Applebee's

The franchise fee is $35,000 flat — modest for a casual dining brand of this scale. But the total investment range of $2.94M to $4.68M is where Applebee's gets serious. The 'Celebration Prototype' building alone costs $1.25M to $1.72M in construction, plus $118K–$162K in site work and $97K–$134K in professional services. Furniture, fixtures, equipment and signage add another $835K to $923K. Working capital for the first three months runs $405K to $450K, which is high relative to median revenue and reflects the difficulty of the early months in casual dining.

The liquor license line item deserves special attention: the FDD lists $500 to $1,000,000 — a one-million-dollar spread. Applebee's is an alcohol-dependent brand (bar sales are a core profit driver), and getting a liquor license in competitive markets like Manhattan or Chicago can cost $400K+ and take 18 months. This isn't a footnote — it's a potential deal-breaker that should be researched before signing anything.

Ongoing fees are relatively reasonable: 4% royalty plus 4.25% ad fund equals 8.25% of gross sales, which is below the QSR average. Technology fees are $2,500 one-time plus annual charges. The renewal fee is $3,500 and transfer is $2,500 — both low, suggesting Applebee's knows the resale market for its locations is thin.

Applebee's does disclose Item 19 data based on 1,443 franchised restaurants. Average annual gross revenue is $2,760,000; median is $2,640,000. That's a healthy average unit volume for casual dining — comparable to Denny's ($1.9M) and well above Hardee's ($1.3M), though below McDonald's ($4.6M).

The problem is the math between revenue and investment. At median revenue of $2.64M and an 8.25% fee burden, you're paying $217,800 per year to Applebee's before any other costs. A typical casual dining operator runs food costs at 28–32% of sales and labor at 30–35%, leaving perhaps 8–12% operating margin before occupancy. On $2.64M, that's $211K–$317K before debt service on a $3M+ investment. Payback is 11+ years at the midpoint — and that assumes your location performs at median.

There's no breakdown of top vs. bottom quartile in the extraction, but with 82 closures in 2024 against zero new openings, underperforming locations are clearly being culled. Survivors are skewing the revenue average upward.

This is the most important data point for prospective Applebee's buyers: the system has lost 165 units in three years, going from 1,575 in 2022 to 1,510 in 2024. In 2024 specifically, zero new restaurants opened while 82 closed. That's a net contraction rate of 2.3% — and the closures-to-openings ratio of infinity is the starkest in this comparison set.

The 62 transfers in the same period suggest many closures followed failed attempts to sell rather than outright shutdowns. Applebee's has been investing in brand refreshes and digital ordering, but the unit count tells the real story: large-format casual dining with $3M+ buildouts is struggling to justify new development in most markets.

For comparison, McDonald's added 102 net units in 2024 on a larger base. Denny's lost 73 units but at least opened some new locations. Applebee's opened none. If the trend continues, the advertising fund gets divided among fewer and fewer locations, and the brand's national media presence weakens. Franchisee candidates should ask directly: what's the development pipeline look like, and why did zero locations open in 2024?

The liquor license variable is the wildcard in every Applebee's deal. The FDD investment table shows $500 to $1,000,000 for licensing — and in many states, liquor licenses are quota-controlled, non-transferable, and tied to the physical location. If you're building in a market where licenses are scarce or expensive, your real investment could be $500K–$1M higher than the table suggests. Buyers must research their specific municipality before signing.

Applebee's parent company, Dine Brands, also owns IHOP and has been under pressure from private equity ownership. Corporate priorities can shift — territory protections, approved supplier lists, and required renovation cycles all sit at the franchisor's discretion. The FDD's renewal fee of $3,500 sounds low, but renewal requires meeting current brand standards, which may include costly remodels. Buyers should ask what renovation requirements accompanied recent renewals.

The declining system creates a secondary problem: resale value. When a brand is contracting rather than growing, the pool of buyers for your restaurant shrinks. The 62 transfers in 2024 at unknown prices may reflect sellers taking significant haircuts to exit. Before investing $3M+, model your exit: who buys this restaurant from you in 10 years, and at what price?