Applebee's Neighborhood Grill & Bar Franchise Cost, Revenue & Review 2026
Data from FDD filing
Analysis by FranchiseVerdict Research · Methodology
Applebee's is a casual-dining franchise serving American grill fare and drinks in a neighborhood bar-and-grill setting. Franchisees operate full-service restaurants managing kitchen and bar staff, cost control, and takeout and delivery.
FranchiseVerdict summary · 2026
A Applebee's Neighborhood Grill & Bar franchise requires a total initial investment of $2.4M – $7.1M, including a $35K – $50K franchise fee and an ongoing 4.0% royalty[2]. Per the 2024 FDD, average unit revenue was $2.8M[2]. FranchiseVerdict grade: A (Strongest tier), an editorial assessment, not investment advice. Run a live ROI scan →
Data last verified · figures per the 2024 FDD issuance
Overview
- Investment
- $2.4M – $7.1M
- 39th pct Service Resta…
- Avg gross sales
- $2.8M
- 12th pct Service Resta…
- Royalty
- 4.0%
- 2nd pct Service Resta…
- Units
- 1,545
- 38th pct Service Resta…
- SBA charge-off
- N/A
Quick verdict · Full-Service Restaurants · color = vs category peers
Green = favorable by >10% vs Full-Service Restaurants avg · No shading = within ±10% · Red = unfavorable by >10% · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Bottom line
- COSTTotal investment $2.4M – $7.1M including a $35K franchise fee, 4.0% ongoing royalty.
- RETURNSAverage unit revenue of $2.8M/year (median $2.7M).
- RISKVerdict A (Strongest tier), verdict score 65/100 (higher is better).
- FLAGBankruptcy history disclosed in the FDD. Review Item 4 for details before proceeding.
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- Applebee's Franchisor LLC
- Parent company
- Dine Brands Global, Inc.
- Predecessor
- Applebee's International, Inc.
- Prior franchisor entity
- CEO title
- Chief Executive Officer, Dine Brands
- John Peyton
- Incorporated in
- DE
- HQ
- 10 W. Walnut St., 5th Floor, Pasadena, California 91103
- Auditor
- Ernst & Young LLP
- Audited financials
- Franchisor revenue
- $119.4M
- vs $98.9M prior year
Affiliated brands
- IHOP Franchisor
Other brands the franchisor or its parent operates (Item 1).
Overview
About
- CEO
- John Peyton
- Headquarters
- CA
- Founded
- 1988
- FDD year
- 2024
- States available
- 51
Can you afford it, and what does the money buy?
Entry cost runs 307% above the typical full-service restaurants franchise.
Source: FDD 2024 · Items 5–7
Full Item 7 breakdown36 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Initial Organizational and Training Expenses | $75K | $120K | |
| Purchase of Land | — | — | |
| Building Costs | $810K | $2.3M | |
| Site Work | $375K | $1.3M | |
| Professional Services | $64K | $230K | |
| Permits/Fees | $35K | $105K | |
| Furniture, Fixtures, Equipment and Signage | $495K | $805K | |
| POS System | $17K | $45K | |
| POS System License Fees | $4K | $8K | |
| Kitchen Display System | $2K | $2K | |
| Smallwares | $20K | $50K | |
| Initial Inventory | $26K | $47K | |
| Pre-Opening Expenses | $55K | $350K | |
| Applicant's Fee | $0 | $15K | |
| Franchise Fee Deposit | $0 | $10K | |
| Initial Franchise Fee | $25K | $35K | |
| Initial Advertising Expense | $5K | $40K | |
| Liquor License(s) | $500 | $1.0M | |
| Apple Supply Chain Co-op Stock Purchase | $0 | $100 | |
| On-Line Ordering | $56 | $150 | |
| Total initial investment | $2.4M | $7.1M |
Line items extracted from FDD Item 7. Ranges reflect the franchisor's stated low and high per line. Total is the sum of line-item lows / highs — actual costs may fall outside this range depending on market and build-out scope.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $2.4M – $7.1M
- Top 40% of category vs category
- Liquid capital req'd
- $405K – $655K
- Top 40% of category vs category
- Franchise fee
- $35K – $50K
- Top 40% of category vs category
- Royalty
- 4.0%
- percentage · typical 6–8%
- Ad fund
- 4.3%
- typical 3–5%
- Total fee load
- 8.3%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 4.0% of gross sales |
| Marketing / ad fund | 4.3% of gross sales |
| Technology fee | $3K |
| Transfer fee | $3K |
| Renewal fee | $4K |
| Inventory (initial) | $26K – $47K |
| Total fee load | 8.3% of rev |
What do units actually make?
Average unit sales run 62% above the full-service restaurants norm.
Source: FDD 2024 · Item 19
Single-unit · estimated
Returns at a glance
Indicative numbers using FDD Item 7 / Item 19 inputs and category-benchmarked cost ratios. Full single-unit, 25-unit portfolio, and LBO models (with every input editable to stress-test your own scenario) live on the financials page.
Store EBITDA · annual
$275K
9.8% margin
Unlevered ROIC
5%
EBITDA / total invested capital
Payback
19.2 yrs
cash-on-cash, unlevered
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
What one unit earns on your invested capital
Model A · Single-Unit Return
Computes unlevered return on invested capital (ROIC) for a single franchise unit. The target band for an attractive franchise is 30–60% ROIC. Below that and a passive index fund likely outperforms; above that and the franchisor has pricing power you're subsidizing.
Note: Item 19 revenue is what the franchisor discloses. It's the top line only. Operating costs below are category estimates. Override them to match your real lease quote, labor market, and build-out budget.
Returns model · single-unit ROIC
What would one Applebee's Neighborhood Grill & Bar unit return on the cash you put in?
Unlevered ROIC · per unit
Estimated return on your total franchise investment, before any debt financing.
5%
Below the 30–60% attractive-franchise band
What 25 units return when you use SBA financing
Model B · Return on Equity: Debt-Financed Acquisition
Models a 25-unit portfolio acquisition financed with an SBA 7(a) loan. Shows equity IRR (your return on cash invested), DSCR (how safely the cash flow covers debt service), and the capital stack (SBA + seller + equity breakdown).
This is the “search fund” or “entrepreneurship through acquisition” scenario: you buy an existing multi-unit operator, use leverage to amplify returns, and either operate or hire management. The 25-unit size is the typical minimum for an SBA-backed franchise portfolio acquisition to pencil as a full-time income.
What “return on equity” means here: if you put in $500K of your own cash and the business generates enough EBITDA to pay down debt and grow, your equity IRR is the annual return on that $500K, including the value created when you eventually sell. Target IRR for a search fund is typically 25–35%.
Levered LBO scenario · Yale Crease Capital framing
What would 25 Applebee's Neighborhood Grill & Bar units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$1.6M
on $7.8M purchase
Total debt
$6.2M
SBA $3.9M + senior + seller note
These models are for research and scenario planning only. Not investment advice. Actual results depend on your specific location, management, and market conditions. Consult a franchise attorney and accountant before signing any franchise agreement.
Item 19 · Source: 2024 FDD
Financial Performance
- Avg gross sales
- $2.8M
- Per unit, per year
- Median gross sales
- $2.7M
Gross sales are revenue before expenses — not profit. Actual owner earnings depend on rent, labor, royalties, marketing fees, and debt service.
- Item 19 type
- gross sales by region
- Sample size
- 1,531
- vs category median 18 · large
- Range (low → high)
- $830K→$11.5M
- Cohort dispersion (min → max)
- Transparency tier
- revenue_only
- Categorical assessment of disclosure depth
- Reporting year
- 2023
- Fiscal year the figures cover
- Source filing
- FDD 2024
- Disclosed in the 2024 filing, covering 2023
- Transparency
- 4 / 10
- vs category median 3 / 10 · above
Compared against 805 Full-Service Restaurants brands
Revenue is only 0.6x the investment. This means each unit may take 5+ years to recoup the initial outlay at typical margins.
Operator outlook
What the numbers say
Data-driven interpretation of this brand's financial disclosures, fee structure, and system trajectory.
Unit economics
Average unit generates $2.8M/year in gross sales. Revenue-to-investment ratio: 0.6x.
Fee burden
Total ongoing fee load of 8.3% (near the Full-Service Restaurants average).
Disclosure
Transparency score 4/10 — this franchisor discloses detailed breakdowns (quartiles, segments, or cohort data). Buyers can model unit economics with higher confidence.
Operator retention
System roughly stable (+1.8% 3-year CAGR) with 1,545 units.
Source: FDD Item 19 financial performance representations and publicly filed FDD data. Past performance is not indicative of future results. Verify all figures with the franchisor and current franchisees before making any investment decision.
vs Full-Service Restaurants averages
How Applebee's Neighborhood Grill & Bar Compares
Is the system healthy?
Source: FDD 2024 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 1,545
- Opened
- 4
- Last reporting year
- Closed
- 32
- Terminated
- 2
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 3
- Term expired, not renewed (per Item 20)
- Turnover rate
- 4.9%
- Company-owned
- 0
- Corporate units in the system
- % franchised
- 100%
- vs corporate-owned
- Net growth (3-yr)
- -3.9%
- Net unit change over 3 years
- 3-yr CAGR
- +1.8%
- Compounded over last 3 years
3-year detail · Item 20
- Opened (3yr)
- 13
- Closed (3yr)
- 54
- Terminated (3yr)
- 11
- Non-renewed (3yr)
- 10
- Transfers (3yr)
- 240
- Reacquired (3yr)
- 0
- Franchisor bought back
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 49 states with active franchisees
The Territory Map
Derived from franchisee contact records. Shows states with at least one current operator. Not where the franchisor is registered to sell new units (that data is re-extracting in a future refresh).
States derived from franchisee contact records (FDD Item 20). Shows states with at least one current operator on file. Full state registration data (Item 12) will appear on a future FDD refresh.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
No SBA loan data available for this brand.
What could kill this investment?
Source: SBA 7(a) FOIA · FDD Items 3, 21
Risk analysis
FranchiseVerdict rating + FDD Items 3, 4, 8, 16, 21
Risk & Legal
Applebee's presents elevated risk due to contracting unit base, undisclosed profitability, material litigation including consumer fraud claims, and absence of verified franchisee income benchmarks relative to substantial capital requirements.
Litigation (Item 3)
5 concluded actions: trademark infringement (Vampire Family Brands, settled $320K), ADA gift card (Mendez, settled $7K), trademark dilution (Heartland/Splenda, settled), collection action (Olander, dismissed), franchise termination/bankruptcy (RMH, settled $14.255M). No pending litigation.
Largest disclosed settlement: $14,255,326
Bankruptcy (Item 4)
Disclosed in last 7 years
Vance Chang, CFO, was CFO of YogaWorks, Inc. which filed Chapter 11 bankruptcy on October 14, 2020 in the U.S. Bankruptcy Court for the District of Delaware due to COVID-19 pressures.
Audited financials (Item 21)
Yes · Ernst & Young LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Supplier relationship · Items 8 & 16
- Franchisor sells you products: Yes
- Kickbacks from required suppliers: Yes
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
Score breakdown · what drove the 65 / 100 verdict
- 01MINORNegative unit growth (-2.1% YoY) indicates systemic contraction despite $2.8M average revenue
- 02MINORMaterial gap between average revenue ($2.82M) and investment range ($2.43M-$7.08M) suggests highly variable unit performance and profitability uncertainty
- 03MINORAbsence of Item 19 (net income disclosure) prevents validation of actual franchisee profitability relative to $2.43M-$7.08M investment
- 04HIGHMultiple concluded litigations including consumer fraud class action (Candice Watkins - menu pricing) and ADA compliance failures indicate operational/compliance risks
- 05MINOR20-year term locks franchisees into declining system; refranchising trend suggests franchisor may be exiting underperforming markets
- 06MINORHigh royalty rate (4%) on declining sales volumes reduces unit-level cash flow recovery potential
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 8.3% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2024 · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 20 years |
|---|---|
| Renewal term | 5 years |
| Allowed renewalsℹ | 4 |
| Territory type | protected |
| Protected territory | Yes |
| Exclusive territoryℹ | No |
| Territory radius | 3 mi |
| Territory population | 40,000 |
| Online sales rightsℹ | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Optional |
| Non-compete (years)ℹ | 2 years |
| Non-compete (miles)ℹ | 5 mi |
| Right of first refusalℹ | Yes |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Termination groundsℹ | 1 |
| Curable defaultsℹ | 4 |
| Mandatory arbitration | No |
| Arbitration location | Johnson County, Kansas |
| Jury trial waiver | Yes |
| Governing law | KS |
| Litigation count | 5 |
View Item 3 litigation summary
5 concluded actions: trademark infringement (Vampire Family Brands, settled $320K), ADA gift card (Mendez, settled $7K), trademark dilution (Heartland/Splenda, settled), collection action (Olander, dismissed), franchise termination/bankruptcy (RMH, settled $14.255M). No pending litigation.
Items 10, 11
Training & Operations
- Classroom training
- 8 hrs
- On-the-job training
- 622 hrs
- Training location
- Franchisee's approved training Restaurant
- Ongoing training
- Required
- Time to open
- 18 mo
- From signing to launch
- Site selection
- Franchisee selects; franchisor approves within 45 days
- Franchisor financing
- Not offered
- Item 10
- POS system
- A1POS (transitioning to Nigel POS)
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: A1POS (transitioning to Nigel POS)
Item 20 · call current owners
Franchisee Contacts
1,545 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Applebee's Neighborhood Grill & Bar · FDD (2024) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Applebee's Neighborhood Grill & Bar franchise?
The total investment to open a Applebee's Neighborhood Grill & Bar franchise ranges from $2.4M – $7.1M, with an initial franchise fee of $35K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Applebee's Neighborhood Grill & Bar franchise owners earn?
According to Item 19 of the Applebee's Neighborhood Grill & Bar FDD, the average gross sales per unit is $2.8M. The median is $2.7M. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
What is Item 19 in the Applebee's Neighborhood Grill & Bar FDD?
The FDD section where a franchisor may disclose financial performance of its outlets. Disclosure is optional and formats vary; figures are typically gross sales, which is revenue before expenses, not profit. FranchiseVerdict extracts these figures directly from the Applebee's Neighborhood Grill & Bar FDD and qualifies whose outlets they describe.
What is Applebee's Neighborhood Grill & Bar's franchise failure rate?
SBA 7(a) loan charge-off data is not available for Applebee's Neighborhood Grill & Bar (fewer than 10 loans on file). Charge-off rates are one way to gauge franchise risk, but not all franchise loans go through the SBA program. We recommend reviewing turnover and closure data in the FDD and speaking with current franchisees.
How many Applebee's Neighborhood Grill & Bar franchise locations are there?
As of their most recent FDD filing, Applebee's Neighborhood Grill & Bar has 1,545 total units in the United States, including 1,545 franchised units and 0 company-owned units. 4 new units were opened in the latest reporting year.
Is Applebee's Neighborhood Grill & Bar a good franchise to buy?
FranchiseVerdict rates Applebee's Neighborhood Grill & Bar as a A-grade franchise with a verdict score of 65 out of 100 (higher is better), based on our analysis of investment costs, revenue data, SBA loan performance, and growth trends. Our rating is based solely on publicly available FDD and government data; we recommend speaking with current franchisees before making any investment decision. This is not investment advice.
Data sourced from public FDD filings and SBA 7(a) FOIA records. Not financial advice.
For franchisors
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Data extracted from public FDD filings and SBA 7(a) loan disclosures (FOIA). This information is provided for research purposes only and does not constitute financial, legal, or investment advice. Verify all figures with the franchisor's current Franchise Disclosure Document before making any investment decision.