Applebee’s Neighborhood Grill and Bar chain of restaurants is operated by Applebee’s International, Inc. It is a US based company and has its headquarters in Lenexa, Kansas. Bill and TJ Palmer opened the first restaurant in 1980 and started the chain of Applebee’s. This company has been franchising since 2007. Under the trade name of Applebee’s Neighborhood Grill & Bar, franchisees operate table service restaurants, sit-downs that include the service of food & alcoholic beverages.
Its franchise agreement consists of two parts. One is a development agreement as per which franchisee is required to open and operate at least one restaurant in accordance with an individual development program and during the left over term of the agreement, and if needed allows franchisee to open and operate more restaurants in the region . The second is, a separate franchise agreement between the franchisor and the franchisee for each restaurant operation.
No financing is offered by the franchisor to the franchisee and in addition to this franchisor does not guarantee any lease, note or obligation.
There is a field training program for management that includes task-oriented, in-store and performance-based training. This training continues for 12 weeks (5 or 6 days a week). Basic restaurant operations and management program for the directors of operations, persons with supervision or development responsibility (over more than 1 restaurant), kitchen managers, general managers is provided by the franchisor at one of the restaurants. Franchisor also provides basic training to non-management restaurant employees within a week, before or after opening a franchisee.
It is not mandatory for a franchisee to supervise the franchisee outlet personally. Franchisee can employ a director of operations in order to manage the franchisee restaurant. As per the franchise agreement it is required by the franchisee to employ a general manager who is required to devote full time supervising the day to day operation of each franchisee and a kitchen manager who is required to supervise daily kitchen operations of the restaurant. Franchisee can sell only those services and products that are mentioned in the franchisee agreement.
- 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, Signage and Equipment – $ 600,000 – $ 740,000
- Point Of Sale system – $ 38,000
- Small wares – $ 25,000 – $ 30,000
- Initial Inventory – $ 25,500 – $ 47,300
- Pre-Opening Expenses – $ 55,000 – $ 100,000
- Initial Franchise Fee – $ 35,000
- Initial Advertising Expenses – $ 5,000 – $ 40,000
- Liquor Licenses – $ 500 – $ 400,000
- Apple Supply Chain Co-op Stock Purchase – $ 100
- Additional Funds (3 Months) – $ 405,000 – $ 655,000
- Total – $ 3,001,100 – $ 5,780,400 Ongoing fees:
- Royalty – 4% of Gross Sales
- Applebee’s POS Software License Fee – $ 1,500 / site
- POS Software Maintenance Fee – $ 500 per restaurant / year
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