Applebees
Date Incorporation: 1987
Franchising Since: 2007
Headquarters: Kansas
Description: The franchisee will operate sit-down, table service restaurants, including the service of food and alcoholic beverages, under the trade name of Applebee's Neighborhood Grill & Bar.
Franchise Offer: Each franchise arrangement consists of 2 parts: a development agreement which requires the franchisee to open and operate at least 1 restaurant pursuant to an initial development schedule and during the remaining term of the development agreement, and allows the franchisee to open and operate more restaurants in the territory if needed; and separate franchise agreements between the franchisee and the franchisor for the operation of each restaurant.
Financial Assistance: The franchisor does not offer any financing to the franchisee nor do they guarantee any note, lease or obligation.
Training and Assistance: The field training program for management includes in-store, performance-based, task-oriented training. This training will take approximately 12 weeks (a work week of 5 to 6 days). A basic restaurant management and operations program for the directors of operations, other persons with development or supervisory responsibility over more than 1 restaurant, general managers, kitchen managers and other restaurant managers is provided by the franchisor at one of his restaurants or that of a franchisee. Before the opening of the restaurant and for approximately 1 week after the restaurant opens, the franchisor provides a basic training program for the non-management restaurant employees.
Territory: The franchisee is granted exclusive right to develop one or more restaurants within a specified territory during one or more initial development periods.
Term of Agreement and Renewal: The franchise agreement has a 20-year term. It is possible to renew up to 4 times for 5 years each, if the franchisee is in good standing. At renewal, a fee equal to 10% of the franchisee fee must be paid.
Obligations and Restrictions: The franchisor does not require the franchisee to supervise personally the franchised restaurants. The franchisee must employ a director of operations to devote their full-time efforts to the franchisee's restaurants. Under each franchise agreement, the franchisee must employ a general manager who will devote their full-time efforts to supervising the day-to-day operation of each restaurant and a kitchen manager who will devote their full-time efforts to supervising the day-to-day operation of the restaurant kitchen. The franchisee may offer for sale in the restaurants only those products and services specified in the franchise agreement. Unless the franchisor specifically consents in writing, the franchisee must offer all the products and services specified in the preceding sentence.
Total Number of Units: 1875 units by year end 2008
Total Number of franchises Units: 1470 franchised units by year end 2008
Investment Tables:
Initial Investment:
| Expenditures | Low | High |
|---|---|---|
| Initial Organizational and Training Expenses | $75,000 | $120,000 |
| Purchase of Land | $450,000 | $1,500,000 |
| Building Costs | $1,100,000 | $1,350,000 |
| Site Work | $72,000 | $390,000 |
| Professional Services | $65,000 | $85,000 |
| Permits/Fees |
$50,000 | $250,000 |
| Furniture, Fixtures, Equipment and Signage | $600,000 | $740,000 |
| Point Of Sale system | $38,000 | $38,000 |
| Small wares (dishes, silverware, other utensils, etc.) | $25,000 | $30,000 |
| Initial Inventory | $25,500 | $47,300 |
| Pre-Opening Expenses | $55,000 | $100,000 |
| Initial Franchise Fee | $35,000 | $35,000 |
| Initial Advertising Expenses | $5,000 | $40,000 |
| Liquor Licenses | $500 | $400,000 |
| Apple Supply Chain Co-op Stock Purchase | $100 | $100 |
| Additional Funds - 3 Months | $405,000 | $655,000 |
| Total | $3,001,100 | $5,780,400 |
Ongoing fees:
| Name of Fee | Amount |
|---|---|
| Royalty | 4% of Gross Sales |
| Weight Watchers Royalty | 2.5% of Gross Sales of Weight Watchers menu items |
| Advertising (National Advertising Fund) | For 2007, 2.75% of total gross sales. |
| Cooperative Advertising | Maximum 1 % of total gross sales. |
| E-Learning | Approximately $10 per disk; approximately $125 per year per restaurant. |
| Applebee’s POS Software License Fee | $1,500 per site |
| Applebee’s POS Software Maintenance Fee | $500 per restaurant per year |
| A1 Cards Subscription Fee | $260 per restaurant per year |
| QSR's Kitchen Display System Software Maintenance Fee | $100 per restaurant per year |
| IT Labor Subscription | $2,350 for license; $245 per restaurant per year |
| Renewal of Franchise Agreement | Currently $3,500 each five-year renewal period. |
| Extra Manuals | $5 - $250 |
| Site Development | $75 - $375 |
| National Gift Card Program Charges | Currently, 6.68% of the redeemed portion of gift cards sold in the national program |
| One-to-One Program | Approximately $400 per year for data captures; optional local e-mail costs are $750 per franchise group set-up fee; monthly fee is $425 per franchise group. |
| Food Cost Analysis System | Approximately $522 per restaurant per year. |
| Guest Satisfaction Surveys | Approximately $35 per restaurant per year. |
| Applebee's Restaurant Solution Center (Help Desk) | Annual costs range from $1,210-$1,700 per restaurant. |
| Apple STAR | $150 per Restaurant per year. |
| Government Relations Fund | $200 per Restaurant per year recommended. |
| Creative Services Graphic Design Jobs | $75 per hour. |
Date of FDD: March 26 2009
The above information has been taken from the UFOC/FDD of Applebee's
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