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Description
Investment Icon

What Are the Initial Investment Requirements for an Applebee's Franchise?

To open an Applebee's Neighborhood Grill & Bar franchise, you should be prepared for a significant initial investment. This ranges from approximately $2,428,029 to $7,084,006, which includes a franchise fee of $35,000. Additionally, franchisees are required to have a net worth between $1,500,000 and $2,500,000, along with sufficient cash reserves to cover the initial investment. Understanding these financial commitments is crucial for aspiring franchisees to evaluate their readiness for ownership.

Fees Icon

What Are the Ongoing Fees Associated with Applebee's Franchise?

As an Applebee's franchisee, you will encounter ongoing fees that can impact your profitability. The royalty fee is set at 4% of gross sales, while a marketing fee of 4.25% is also required. These fees contribute to the overall brand marketing and operational support, which are essential for maintaining the franchise's competitive edge. It's important to factor these costs into your financial projections to ensure sustainable operations.

Revenue Icon

What Is the Average Revenue Potential for Applebee's Franchisees?

Applebee's franchisees can expect substantial revenue potential, with average annual revenue per unit reported at approximately $2,820,000. The median annual revenue is slightly lower at $2,680,000, while some units have achieved revenues as high as $11,530,000. This financial performance underscores the brand's popularity and the potential for franchisees to achieve significant returns on their investment.

Breakeven Icon

What Is the Typical Breakeven and Payback Period for Applebee's Franchise?

Franchisees can anticipate a breakeven period of around 18 months, which indicates a relatively quick return on investment. The investment payback period is estimated at 32 months, allowing franchisees to begin recouping their initial costs within a few years. These timelines are critical for prospective owners to understand the financial dynamics and plan their business strategies effectively.

Applebee's Neighborhood Grill & Bar Franchise Financial Requirements

Below, you’ll find an overview of the initial investment needed to launch the business, along with the ongoing fees required by the franchisor to maintain operations over time.

Net Worth Required icon The minimum total assets (minus liabilities) you must possess.

i Net Worth Required:

$1,500,000 - $2,500,000
Investment Payback icon The estimated period to recoup your total investment.

i Investment Payback:

32 Months
Franchise Fee icon The initial fee paid to join the franchise system.

i Franchise Fee:

$35,000
Royalty Fee icon Ongoing percentage of revenue paid to the franchisor.

i Royalty Fee:

4%
Marketing Fee icon Regular contribution toward the franchise’s advertising fund.

i Marketing Fee:

4.25%
Breakeven Time icon The estimated timeframe to recover your initial costs.

i Breakeven Time:

18 Months
Initial Investment icon The total amount required to launch the franchise.

i Initial Investment:

$2,428,029 - $7,084,006
Cash Required icon The minimum liquid capital you must have on hand.

i Cash Required:

$2,428,029 - $7,084,006
Average Revenue icon The typical yearly revenue generated per franchise location.

i Average Revenue:

$2,820,000
Median Revenue icon The middle value of yearly revenue among franchise locations.

i Median Revenue:

$2,680,000
Highest Revenue icon The largest reported annual revenue among franchisees.

i Highest Revenue:

$11,530,000
Lowest Revenue icon The smallest reported annual revenue among franchisees.

i Lowest Revenue:

$830,000
Industry icon A broad sector defining similar types of franchise businesses.

i Industry:

Food Franchises
Category icon A more specific division within the broader industry.

i Category:

Casual Dining
Leadership icon The key individuals guiding the franchise’s strategy and growth.

i Leadership:

John Peyton
Corporate Address icon The official business address of the franchisor’s headquarters.

i Corporate Address:

450 North Brand Boulevard, 7th Floor Glendale, California 91203-4415
Funding Year icon Available financing options to help start the franchise.

i Funding Year:

2014
Parent Company icon The main organization that owns the franchise brand.

i Parent Company:

Applebee's Franchisor LLC

Applebee's Neighborhood Grill & Bar Franchise Unit Growth Summary

A breakdown of corporate, franchised, and total units, with yearly net changes.

The overall number of operating franchise locations.

Total Units i

1542
The number of locations owned by independent franchisees.

Franchised Units i

1542
The number of locations owned and run by the franchisor.

Corporate Units i

0
Units 2021 2022 2023
Total Units 1,584 1,575 1,542
Net Change YoY -9 -33
Franchised Units 1,515 1,575 1,542
Net Change YoY 60 -33
Corporate Units 69 0 0
Net Change YoY -69 0
Investment About

Initial Investment

The initial investment for an Applebee's Neighborhood Grill & Bar franchise ranges from $2,428,029 to $7,084,006. This includes a franchise fee of $35,000. Prospective franchisees should be prepared for varying costs based on location, size, and specific operational needs.

Potential About

Financial Performance

Applebee's franchises average annual revenue per unit is approximately $2,820,000, with a median of $2,680,000. The revenue can vary significantly, with the lowest reported annual revenue at $830,000 and the highest reaching $11,530,000. This performance highlights the potential for profitability within the franchise model.

Metrics About

Franchise Fees

Franchisees are required to pay a royalty fee of 4% on gross sales, alongside a marketing fee of 4.25%. These fees are essential for maintaining brand standards and supporting marketing initiatives that drive customer traffic to the restaurants.

Fees About

Net Worth Requirements

To qualify for an Applebee's franchise, applicants must have a net worth between $1,500,000 and $2,500,000. This financial threshold ensures that franchisees have the necessary resources to support their business and navigate initial operational challenges.

Breakeven About

Breakeven and Payback

Franchisees can expect a breakeven period of approximately 18 months, with an investment payback timeline of around 32 months. These metrics indicate a relatively swift return on investment, making it an attractive option for aspiring restaurant owners.

Units About

Franchise Growth

As of 2023, Applebee's operates a total of 1,542 franchised units, reflecting a slight decline from previous years. The brand's focus on franchising allows for continued expansion and market penetration, providing opportunities for new franchisees to enter the business.

Frequently Asked Questions

The initial investment for an Applebee's franchise ranges from $2,428,029 to $7,084,006. This includes the franchise fee, equipment, and other startup costs.