financing facility or variable funding note, which was issued as part of a securitization we completed in 2019. While we didn't have an immediate need for additional cash, this action was taken as a precautionary measure given the uncertainty caused by COVID-19. In doing so, we shored up our balance sheet. At the end of the first quarter of 2020, we had $395 million of cash with $345 million being unrestricted. I'd like to highlight that this includes cash held related to IHOP advertising funds and the company's gift card programs. Given our solid cash position, minimal CapEx requirements and asset-light business model, we believe, we have strong liquidity to manage our brands and operations through the crises. Regarding our quarterly cash needs. The company estimates its cash, general and administrative expenses to be approximately $35 million per quarter. The company has $16.4 million of quarterly interest payments under securitization and VFN drawdown that I just mentioned. These projections exclude gross lease exposure of approximately $1.3 million per quarter on franchise restaurants that are currently closed and being monitored. Our cash G&A forecast represents a one-third reduction of controllable cost assigned for the remainder of the year. In addition, we have reduced the capital expenditures by $1.5 million to approximately $6 million for the remainder of the year. Covering the securitization, we're currently paying interest-only and the quarterly principle payments with only the mandatory our leverage ratio goes above [5.25] times.…

Thanks, Tom, and hello everyone. My objective here today is to share as much detail as possible as to the current state of the Applebee's business. For context let's start with Q1 performance before the crisis emerged. As outlined in the release, Applebee's had tremendous momentum prior to the various government restrictions placed upon restaurants. Comp sales results through the week ending March 8 were positive 3.2% rolling on positive 1.4% from the same time frame a year ago. In total, Applebee's posted 10 consecutive weeks of positive comp sales to start a year, and meaningfully outperformed the casual dine-in category before the downturn began the week ending March 15. This downturn along with local dine-in restrictions let franchisees to quickly shift to the off-premise business model we have today and given the uncertainty at the time, franchisees temporarily closed 251 of our 1,657 domestic restaurants in mid-March. Now, the good news here is, the number of temporarily closed restaurants is getting smaller with each passing day, as franchisees reopened their off-premise operations. At present, approximately 175 domestic locations remain closed and we expect that number to become even smaller over the next 10 days. In total, we have about 1,492 Applebee's restaurants open for off-premise business and we anticipate all of these restaurants as well as most of our temporarily-closed restaurants to reopen their dining rooms once the local municipalities provide a green light. Now I'd like to share our comp sales in detail. From the point in time the crisis emerged, through this past week. After being up 3.2% year-to-date from March 8, we progressed from minus 15.8% the week ending March 15 to minus 76.0% the week ending March 22, to minus 80.6% the week ending March 29, with this representing our lowest point of demand since…

Thank you, John. Good morning everyone. I hope you're all doing well and staying safe during these tough times. IHOP’s first quarter performance was significantly impacted by the effects of COVID-19 and mandated restrictions on restaurant operations as other restaurant companies have also disclosed. IHOP’s comp sales declined 14.7% in the first quarter is traffic fell sharply in March, doing parts restrictions on dine-in service, statewide mandates for our guests to stay home and separate restaurant closures. Since the beginning of the second quarter, we started to see consistent improvement in April's weekly sales. For the week ending April 5, sales were down at 81.5%. By the week ending, April 26, sales were down 75.4% improvement of 600 basis points. As the restrictions on dine-in service and statewide mandates were implemented, we were able to pivot quickly. I want to recognize and thank the countless team members, franchisees and the restaurant teams who continue to work tirelessly to adapt to this ever changing landscape. The brand remain nimble and shifted to an off-premise only model over just a few weeks, based on state by state implementations of stay-at-home protocols. Additionally, to meet convenience needs of our guests in the support safe distancing practices and ultimately due our part to help flatten the curve, we rapidly developed curbside pickup in over 1000 domestic restaurants. This new option for guests is performing very well. And we're pleased with the results. In fact curbside pickup doubled to 6.3% as a percentage of total off-premise sales for the week ending April 5 compared to the prior week to continue to see the progressive growth increasing to 7.2% of off-premise sales the week of April 12, and 8% for the week ending April 19. Most of our domestic restaurants remain open and operate under this…

Thanks Jay. To close these are difficult times unprecedented. I strongly believe though that Dine's fundamentals remain strong. We will continue to execute against our strategy and manage the business with a long-term view. In doing so, I have full confidence, we will get through this together. Now we'd be pleased to open the call for any questions you may have. Operator?

Thank you. [Operator Instructions] Our first question is from Jake Bartlett with SunTrust. Please go ahead, Jake.

My first one is on the health of the franchisees and two parts to that. I think it's one of the more in the biggest unknown that investors are facing is to really be concerned. So one question is, could you give us any insight as to the level of leverage within the franchise system? Any kind of broad indication would be helpful. And then the second part of that question is, you mentioned that franchisees are generally able to cover their variable costs at these levels, but could you give, including fixed costs at the restaurant level, what sales level or what sales decrease from normal is breakeven at the unit level including variable and fixed costs?

Yes, so obviously leverage levels are shifting. However, having said that, what I've asked Tom to do is kind of give you some insight into four wall profitability and how we look at that at various revenue levels. So Tom, do you want to walk you through there.

Yes normally across those brands our restaurants to about 6,000 to 7,000 in sales per day. Again, there's a lot of variability but that tends to be kind of the average between the two brands. So what we notice is that an extreme stress level around $700 per day, we noticed that a lot of restaurants will make it work – it is worthwhile for them to keep the doors open for off-premise with a skeleton crew. But having said that, what we're now seeing is more in the neighborhood of $2,000 to $3,000 of sales per day. And what that starts to do is on the lower end of that spectrum, it starts to cover variable costs and rent at the higher end of the spectrum that starts to cover variable costs and more of fixed costs. And so that $3,000 per day level equates to about 1.1 million of AUV for the year. And if you listen to kind of our view or franchisee financial health that is a substance level that on the lower end supports an open restaurant.

Got it. That's really helpful. And then I had a question really about the difference between the performance of IHOP and Applebee's? IHOP had a fairly robust off-premise businesses as well, kind of going into this but the performance has been sales had fallen more and then there hasn't been as much of an increase, since the kind of the trust. Maybe if you could just discuss some of the reasons for that and whether it's just particularly, exposure to breakfast or anything else that's going on that we should be aware of?

Yes, so I'm going to ask Jay to fill this in. Obviously pre-crisis, Applebee's, we started earlier on bringing the Carside To-Go back had a lift up over where IHOP was. IHOP’s business though has been growing rapidly and has seen really great growth through this crisis. Jay, want to talk a little bit in detail?

Yes, I think that, we've seen great results on growth of this initially patterns very similar to what John saw from a trajectory standpoint. We initially went way down but then immediately started gaining week after week consistently for weeks. As we implemented protocols in all the restaurants we rolled out curbside without much marketing, really just local marketing and email clubs and things like that to get people to know about it. And as they experience, obviously it's more amount that starting to happen and people are learning about it. So we're growing rapidly and we're real pleased with the trajectory, I think a couple of things to remember when you compare the two brands is Applebee’s has a much longer runway of how long they've been doing off-premise and carsides for decade practically. And just in the last two or three years when we've really started ramping up on the IHOP side. So I think there's a little bit of an advantage from that. And I do think to your point about breakfast, we feel that probably is a difference in what the guests are using the meals for their. They're not working there at offices, they're staying at home. So sometimes that stopping on the way to work, to get breakfast, et cetera, that meal is now gone. It's a very easy meal for parents that are busy working at home watching the kids to give them cereal or toaster pastries, et cetera. So it's an easy meal to replace yourself if you're doing your own cooking now. So that probably has a little bit of impact, a home meal replacement if you're only going to order half, one time a day, the places that are doing dinner replacements, look like they're winning more than some of the other. So, I think there's a little bit of all of that right now, that's probably causing the difference between the two brands.

Thank you. [Operator Instructions]. Our next question is from Nick Setyan with Wedbush.

Thank you, and thank you for all the detail you guys provided today. One clarification that the comp calculation will that include the closures? And then the question is, as these stores open up, both IHOP and Applebee's, how are you thinking about in-dining sort of incremental margins? Do we see, maybe cash flows turn a little bit more negative as you staff up again before the sales come up or come back. What percentage of sales, given the capacity constraints early on? Can we think about sort of breakeven within the dining room as oppose to sort of the difference between dining room and then the off-premise only model? Are we seeing issues kind of hiring labor or do you have any sort of the benefits versus wage rates that everyone is been talking about in the background? Can you just address some of those things that would be very much appreciated. Thank you.

Yes. So, let me lead off and then why don't you talk a little bit about, where we think profitability goes. So, first of all, our approach is pretty uniform across both brands and across not only the restaurants we operate, but once our franchisees operate. And so, the way that, we're seeing the path forward is one in which we're reopening restaurants and literally we've got restaurants open for two days. And so – but the interesting thing is people came in and ate in the restaurant and had drinks and ate pancakes. And so, we're obviously not going to share numbers because they wouldn't mean anything at this point. But, I can tell you that, team members were happy to be back. There was a lot of people there were glad to be back at work I think. And so, I think over time the way we're going to do it and we're sure this is a franchise is going to the same thing, they are going to add staff. Now, there's a certain number that you need to open a restaurant. So that there's a limited fix. But remember, we're on with a lot of managers because we kept a lot of the managers around. So, they'll be doing what normally would be considered some hourly work. And so, there will be a combination of that. And the goal is to add staff back as you have the revenues to support it. And so, what we don't know because we've just started is, how many people are interested in coming into restaurants at this point where it's allowed by the municipality and what's that number look like? Clearly, our hope is that, we remain at elevated off-premise levels and that begins to be added to incrementally with…

Let me ask you the question on enclosures, if the restaurant was closed for the duration of the week, then obviously, it's not included in cost. But another way to think about it is, if restaurant had sales during the week, either in the prior period, or this period, does this include in the console, in this type of changing environment, as you've had some closures that happen as we're reporting these comps, I think it's a little bit more conservative the way we did it. We didn't exclude those restaurants. And so, hopefully that answers your question on closures. The second question on the incremental margins. I think Steve went through it pretty thoroughly, but another way to think about is, as pointing at that the way these restaurants are staffed currently it is a bit heavier on the managers. And so that is a lot of your fixed costs. So when you bring back staff, and again, we're still in the early phases of bringing that staff, that staff is for the most part highly variable as this food costs.

And Nick, this is John, I just very specifically, keep in mind, Steve said, two days of data here, but in Georgia and Tennessee, what color sample sizes, best 60-ish restaurants, all our dine-in business during those two days versus the week prior is incremental. So it differently our off-premise businesses take a hit, when we opened up our dining rooms. And our team members, perhaps surprising and very enthusiastic about coming back having not had any issues whatsoever on that front.

So one other thoughts -- your question about bringing employees back. Our employees were not laid off. They were furloughed. And so in the case where a lot of these folks, they have a lot of our franchisees have longtime tenured employees. And in general, we think lower turnover than in the industry. And so a lot of these organizations have been prolonged for a long time. Clearly, the programs are out there to help people will change some of the employment picture. And we will have to see whether or not as business levels build whether or not we have challenges bringing folks back. Our expectation is -- and it's obviously top of conversation, but our expectation is, we think we're going to be able to add people back as we need to based on those revenues levels. And that, there's a significant amount of our folks that we think want to come back to work. And so we'll see how that plays out. But actually, I think that clearly is something were monitoring. But our sense is that we will over time gradually build back to a higher -- obviously a higher level of reinforcement all the folks. And but I think our general sense is that we will be able to add those folks as we need them based on revenue levels.

Thank you. Our next question is from Brian Vaccaro with Raymond James.

I wanted to just circle back to your earlier comments on daily sales volumes, sort of necessarily covered the variable and fixed costs. And my phone was glitching. So I apologize, but I think you said the upper end of the sort of 2000 to 3000 a day range. And my question is, does that materially differ between the two brands? And I guess, I asked it in the context of current sales volumes. I think some quick back of the envelope math would suggest current sales volumes that I offer in the low one Applebee's is sort of in the low twos. And just trying to understand what type of sales improvement you need to see from current levels to stabilize store level EBITDA at the franchise level.

So I was speaking to both brands, Brian. And you just got to keep in mind, huge variability when it comes to sales results. And so what I'm trying to speak to is the average in the system. We're seeing some good evidence that in particular on Applebee's side. There folks are able to get the higher end of that range as you noted on IHOP side, you're starting out with lower sales volumes to start with anyway. So, but we feel pretty good that, the best indicator of sustainability is an open restaurant and we're trying to encourage and help our franchisees obviously keep as many restaurants open as possible.

Okay. And I guess switching gears a little bit to the franchisee relief that the company provided. I understand it the fluid dynamics, but could you drill down a little further on say what percentage of franchisees may have received relief, whether it be royalty relief, the ad fund or rent relief on the IHOP side. And maybe as part of that, just to make sure everyone's on the same page. Tom, could you review any differences in booked revenue versus cash collections that occurred in Q1? Or what you might expect in the coming months until business conditions normalize.

So let me take the first part of that. I think it's fair to say when it's all said and done and we're still working through this with the franchisees, but when it's all said and done, most of the franchisees are going to get some level of relief from us through deferral of, as Tom mentioned in a lot of cases it would be obviously royalties and ad fund, but then other fees as well, so, I think, we have looked at a 60 day deferral, and then a payback period to come subsequent to that with a little bit of grace in there. And so, we're still working through that with documenting it and pulling it all together as a program. But in general, I think when it's all said done, most of the franchisees are going to be part of that program and that's the assistance we've provided them today. And we'll look at, as that goes through, where franchisees are. And then as we've done in the past, we'll work with individual companies to see what needs, what if anything needs to be done to help assist them reopening their restaurants. It's interesting when we talk to the franchisees though and we are doing it daily. There's a fair amount of, we're going to get through this with the franchisees. They're not, you're not hearing a lot of gloom and doom from our core group of folks. And they are positioning themselves for reopening. They're preparing to get back to normalized levels at some point. Both employment and revenues and so they're actually looking forward to things kind of coming back. And so, I think there's a lot of obviously uncertainty still remaining, as how long last and what's consumer sentiment about dining and restaurants and…

Hey, Brian, you wanted more details on the franchise relief program we've offered?

I'm sorry, what was that Tom?

You wanted more details on the franchise relief program we offered?

Yes. And just was there any deferral of royalties in the first quarter? I mean, looking at the financials, thinking about books versus cash collections and if you could walk us through some of the more meaningful

Yes. So, really it started in March because that's when the impact really hit our franchisees. And so, the way to think about it is some portion of March between the two brands is subject to deferral. April is subject to deferral and just again, there's differences in payment timings between the two brands and so one has subject royalties and fees that are offset a little bit by couple of weeks. And so, for the most part, it is March and April. And in the deferral period it is fairly substantial with the payments spread out over an extended period of time. When we benchmarked this Brian against other franchise owners and the restaurant industry, we found that to be one of the best programs being offered. And so, we realized that, the impact to our franchisees was greater due to the dining restrictions. And so, we wanted to get out there with a good program to start with.

Thank you. Our next question is come from Jeffrey Bernstein with Barclays.

I have two questions. Just one, as I think about specifically the Applebee's system and the comps we're seeing and I appreciate the week-to-week color. It looks like the recovery while it has progressed. It seems like it might be slower than peers. I'm just wondering as you think about Applebee’s is most recently comp down 65% or so. I know there was some peers that comping down 40% or 50%, and therefore perhaps it progressed a little more quickly. I'm wondering if there's any differences between brands or differences between initiatives that you guys have pushed versus peers or perhaps you're being more conservative in terms of what you're offering. Just trying to get your feel for the pace of the recovery and whether you think the stimulus or tax refund benefit to accomplish significant or was more modest. And then I have one followup.

Sure. So let me start then ask Jay and Johns comment individually. So, I think in general, we're looking at our peer groups. I would say that, we would highlight the difference between of some of their performance and ours based on marketing spend. So, they stayed on the airwaves longer than we did. As we looked at whether or not we felt that the spending would justify the incremental revenue, our sense was we're better off waiting and then having strong campaigns as people are coming back and the restaurants open. So that, so our sense is, yes, we might have some individual competitor brands that are doing somewhat better than us, but as we're kind of thinking that's going to be eradicated as we go forward and begin to market again to folks. And I think, we're quite pleased with the growth of what we've gotten off-premise and our hope is that we hold that that level of business and add to it on a highly incremental basis, the restaurant business, in restaurant business back. So John or Jay, thoughts?

Sure. Steve. I think just Steve hit the primary point, the difference in strategy during this highest, the 18, the administration went off air and discontinued on marketing. I think that's the primary point. Number two, a couple of those brands you're referencing public company, predominantly company owned start with a higher percentage off-premise mix to begin with. So when you're looking at kind of off-premise sales versus year ago full sales, you'll see a delta there start with a larger base, if you will. And then a couple of those brands are very heavily run on delivery and then aggressively marketing and offering free delivery throughout this crisis. So I think those will be probably three variables that would specifically address the question you're asking.

I think, I have sides, very similar to something in both settings. We immediately did two weeks, we pulled our regular campaign, we were doing it, we nearly went to two weeks of off-premise campaign knowing that we were newer to the off-premise game or some of the other people we were competing against. So we wanted to see that message. So we did that for a couple of weeks and then we shutdown all the rest of the marketing outside of just some basic local marketing to save our money for later for relaunch. So very similar tactic.

Yes. And I think the other things that as we entered into the crisis. The thing that's really disappointing is Applebee's was having an amazing quarter. IHOP is doing just fine and Applebee's was just blowing on and it felt like great, now we're on the formula, like we said, we were going to we're back, actually guess what we're going to do. And here we go another 18. And that work really ring our to about St. Patty Day and then kind of the air come out of the tire. So we're actually hoping that when we get back into this and that they're -- we're obviously hoping that consumers get comfortable coming into restaurants more quickly than that. Now I've seen a dozen prognostications, none of which match anything. So we're not going to get into speculating, because that's all it is, at this point. But let me tell you something, we were having a hell of a quarter. So it's just a shame that this happened when it did and I think that gives us confidence going forward that when we reopen, if we just keep doing what we're supposed to be doing, we'll do just fine. It's a very aligned the Applebee's franchise group right now is very aligned. And I look these calls we have one of the benefits is the restaurant that just opened in Georgia and Tennessee. We were on a two hour call yesterday and those geographies that open up next will be on a call on Friday going into the weekend. We're sharing best practices and nuanced detail around what to expect one time guest pulls out at the lot. And so collaboration across these 30 or so franchise group, and the same can be said for IHOP is tremendous.

And to clarify, Tom, I know you were asked earlier about the stores that are closed. And obviously constantly distorted if you're factoring in a large number of stores comment down 100% presumably, but just to clarify, put your comment was that if a store is closed for the week, it's excluded from the comp base, is that right?

No. So if it's close for the entire week, it is excluded. But if it did record sales for the week is included for those days.

As an example that Easter week, 850 Applebee’s restaurants closed on that day that's in the comp number. And so far larger number that was in the comp number a year ago. And that's why that's a tought.

It's a good question to ask. All the folks that were you get a good apples to apples comparison of how they're treating their comps.

Yep. And the other question was just, Tom, I'm just wondering in terms of sensitivity. As we are still early in calendar 2020. Can you give a frame of reference in terms of annual benefits, earnings or contribution earnings from how are you look at it, whether it's a point of comp or from a margin perspective? Just trying as we think about modeling out 2020 and 2021, a sensitivity or a framework as your comps do recover over coming months and quarters? Thanks.

I think it's still a little too early to say in general use. For comps, you can still use our prior guidelines. But for -- with respect to guidance as I mentioned before, we're sticking to cost guidance for now.

Our sense, I know, it's frustrating. But our sense is, there's so many variables that could impact the recovery. That we're going to have to make so many assumptions even that it becomes sort of a speculative exercise. And I don't think that provides value. I think, if you have a view as to how the recovery occurs, I think what you should assume is our guidance would be we would run versus our competition and versus previous, based on the variables that you think is going to happen. If you think the customer is going to come rushing back, and we're going to have full restaurants in the fall, which would be great by the way. Then our numbers would be very different. If you think it's a gradual slow build in the '21 before you kind of get to back to relatively normalized levels. And I'm sure you have just as I've seen. I've seen all of those as forecasts. So, the idea of trying to thread the needle with 15 different assumptions, all of which are too early to really have insight to. We get -- we just don't think adds a lot of value.

Thank you. Our next question is from Brett Levy with MKM Partners.

Great, thank you. I appreciate all of the color throughout the release in the call. And I hope everyone out there is doing well. If I could just ask a little bit of risk. I guess taking Jake’s question from a different perspective, and also just how you're thinking about when it's appropriate to spend at the corporate level and just the incremental costs that the franchisees are seeing. If you think of it this way, you've obviously talked about some deferrals and easing the pressure right now as sales are slowing. But you're also going to get to a point where there could be more off-premise impacting margins. There's going to be more incremental costs. There's a lot there's a potential for incremental costs on the labor front for the restaurants as they try to marry sales and the algorithm. How are you thinking about additional aid or relief or reduce stress for your franchisees as they start to see these incremental costs hitting their P&L after going through a period where they face challenges? And then I'll ask the question of corporate.

So on a gross picture, we think we've provided the assistance to the franchisees that's required at this point. And we have no plans to do anything else. Obviously, as we've done in the past, we're work with individual franchisees if there's specific situations that we can help them that make sense. Then we will obviously continue to do that. Tom do you wants tell a little bit about the cost picture picture from a variable.

The second part of your question, Brett, was on the corporate side. And so, we've laid out what our cash quarterly cash G&A represented actually quite the reductions. We would like right now we're focused on supporting the franchisees with for example, technology initiatives related to off-premise. And as, we see a better sign of the trajectory of the reopenings and we're going to continue to bring back, not only are furloughed staff as we find that demand, but also we'll be ramping back up some of our corporate investments. But for now the numbers I cited are the run rate that we plan on.

But let's be clear, the ramp up of those costs and bringing back for team members will be measure it with the revenues that we're generating and collect. So there is not an expectation that we've got a big upfront spend that we've got to do, that we’ll create the revenues. So our sense is to balance between good cost management and working what we've got. We've got a strong framework of teammates still on board. They're able to help with a lot of what needs to be done to reopen the restaurants. We'll obviously as we reopen more, we'll bring more staff back, but we're going to do it in a way that we think matches revenue with costs. And so we're not expecting to see a big spike in costs without revenues and collections offsetting that.

Well, thank you. And if I could just ask one more question about the franchise community, have you gotten a sense that there could be some movement within the structure are there franchisees looking to get out of a system for franchisees not being able to stay head above what are after this? And how would you think about that, either bringing them back into the fold like you did with Applebee’s system or other consolidation within the system or from outside the system?

Well, so clearly our goal is to retain as many of our restaurants as we possibly can. This obviously has the potential to create some change. We have all of that at our disposal and we will continue to do that. We have the ability to bring those restaurants in house. We have the ability to bring in new ownership for those restaurants. And so at this point, we're carefully working with all the franchisees. We're monitoring carefully where they are from a liquidity standpoint and in matching with their cost structures in their debt. And so, the good news is we've been doing this for quite some time, so we're actually in a good place with our franchisees about working and sharing data back and forth so that we can help. And in some cases it'll be assistance on an individual basis to serve the franchisees. In some cases, it may mean us taking over, in some cases, it may mean us facilitating restaurants, going to new ownership. Obviously we expect some pickup in that over the next several months. We don't really have at this point, the ability to say, “Oh Yeah”, we're going to retain 99% of the restaurants and we're going to be able to add some more. The one thing that's clear is that this could also create some opportunity, because there are some things on the positive side that we haven't talked about and that's the inventory for our categories is going to decline. How much, I've seen lots of guesses, but we'll see. So, there would be less competition. That's a good thing. The ability to pick up on some conversions may pick up, and so we've got, it's too early for us to see net-net what we end up with in terms of overall inventory if we tried to look towards middle of next year. But, we'll get more knowledge and more awareness of where we are and what's available and what can we save and what won't and what does that do to our net restaurant ads for the year, that's all kind of going to play out I think over the next six months, and we'll see how that, we'll be able to give you a much better, clearer picture I think probably as we get into the fall.

And couple of points there, just to add on Brett. This is John. Our franchisees, this is good, they acted very quickly, I'm talking right on March 15 to preserve cash. So, they took actions and committed furloughs those decided to temporarily close, closed almost immediately. As I mentioned, we were at about 250 temp closures. We're at 175 today. That number is rapidly declining and every time I talk to our franchisees, they intend to reopen the ones that are temporarily closed and they're anxious to do so.

Great. All the best to you and all your families and the rest of the Dine family. Thanks for the help in the call.

So, thank you again for your time. Obviously, its just unprecedented set of events that we're facing. However, I will tell you that, I've been proud of the team and the way that they're operating, our franchisees and what they're doing, not only to preserve their businesses and their jobs for their team members, but also what they're doing in the community sheet. Their stories are overwhelming sometimes, when you hear this. So it's one of these things, I've been in this business almost 40 years. I've never seen anything like it. But I've been through a number of things that had some of these characteristics and we always came out the other end and that's our expectation. So, I hope everybody stays safe and we'll look forward to talking to you in the future, when we've got a lot more insight into where things are going. Thanks.

And with that ladies and gentlemen, we conclude today's program. Thank you for participating. You may now disconnect.