Applebee's Neighborhood Grill & Bar
Bottom line
- Total investment $2.4M – $7.1M including a $35K franchise fee, 4.0% ongoing royalty.
- Average unit revenue of $2.8M/year (median $2.7M).
- Rated STRONG with a risk score of 48/100.
- Established system with 1,545 units across 38 years of franchising — strong brand recognition and operational playbook.
Item 1 · who you're contracting with
The Franchisor
Yale framework · single-unit ROIC
Returns Analysis
Pulls Item 7 (investment) and Item 19 (revenue) from this brand's FDD into the Yale unlevered-ROIC formula. Override any input to stress-test it against your own assumptions.
The model · Yale framework
What would one Applebee's Neighborhood Grill & Bar unit return on the cash you put in?
Unlevered ROIC · per unit
8%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Applebee's Neighborhood Grill & Bar units return on equity?
Equity IRR · 5-yr
28.5%
3.50× MOIC
Year-1 DSCR
2.84×
EBITDA ÷ debt service
Equity required
$10.3M
on $21.9M purchase
Total debt
$11.6M
SBA $5.0M + senior + seller note
Overview
About
Franchisees operate casual dining establishments serving American-style food and beverages, managing kitchen/FOH staff, inventory, local marketing, and regulatory compliance (health, labor, ADA). Day-to-day involves staffing management, cost control, customer service oversight, and adherence to corporate operational standards across 2.8M average revenue units.
Item 7 · what it costs
The Vitals
Item 19
Financial Performance
Item 20 · unit dynamics
The Growth Chart
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 20 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 phone area codes (Item 20). Approximate — ported numbers may show the original state, not the franchisee's current location.
Government records
SBA Loan Data
Aggregated from SBA 7(a) loan disclosures, public data unique to FranchiseVerdict.
No SBA loan data available for this brand.
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
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.
Score breakdown · what drove the 48 / 100 rating
- 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
FDD Items 5, 6, 12, 17 · continued from Risk & Legal
Contract & Territory Detail
Item 11
Training & Operations
Item 20
Franchisee Contacts
Phone numbers extracted directly from this brand's FDD Item 20. After purchase, you'll also receive a list of validation questions tailored to this brand.
Franchisee contacts
100 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Applebee's Neighborhood Grill & Bar · FDD (2024) PDF