Applebee’s is an American Restaurant chain that focuses on casual dining offering salads, chicken, pasta, burgers, and “riblets.”
It is one of the world’s largest casual dining brands with $3.1B in sales and 12.2% of the Casual Dining market share. As of December 31, 2021, there were 1,584 restaurants in all 50 states, Puerto Rico, Guam, and 11 other countries. Applebee’s is more than 95% franchised with 31 franchisees who own an average of nearly 50 restaurants. The largest Franchisee owns ~29% of U.S. restaurants and the 10 largest Franchisees own 76% of the system.
The estimated total investment necessary to begin the operation of an Applebee’s Franchise ranges from $2,009,201 – $8,266,730. The initial Applebee’s Franchise Fee is $35,000.
When you go to sell an Applebee’s franchise based on the median multiple of .34 and average unit volume estimate for 2021 of $2,641,318, it would sell for $898,048. This is significantly lower than the midpoint investment of $5,137,965.
However, once you make over $5 million in sales, the multiple shifts to 0.86. This helps the restaurants start making up the investment cost. This is the reason behind 95% of Applebee’s franchises being owned by 31 franchisees. As such, you will have to wait some time before selling your restaurant to recover the initial investment.
Applebee’s offers people the opportunity to take a chunk of the American Fast Casual Restaurant pie. However, due to the massive investment required to turn a profit, it is not for people who do not have the money to start multiple franchises. Otherwise, it will take a really long time for people to get their money back.