Applebee's (t. J.) Neighborhoo Franchise Cost, Revenue & Review 2026
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 latest FDD, average unit revenue was $3.0M[2]. FranchiseVerdict grade: A (Strongest tier), an editorial assessment, not investment advice. Run a live ROI scan →
Data last verified
Overview
- Investment
- $617K – $5.8M
- 39th pct Service Resta…
- Avg gross sales
- $3.0M
- 26th pct Service Resta…
- Royalty
- 4.0%
- 2nd pct Service Resta…
- Units
- 1,480
- 51st 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
- Total investment $617K – $5.8M including a $35K franchise fee, 4.0% ongoing royalty.
- Average unit revenue of $3.0M/year (median $2.8M).
- Verdict A (Strongest tier), verdict score 68/100 (higher is better).
- Bankruptcy 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
Can you afford it, and what does the money buy?
Entry cost runs 242% above the typical full-service restaurants franchise.
Source: FDD · Items 5–7
FDD Item 7
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 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
- Middle of category vs category
- Franchise fee
- $35K – $35K
- Top 40% of category vs category
- Royalty
- 4.0%
- percentage · 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 93% above the full-service restaurants norm.
Source: FDD · 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
$288K
9.8% margin
Unlevered ROIC
8%
EBITDA / total invested capital
Payback
12.7 yrs
cash-on-cash, unlevered
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
- 1351 units
- vs category median 16 · large
- Range (low → high)
- $1.1M→$10.2M
- Cohort dispersion (min → max)
- Reporting year
- 2025
- Fiscal year the figures cover
Compared against 1273 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 · 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 · 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 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 A-grade franchise with a verdict score of 68 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.