Applebee’s Franchise in 2025: Costs, Fees, and FDD Explained

If you’re interested in restaurant franchising, Applebee’s is one of the top choices for many entrepreneurs. With its diverse Applebee’s menu, strong brand recognition, and a history of success, Applebee’s offers a compelling opportunity for potential franchise owners in 2025. 

However, before diving into this investment, it’s essential to understand the costs involved, the potential profitability, and the ongoing fees. This guide will take you through everything you need to know about Applebee’s franchise ownership, including franchise fees, location options, profitability, and more.

Quick Answer
The total cost to open an Applebee’s franchise in 2025 ranges from $2.5 million to $4.5 million, including the initial franchise fee, real estate, and other startup expenses. Applebee’s franchisees can expect average annual sales between $3 million and $5 million, with profit margins ranging from 5% to 15%.

Applebee’s has been a household name for over 40 years, attracting customers with its extensive menu of American comfort food, signature cocktails, and family-friendly atmosphere. The company’s ability to adapt to consumer demands and its history of successful franchise growth makes it a lucrative option for aspiring entrepreneurs in the restaurant industry.

• Brand Recognition: Applebee’s is a recognized and trusted brand with a loyal customer base.
• Proven Business Model: With years of franchise success, Applebee’s offers a reliable and tested business system.
• Supportive Franchise System: Franchisees receive extensive support in areas like training, marketing, and site selection.
• Potential for Growth: Applebee’s is expanding and adapting to meet new trends in dining.

When it comes to franchise costs, understanding the initial investment and ongoing fees is crucial for determining whether the Applebee’s franchise is a viable investment for you. 

The initial franchise fee for Applebee’s is typically between $35,000 and $40,000. This fee provides the franchisee with the right to open and operate an Applebee’s restaurant. It’s important to note that this fee does not cover the costs of setting up the restaurant, which will be covered in the next section.

Initial Investment

The total initial investment to open an Applebee’s franchise can vary, but it generally ranges between $2.5 million and $4.5 million. This includes a variety of expenses, such as:

• Real estate costs: Leasing or purchasing property to house the franchise.
• Construction and build-out costs: Depending on the location and size of the restaurant, this can vary significantly.
• Furniture, fixtures, and equipment: Restaurant-specific items such as kitchen equipment, furniture, and décor.
• Opening inventory: Food and beverage stock needed to start operations.
• Other costs: Signage, local marketing, and legal fees.

Ongoing Fees and Royalties

Applebee’s franchisees are required to pay several ongoing fees, including:

• Royalty Fee: Franchisees must pay a 4% royalty fee on gross sales, which covers the use of the brand, training, and ongoing corporate support.
• Advertising Fee: Franchisees contribute 4% of their gross sales to a national advertising fund, which is used for promoting the Applebee’s brand across different platforms.

These fees ensure the continued strength of the brand and offer ongoing support to franchisees.

One of the most important factors for potential franchisees is understanding how much they can earn. While the profitability of any franchise depends on several factors, including location, management, and local market conditions, Applebee’s franchisees generally experience solid financial performance.

Applebee’s Average Sales Volume

Applebee’s restaurants typically report annual sales between $3 million and $5 million. Depending on your location, customer base, and management practices, your sales can vary, but these numbers are common across many Applebee’s locations.

Profit Margins

After covering all operating expenses, including the royalty fees and advertising contributions, Applebee’s franchisees can expect to see profit margins ranging between 5% and 15%. For instance:

• If you are generating $3 million in sales annually with a 10% profit margin, you can expect around $300,000 in net profit.
• At a 15% profit margin, that could rise to around $450,000 in net profit for the year.

These figures can vary based on operational efficiency, local market conditions, and how well the franchise is managed.

The Franchise Disclosure Document (FDD) is a legal document that Applebee’s provides to potential franchisees before signing an agreement. The FDD contains important information about the franchise opportunity, including financial data, franchisor obligations, and franchisee responsibilities. The FDD is essential for understanding the terms and conditions of operating an Applebee’s franchise.

Key Sections in the FDD:

• Item 1: The Franchisor: This section provides an overview of the franchisor’s history, business structure, and management team.
• Item 2: Business Experience: The FDD outlines the business experience of the franchisor and its key personnel.
• Item 5: Initial Fees: Details about the initial franchise fee, royalties, and other costs.
• Item 6: Other Fees: Covers ongoing fees like marketing contributions and other charges.
• Item 7: Estimated Initial Investment: This section provides a detailed breakdown of the costs involved in opening the franchise.
• Item 20: Financial Performance Representations: Here, Applebee’s will provide historical financial data to help you understand the earning potential.
• Item 21: Franchisee’s Obligations: The responsibilities and commitments required from franchisees.

Applebee’s offers comprehensive training and ongoing support to ensure that franchisees have everything they need to succeed. 

Here’s a look at the main components of Applebee’s franchisee support system:

• Initial Training: Franchisees undergo a 6-week training program, covering all aspects of running the restaurant, from kitchen operations to customer service.
• Ongoing Support: Franchisees have access to a dedicated support team, covering marketing, operations, and finance.
• Marketing Assistance: Applebee’s helps franchisees with national marketing campaigns as well as providing materials for local marketing efforts.
• Operational Support: Franchisees benefit from Applebee’s operational expertise, helping them streamline processes for maximum efficiency and profitability.

Applebee’s is widely distributed, with more than 1,600 locations across the globe. Franchisees can operate standalone locations, strip mall units, or co-branded units. The company has been focusing on expanding its reach in emerging markets, which could present significant opportunities for growth in the coming years.

Steps to Open an Applebee’s Franchise

If you’re ready to become an Applebee’s franchisee, here’s a general overview of the steps to get started:

1. Complete the Application: Submit your application to Applebee’s to begin the process.
2. Franchise Disclosure Document: Review the FDD and seek legal and financial advice.
3. Secure Financing: Applebee’s requires franchisees to meet specific financial requirements.
4. Select a Location: With the help of Applebee’s real estate team, select a location that aligns with the brand’s standards.
5. Training: Undergo the 6-week training program to learn all aspects of the business.
6. Opening the Restaurant: Once everything is in place, open your Applebee’s franchise to the public.

Conclusion

Investing in an Applebee’s franchise in 2025 can be a lucrative opportunity for individuals looking to break into the restaurant industry. With a well-established brand, ongoing corporate support, and a proven business model, Applebee’s offers a comprehensive franchise system for those willing to invest. The financial requirements are significant, but the potential for high returns makes it an appealing option for many entrepreneurs.

For anyone considering an Applebee’s franchise, it is critical to thoroughly review the FDD, understand all costs involved, and ensure you meet the financial and personal requirements to succeed in this competitive industry.