One of the initiatives that IHOP's management plans to put into place is increasing the number of Applebee's stores operated by franchisees. Applebee's currently operates 508 corporate-owned units, and IHOP executives would like to see that number reduced to less than 5% of the total restaurant count.

"We are strong believers in the pure franchiser model," said Julia Stewart, IHOP's chairwoman and chief executive officer, during a conference call announcing the deal, which is set to close in the fourth quarter. Going forward, Stewart's team looks to sell 40 restaurants per quarter, resulting in $550 million that will be used to pay down debt. The company is also looking at the sale-leaseback of all Applebee's real estate within 12 months, resulting in proceeds of $400 million that will also be used to pay down debt.

Stewart, who was president of Applebee's in the 1990s, says she expects to have current Applebee's franchisees, new restaurant owners and possibly IHOP franchisees take part in restaurant acquisitions. Currently 99% of all IHOP restaurants are franchisee operated.