IHOP shares rise on sale of land parcels

The company said it will garner about $347 million in proceeds from the sale and will use the money to pay down debt.

J.P. Morgan analyst Steven Rees said the sale of the properties will help the company move forward on its plans to turn many Applebee's company-owned restaurants into franchise-operated ones.

"We believe the completion of the transaction will be viewed as a positive as the company can now focus solely on its refranchising efforts and Applebee's brand turnaround," Rees said.

The agreement allow IHOP to assign and transfer lease obligations to franchisees once the company-operated restaurants are sold.

By moving to a more franchised business model, IHOP would be more insulated from costs for labor and food. The company has said it plans to refranchise 475 Applebee's company-owned restaurants over the next three years.

IHOP completed its $1.9 billion purchase of Applebee's in November.

IHOP shares rose 98 cents, or 2 percent, to $51.28, after peaking at $53.50 earlier in the day.