Applebee's (t. J.) Neighborhoo Franchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
FranchiseVerdict summary · 2026
A Applebee's (t. J.) Neighborhoo franchise requires a total initial investment of $617K – $5.8M, including a $35K franchise fee and an ongoing 4.0% royalty[2]. Per the 2026 FDD, average unit revenue was $3.0M[2]. FranchiseVerdict grade: B (Above average), an editorial assessment, not investment advice. Run a live ROI scan →
Data last verified · figures per the 2026 FDD issuance
Overview
- Investment
- $617K – $5.8M
- 27th pct Service Resta…
- Avg gross sales
- $3.0M
- 13th pct Service Resta…
- Royalty
- 4.0%
- 2nd pct Service Resta…
- Units
- 1,480
- 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 $617K – $5.8M including a $35K franchise fee, 4.0% ongoing royalty.
- RETURNSAverage unit revenue of $3.0M/year (median $2.8M).
- RISKVerdict B (Above average), verdict score 68/100 (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.
- Incorporated in
- Delaware
- HQ
- 10 W. Walnut St., 5th Floor, Pasadena, California 91103
- Auditor
- KPMG LLP
- Audited financials
- Franchisor revenue
- $145.5M
- vs $131.7M prior year
Overview
About
Sit-down, table-service restaurants serving food and alcoholic beverages under the trade name Applebee's Neighborhood Grill & Bar.
- Headquarters
- California
- Founded
- 2014
- FDD year
- 2026
Can you afford it, and what does the money buy?
Entry cost runs 177% above the typical full-service restaurants franchise.
Source: FDD 2026 · Items 5–7
FDD Item 7 · 2026 filing
Initial investment breakdown
| Cost component | Low | High |
|---|---|---|
| Initial franchise fee | $35K | $35K |
| Working capital (3–6 mo) | $405K | $450K |
| Equipment, build-out, other | $177K | $5.3M |
| Total initial investment | $617K | $5.8M |
Source: Applebee's (t. J.) Neighborhoo 2026 FDD, Items 5 and 7[2]. “Equipment, build-out, other” is computed as total minus disclosed line items above.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $617K – $5.8M
- Top 40% of category vs category
- Liquid capital req'd
- $405K – $450K
- Top 40% of category vs category
- Franchise fee
- $35K – $35K
- Top 40% of category vs category
- Royalty
- 4.0%
- typical 6–8%
- Ad fund
- 4.3%
- typical 3–5%
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 4.0% of gross sales |
| Marketing / ad fund | 4.3% of gross sales |
| Transfer fee | $3K |
| Inventory (initial) | $26K – $28K |
What do units actually make?
Average unit sales run 67% above the full-service restaurants norm.
Source: FDD 2026 · Item 19
Single-unit · not modelled
Returns at a glance
An FDD discloses gross sales, not profit, and the operating costs that turn one into the other are in no filing. We publish no modelled return for Applebee's (t. J.) Neighborhoo until someone supplies them — yours, in the models below.
—
Not modelled yet
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
Total invested capital · disclosed
$3.6M
Item 7 initial investment plus working capital, as filed — the one figure here that needs no assumption.
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, read against the 30–60% reference band · Yale SOM, Post-MBA Path Exhibit 2 (2023). Below that band a passive index fund likely outperforms; above it the franchisor has pricing power you're subsidizing.
Note: Item 19 revenue is what the franchisor discloses, and it is the top line only — gross sales are not profit. No FDD discloses the operating costs that turn one into the other, so those fields start empty and nothing is modelled until you supply them from your own lease quote, labor market and build-out budget.
Returns model · single-unit ROIC
What would one Applebee's (t. J.) Neighborhoo unit return on the cash you put in?
Illustrative category typicals — not sourced to any filing, survey or sample. Replace them with figures from franchisee validation calls before you rely on the output.
Unlevered ROIC · per unit
Your modelled return on total invested capital, before any debt financing.
—
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
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%.
Not modelled yet
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
A 25-unit return is built on a per-unit EBITDA. Fill in the operating costs in Model A above and this model runs on that figure, or take the whole scenario to the full ROI workbench, where the portfolio and LBO models accept your own per-unit economics directly.
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: 2026 FDD
Financial Performance
- Avg gross sales
- $3.0M
- Per unit, per year
- Median gross sales
- $2.8M
Gross sales are revenue before expenses — not profit. Actual owner earnings depend on rent, labor, royalties, marketing fees, and debt service.
- Item 19 type
- historical gross sales by region
- Sample size
- 1,351 outlets
- vs category median 18 · large
- Range (low → high)
- $1.1M→$10.2M
- Cohort dispersion (min → max)
- Reporting year
- 2025
- Fiscal year the figures cover
- Source filing
- FDD 2026
- Disclosed in the 2026 filing, covering 2025
Compared against 802 Full-Service Restaurants brands
Revenue is only 0.9x 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 $3.0M/year in gross sales. Revenue-to-investment ratio: 0.9x.
Fee burden
4.0% royalty + 4.3% ad fund — lower than the category average.
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 (t. J.) Neighborhoo Compares
Is the system healthy?
Source: FDD 2026 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 1,480
- Opened
- 11
- Last reporting year
- Closed
- 33
- Terminated
- 0
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 8
- Term expired, not renewed (per Item 20)
- Turnover rate
- 2.9%
- Company-owned
- 59
- Corporate units in the system
- % franchised
- 96%
- vs corporate-owned
3-year detail · Item 20
- Opened (3yr)
- 11
- Closed (3yr)
- 33
- Terminated (3yr)
- 0
- Non-renewed (3yr)
- 8
- Transfers (3yr)
- 23
- Reacquired (3yr)
- 12
- Franchisor bought back
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA loan disclosures. This brand has only 8 7(a) loans on file; statistical reliability is limited below 10 loans.
- Total loans
- 8
- Loan volume
- $11.8M
- Median loan
- $1.2M
- 50th percentile
- Charge-off rate
- N/A
- limited sample (8 loans) — rate not shown below 10
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- N/A
- 5-yr charge-off
- N/A
- Loans approved 2021+
- Active lenders
- 7
- Defaults
- N/A
Explore lender portfolios on Bank Reports or regional data on State Reports.
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
Litigation (Item 3)
2 pending cases: (1) Apple Central KC LLC v. Applebee's Franchisor LLC adversary bankruptcy proceeding re breach of contract, ongoing; (2) Applebee's Franchisor LLC v. Mountain Apple LLC re unpaid royalties, administratively closed/stayed pending franchisee bankruptcy. 5 concluded actions: Applebee's v. William J. Georgas et al. (breach of contract re unauthorized restaurant closures) settled Dec 2025 for $4,000,000 paid TO Applebee's; Vampire Family Brands trademark suit settled for $320,000; Himelda Mendez ADA/Braille class action settled for $7,000; Heartland Consumer Products trademark dispute settled via product-exclusivity agreement; Applebee's v. RMH Franchise Corporation (nonpayment of royalties/fees, RMH bankruptcy) settled for $14,255,326 paid TO Applebee's; Candice Watkins consumer-fraud class action dismissed on appeal (Third Circuit affirmed 2014).
Largest disclosed settlement: $14,255,326
Bankruptcy (Item 4)
Disclosed in last 7 years
No bankruptcy of the franchisor itself disclosed under Item 4; disclosure relates to CFO Vance Chang's prior role as CFO of YogaWorks, Inc., which filed Chapter 11 in Delaware on Oct 14, 2020 due to COVID-19 pressures (he left YogaWorks in Nov 2019, before the filing).
Audited financials (Item 21)
Yes · KPMG LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Supplier relationship · Items 8 & 16
- Franchisor sells you products: Yes
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
What are you signing up for?
Ongoing fees run about 8.3% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2026 · 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 | none |
| Territory radius | 5 mi |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Non-compete (years)ℹ | 2 years |
| Non-compete (miles)ℹ | 5 mi |
| Right of first refusalℹ | Yes |
| Transfer requires consent | Yes |
| Termination groundsℹ | 10 |
| Curable defaultsℹ | 4 |
| Mandatory arbitration | No |
| Jury trial waiver | Yes |
| Litigation count | 7 |
View Item 3 litigation summary
2 pending cases: (1) Apple Central KC LLC v. Applebee's Franchisor LLC adversary bankruptcy proceeding re breach of contract, ongoing; (2) Applebee's Franchisor LLC v. Mountain Apple LLC re unpaid royalties, administratively closed/stayed pending franchisee bankruptcy. 5 concluded actions: Applebee's v. William J. Georgas et al. (breach of contract re unauthorized restaurant closures) settled Dec 2025 for $4,000,000 paid TO Applebee's; Vampire Family Brands trademark suit settled for $320,000; Himelda Mendez ADA/Braille class action settled for $7,000; Heartland Consumer Products trademark dispute settled via product-exclusivity agreement; Applebee's v. RMH Franchise Corporation (nonpayment of royalties/fees, RMH bankruptcy) settled for $14,255,326 paid TO Applebee's; Candice Watkins consumer-fraud class action dismissed on appeal (Third Circuit affirmed 2014).
Items 10, 11
Training & Operations
- Training location
- On-the-job training in one of the Restaurants
- Ongoing training
- Required
- Franchisor financing
- Not offered
- Item 10
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Applebee's (t. J.) Neighborhoo franchise?
The total investment to open a Applebee's (t. J.) Neighborhoo franchise ranges from $617K – $5.8M, 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 (t. J.) Neighborhoo franchise owners earn?
According to Item 19 of the Applebee's (t. J.) Neighborhoo FDD, the average gross sales per unit is $3.0M. The median is $2.8M. 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 (t. J.) Neighborhoo 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 (t. J.) Neighborhoo FDD and qualifies whose outlets they describe.
What is Applebee's (t. J.) Neighborhoo's franchise failure rate?
SBA 7(a) loan charge-off data is not available for Applebee's (t. J.) Neighborhoo (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 (t. J.) Neighborhoo franchise locations are there?
As of their most recent FDD filing, Applebee's (t. J.) Neighborhoo has 1,480 total units in the United States, including 1,421 franchised units and 59 company-owned units. 11 new units were opened in the latest reporting year.
Is Applebee's (t. J.) Neighborhoo a good franchise to buy?
FranchiseVerdict rates Applebee's (t. J.) Neighborhoo as a B-grade franchise with a verdict score of 68 out of 100 (higher is better). The grade is a deterministic score built from six weighted dimensions — financial health, unit economics, unit growth, scale, legal, and transparency — then calibrated against SBA loan charge-off rates and FDD age. Transparency is one of the six, so a filing that discloses less scores lower on that dimension than one that discloses more. 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
Are you the franchisor?
If you represent Applebee's (t. J.) Neighborhoo, you can request corrections or provide updated information.
Other Full-Service Restaurants franchises
Compare similar franchise opportunities in the Full-Service Restaurants category
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.