Applebee’s Franchise Cost, Profit & Failure Rate 2024

Applebee’s is famous for its original riblets. It is a Neighborhood Grill and Bar.

If you are looking for an Applebee’s franchise, you are at the right place; here, we will give you all information you must know before opening an Applebee’s Franchise. So let’s begin.

Applebee's Franchise

About The Applebee’s

Applebee’s combines simple, crave-able American cooking, classic beverages, and local brews to create a lively casual dining experience.

The local business owners operate all Applebee’s restaurants and commit to providing exceptional food and drinks while providing honest, neighborly service.

Applebee’s History

Applebee’s is a lot younger company than many of its competitors, but it has evolved into a big American institution in its brief history.

In Decatur, Georgia, Bill and T.J. Palmer opened their first restaurant in 1980.

With Bill as President, their company grew swiftly, and he developed the franchising plan, which was released shortly after.

He’s currently a franchisee with over 35 locations across the United States.

IHOP Corp, which owns the IHOP restaurant chain, purchased Applebee’s for a stunning $1.9 billion in 2007.

Shortly after, it announced that it would begin franchising Applebee’s 500 company-owned restaurants in the United States.

Applebee’s Franchise Model

Cost Or FeesAmount
Initial Investment$2,009,038-$8,267,250
Initial Franchise Fee$35,000  
Royalty Fee4% initially, 5% possible after  
Area Requirement3,800 to 4,700 square feet
Total Outlets1700

Why Did You Choose Applebee’s Franchise?

Since its founding in 1980, Applebee’s franchise has amassed vast experience and a track record of effective operation and constant expansion.

The brand is well-known and well-liked. Franchises offers are available in a wide range of areas.

Applebee’s is a famous brand that offers significant training and assistance and a well-developed domestic and worldwide marketing and promotional effort for franchisees.

Applebee appeals to a large portion of the population. Its menu appeals to various tastes, including customizable meals, children’s menus, seasonal dishes, etc.

Applebee’s Franchise Revenue & Profit

The revenue and profit of Applebee’s franchise owners can vary depending on their location, store size, labor cost, and other similar factors.

However, as per the performance of 588 franchise outlets in 2021 and 2022, we estimate that an Applebee franchise owner makes anywhere between $1,450,170 and $2,025,765 in annual revenue on average.

And with a profit margin of 17%, we estimate that they make $344,380 in profits per year on average. This is how we calculated this amount:

Financial OverviewPercentage of RevenueAmount ($)
Individual Franchise Annual Revenue100%2025765.00
Franchise Royalty Fees5.19%(105086.56)
Cost of Goods Sold (COGS)25.94%(525432.80)
Labor (Variable)13.49%(273225.05)
Total (Expenses)83.00%(1681384.95)
Net Profit17.00%344380.05

Note: The displayed expenses are estimates based on industry averages and standard costs. Actual expenses may vary due to factors like location, business size, and market conditions. We recommend conducting detailed research or consulting with a financial advisor for a tailored financial analysis.

Applebee’s Franchise Training & Support

In-store,task-oriented training is part of the management field training program. This training will take about 12 weeks to complete.

The franchisor provides an essential restaurant management and operations program for directors of operations, general managers, kitchen managers, and other restaurant managers.

The franchisor conducts an introductory training session for non-management restaurant staff before the restaurant opens and around one week after the business opens.

Payback Period Of Applebee’s Franchise

With an investment of $8,267,250 and an estimated 17% profit on the average net sales from 2020, the yearly profit would be $344,380.

So, to find out how long it will take to earn back the initial investment:

Payback Period = Investment / Yearly Profit = $8,267,250 / $344,380 = 24.38 years

Based on these figures, it will take approximately 25 years to pay back the initial investment for Applebee. This time period could be longer or shorter depending on your sales, revenue, and profit figures.

Applebee’s Failure Rate

Franchised Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change

For the Franchised outlets:

  • In 2017, the failure rate was (77)/1,863×100≈4.13%
  • In 2018, the failure rate was (158)/1,786×100≈8.85%
  • In 2019, the failure rate was (28)/1,628×100≈1.72%

Company-Owned Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change

For the Company-Owned outlets:

  • In 2017, the failure rate was (0)/0×100≈0.00%
  • In 2018, the growth rate was (69)/0×100≈ can’t be divided by zero
  • In 2019, the failure rate was (0)/69×100≈0.00%

Total Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change

For Total outlets:

  • In 2017, the failure rate was (77)/1,863×100≈4.13%
  • In 2018, the failure rate was (89)/1,786×100≈4.98%
  • In 2019, the failure rate was (28)/1,697×100≈1.65%

According to the above-mentioned data, we can see that the franchised outlets for Applebee declined from 2017 to 2019, showing a failure rate between 4.13% and 1.72%.

On the other hand, for company-owned outlets, the failure rate of Applebee was 0.00%. The number of outlets at the end of the year grew from 0 to 69.

Overall, when we combine the data of franchise and company-owned outlets, we can see that the Applebee franchise has declined in the years 2017-2019, showing a total failure rate between 4.13% and 1.65%.

Applebee’s Restrictions & Obligations

Applebee's Restrictions & Obligations

The franchisor does not demand that the franchisees personally supervise the restaurant. Franchisees must hire a Director of Operations or a similar position.

The Director of Operations must give their complete attention and efforts to the on-premise restaurant.

One of the Principal Shareholders can be the Director of Operations if the franchisor agrees.

In this situation, the candidate must have adequate restaurant experience to be considered. Franchisees are also obliged to hire a General Manager and a Kitchen Manager.

Applebee’s Franchise Agreement Term & Renewal

The franchise arrangement is for a period of 20 years. If the franchisee is in good standing, the franchise can be renewed up to four times for a total of five years.

A charge equal to 10% of the franchise fee must be paid during renewal.

Opportunities abound for entrepreneurs in restaurant franchising, including brands like Philly Pretzel Factory, Firehouse Subs Franchise, Qdoba Mexican Eats Franchise, Salata Franchise and Cracker-Barrel franchise.

Applebee’s Comparison

Founded In19801969
Initial Investment$2,009,038-$8,267,250$2,000,0000-$3,000,000
Franchise-Fee$35,000  $40,000
Total Outlet17006,500
Annual Revenue$2.4 Million$1.9 Billion

Frequently Asked Questions 

Does Applebee's give any financial assistance?

No, they do not provide any such help.

Who is the founder of Applebee's chain?

Bill and T.J. Palmer founded the Applebee’s chain.

Applebee's is owned by which corporation?

Applebees is owned by Dine Brands Global Inc., a publicly-traded food and beverage corporation based in Glendale, California.

Is Applebee's a franchise?

Yes, Applebee’s is franchised by subsidiaries of Dine Brand Global.

How much does an Applebee's franchise cost?

The franchise fee for Applebee’s is $2,009,038-$8,267,250, and their cost of investment starts at $35,000.

Where is Applebee headquartered?

Applebee’s is heaquartered in Glendale, California.

How many locations does Applebee has?

As of 2024, Applebee has 1,678  restaurants worldwide from which 109 are operating in the international market.

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