Applebee's (t. J.) Neighborhoo: Litigation & Risk
Full-Service Restaurants · FDD Items 3, 4 & 5
Elevated Risk
7 cases disclosed in FDD Items 3 and 4. Bankruptcy disclosed in Item 4.
FDD Items 3 & 4
Litigation Metrics
- Cases disclosed
- 7
- Total from FDD Items 3 and 4
- Bankruptcy (Item 4)
- Disclosed
- Franchisor or officer bankruptcy
- Verdict score
- 68 / 100
- FranchiseVerdict composite · higher is better
- Rating
- A
- A / B / C / D / F verdict grade
7(a) FOIA data · FY2020–present
SBA Loan Performance
Aggregated from public SBA 7(a) loan disclosures. Charge-off rate is the share of loans that were charged off or settled for less than the full balance.
- Total 7(a) loans
- 8
- Government-backed loans issued
- Charge-off rate
- N/A
- vs 16% franchise average
- 5-yr charge-off rate
- N/A
- Defaults
- N/A
- Loans charged off or defaulted
- Total loan volume
- $11.8M
- Avg loan size
- $1.5M
- Participating lenders
- 7
FDD Items 5, 6 & 17: What You Give Up
Contract Risk Indicators
- Mandatory arbitration
- Not required
- You retain the right to sue in court
- Jury trial waiver
- Waived
- You give up the right to a jury trial
- Non-compete
- 2 yrs
- Post-termination restriction on similar businesses
- Franchisor can compete
- Yes
- Franchisor can open competing locations in or near your territory
- Right of first refusal
- Yes
- Franchisor can match any purchase offer when you try to sell
Extracted from FDD Item 3
Litigation Detail
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).
Litigation data from FDD Items 3, 4, and 5. SBA data from public 7(a) FOIA records (FY2020–present). Not legal advice. Consult a franchise attorney before signing any franchise agreement.