Applebee’s Franchise Costs, Fees & Owner Salary (2023)

INVESTMENT

$2,428,000

-

$7,084,000

LOCATIONS

1542

Emily

Updated

April 11, 2024

Is

Applebee’s

a franchise?

Yes,
Applebee’s
currently
accepts
franchise
applications

Applebee's, recognized as the world's largest casual dining chain, began its journey in 1980 and started franchising just three years later in 1983. The brand, which is a subsidiary of Dine Brands Global, Inc. (formerly known as DineEquity, Inc.), operates under the trade name "Applebee’s Neighborhood Grill & Bar." With its headquarters located in Pasadena, California, Applebee's has grown its network serving a wide variety of food and alcoholic beverages in a sit-down, table-service setting.

The franchise is known for its comprehensive training program, which includes a management and operations program catering to various managerial positions within the restaurant. This program covers a broad spectrum of restaurant functions and is designed to ensure that franchisees and their staff are well-equipped to meet the high standards set by Applebee's brand. The training is performance-based and task-oriented, ensuring practical learning and application in the restaurant setting.

Applebee's offers its franchisees the opportunity to operate in a non-exclusive territory, meaning they might face competition from other franchisees or company-owned outlets. The franchise agreement's length can vary up to 20 years, with no specific provisions for renewal outlined. This structure provides a solid framework for franchisees to operate within, ensuring consistency and quality across all Applebee's restaurants.

As the largest casual dining chain globally, Applebee's boasts an impressive annual sales figure, underscoring the brand's popularity and the potential for profitability within its franchise network. The comprehensive support and training offered to franchisees, coupled with the brand's strong market presence, make Applebee's a notable option for individuals looking to invest in the casual dining sector.

How many

Applebee’s

franchises

are there?

In 2022, there were
1542
outlets in
the United
States, of which
1542
are franchises, and
0
are corporate-owned.

What are the

Applebee’s

franchise

fees?

Advertising fee

4.25%

Initial Franchise Fee ($35,000)

The initial franchise fee for a standard Franchise Agreement with Applebee's is $35,000. This fee is payable upon the execution of the Franchise Agreement.

Royalty Fee (4% of Gross Sales)

Franchisees are required to pay a continuing royalty fee of 4% of the Gross Sales of the Restaurant for each specified period.

Advertising Fee

  • National Advertising Fund (4.25% of Gross Sales): Franchisees are required to contribute 4.25% of Gross Sales towards the National Advertising Fund. This fee is payable monthly on or before the 12th day of the next month.
  • Local Advertising (Not specified): There is currently no required local advertising fee through December 31, 2023.

Transfer Fee ($2,500 per Restaurant)

This fee is payable when you transfer ownership of your Restaurant(s).

Renewal of Franchise Agreement (10% of the initial franchise fee at the time of renewal, currently $3,500)

This fee is payable on expiration of the Franchise Agreement after its initial 20-year term.

Site Development ($150-$450)

Required demographics package ($150 per site); Site Processing Fee ($300 per site).

Note: The fees presented here can be found in the Item 5 of the Franchise Disclosure Document. For a complete list of all the fees borne by the franchisee, please consult the Franchise Disclosure Document.

How much does

it cost

to start a

Applebee’s

franchise?

It costs between
$2,428,000
and
$7,084,000
to start a
Applebee’s
franchise.

The total estimated initial investment required ranges from $2,013,688 to $11,521,696. The table below provides a detailed breakdown of the various costs associated with this investment:

Type of Expenditure Amount
Initial Organizational and Training Expenses $75,000 - $120,000
Purchase of Land $300,000 - $3,000,000
Building Costs $556,000 - $4,000,000
Site Work $50,000 - $1,000,000
Professional Services $30,000 - $211,000
Permits/Fees $1,500 - $75,000
Furniture, Fixtures, Equipment and Signage $410,000 - $825,000
POS System $20,000 - $45,000
Kitchen Display System $12,000 - $18,000
Smallwares $25,000 - $50,000
Initial Inventory $25,500 - $47,300
Pre-Opening Expenses $55,000 - $350,000
Franchise Fees and Deposits $35,000 - $10,000
Initial Advertising Expense $5,000 - $40,000
Liquor License(s) $500 - $1,000,000
Online Ordering, EMV Services, Wi-Fi Services, Equipment $56 - $45,000
Digital Products, CRM, Gateway Processing, Waitlist, Others $150 - $100,000
ROSnet, ShiftOne, To Go Accuracy Printer, Campaign/Menu Training, Extra Manuals $200 - $655,000
TOTAL $2,013,688 - $11,521,696

Note: The table above provides a snapshot of the main costs associated with starting the most common franchise format (as disclosed in the Item 7 of the Franchise Disclosure Document). For a complete overview of all the expenses involved with the various formats offered by the franchisor, please consult the Franchise Disclosure Document.

Does

Applebee’s

provide

training

to its

franchisees?

Yes,
Applebee’s
provides
training

Applebee's has a structured training program to ensure that franchisees are well-prepared to operate their restaurants effectively. Here's a breakdown of the training process:

Before opening a restaurant, the General Manager, Kitchen Manager, and each Assistant Manager are required to attend the Franchisor’s operations training facility for a period deemed necessary by the Franchisor, and must successfully complete the course to the Franchisor's reasonable satisfaction.

This training includes on-the-job training in one of the Restaurants, ensuring that the franchisee or the operator is well-versed with the operational requirements of running an Applebee's Restaurant.

For new franchisees without existing Restaurants, Applebee's provides up to eight training personnel for approximately eight days before and six days after the opening of the first Restaurant to train the Restaurant employees in the operation of the kitchen, To Go, bar, and dining room areas.

If more than eight training personnel or a training period beyond 14 days is required, the franchisee will be responsible for the excess cost and expenses.

Does

Applebee’s

provides

territory

protection?

Franchisees will not receive an exclusive territory. They may face competition from other franchisees, from outlets that Applebee's owns, or from other channels of distribution or competitive brands that Applebee's controls.

Under the terms of the Development Agreement, franchisees are granted the right to develop one or more Restaurants within a specified territory, referred to as the "Territory", during one or more "initial development periods."

This right will continue during any subsequent development periods if it is determined that additional Restaurants should be constructed to fully develop the Territory. However, Non-Traditional Venues will be excluded from your Territory and may be developed by Applebee's or a third party without any participation by or payment to the franchisee.

Can a

Applebee’s

franchise

be run as

a passive

investment?

Applebee's does not require franchisees to personally supervise their franchised Restaurants. However, franchisees must employ a Leader of Operations (or an individual with equivalent or greater responsibility and authority) to devote full-time efforts to the Restaurants in their Territory.

This Leader of Operations can be one of the individual Principal Shareholders, provided they have sufficient Restaurant experience and are approved by Applebee's. If overseeing multiple brands, the Leader of Operations will be subject to Applebee's approval.

Each restaurant must have a designated employee to supervise the Restaurant and the Restaurant kitchen, dedicating full time, best efforts, and constant personal attention to the day-to-day operations. These roles are termed as the General Manager and Kitchen Manager, respectively.

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