$69

Business Description

Applebee’s was formed in Delaware on July 28, 2014. Our principal business address is 450 North Brand Boulevard, 7th Floor, Glendale, California 91203, and we do business only under our company name and the trade names Applebee’s Neighborhood Grill & Bar® and Applebee’s®.

Prior Experience

Since October 1, 2014, we have offered franchises for restaurants utilizing the service marks Applebee’s Neighborhood Grill & Bar® and Applebee’s Grill®, using a system (the “System”) specializing in the sale of uniform, high quality, moderately priced food and alcoholic beverages in a distinctive, casual setting (“Restaurants”) in the U.S. and abroad. Applebee’s has no businesses other than as described in this Disclosure Document. We have not offered franchises in any other line of business. Our registered agents for service of process are listed in Exhibit C.

Business Offered

You will develop and operate Restaurants within a defined geographic area (“Territory”). You will use our various trademarks, construction specifications, designs, color schemes, signs and equipment for Restaurant premises, procedures and recipes for preparing food and beverage products, inventory, operations, and financial control methods, initial and ongoing management training and teaching techniques, and advertising and promotional services and assistance. Each franchise arrangement consists of two parts: a development agreement (“Development Agreement”) which requires you to open and operate at least one Restaurant pursuant to an initial development schedule and during the remaining term of the Development Agreement, and allows you to open and operate more Restaurants in the Territory, if needed; and separate franchise agreements (“Franchise Agreement(s)”) between you and us for your operation of each Restaurant. The Franchise Agreement names the location of the Restaurant and tells you your rights and obligations for that Restaurant. The Development Agreement and each Franchise Agreement will be between you and us, and if you are a corporation, all or some of your shareholders; and if you are a partnership, some or all your partners. Those people who sign as your shareholders or partners and who guarantee your financial obligations to us under a Development Agreement and Franchise Agreement are “Principal Shareholders.” Although the Agreements attached as Exhibits E and F assume that you are a corporate franchisee, we do consider other types of business entities (for example, general or limited partnerships and limited liability companies) which meet the requirements for franchisees described in the Agreements. In those cases, you must execute amendments to the Development Agreement and Franchise Agreement that conform those Agreements to your form of business structure. A sample form amendment is attached to the Development Agreement included as Exhibit E to the Disclosure Document and a sample form amendment is attached to the Franchise Agreement included as Exhibit F to this Disclosure Document. We intend to use and file, if and as appropriate, a separate franchise disclosure document to offer franchises for Applebee’s full-service Restaurants and new Applebee’s concepts for fast-casual and/or quickservice Restaurants to be located at another primary business or in conjunction with other businesses or at institutional settings such as schools, colleges and universities, military and other governmental facilities, hospitals, airports, travel plazas, casinos, stadiums, and any other site, venue or location operated by a master concessionaire or contract food service provider (a “Non-Traditional Venue”). The terms of such an offering may differ materially from the terms described in this Disclosure Document.

Initial Fees

Applicant’s Fee. You may be required to pay a nonrefundable applicant’s fee of $15,000. The applicant’s fee may be waived or reduced if the applicant is an existing System franchisee or Restaurant operator. Franchise Fee Deposit. At the time you sign a Development Agreement, you must pay us a deposit on the franchise fees to be incurred under the Development Agreement. The franchise fee deposit amount required equals $10,000 for each of the Restaurants you will develop during the “initial development periods.” We allocate the franchise fee deposit equally toward the $35,000 franchise fee due for each Restaurant you open during the initial development periods of the Development Agreement, provided you open such Restaurants on a timely basis. (Development Agreement, Section 4.1) Initial Franchise Fee. You must pay a franchise fee of $35,000 for each Restaurant you open during the initial development periods of the Development Agreement. As noted above, we allocate the franchise fee deposit equally toward the $35,000 franchise fee due for each Restaurant you open during the initial development periods of the Development Agreement, provided you open such Restaurants on a timely basis. If there is a transfer between existing franchisees, we may reduce and defer the initial franchise fee when the selling franchisee has a term left on its existing franchise agreement(s). The franchise fee for each Restaurant opened during a subsequent development period of the Development Agreement will equal the standard Restaurant franchise fee in effect at the time the respective Franchise Agreement is issued. You must pay the balance of the franchise fee for each of the Restaurants as follows: one-half when you sign the Franchise Agreement for the Restaurant and the remaining balance 14 days before you are scheduled to open the Restaurant. Range and Timing of Payment of Initial Fees. During the fiscal year ended December 31, 2017, we did not charge any applicant’s fees; we deferred the payment of the $10,000 franchise fee deposit to the date that we approve a site instead of upon execution of the Development Agreement; and we deferred the payment of the $35,000 initial franchisee fee to a later date instead of prior to the opening of the Restaurant. Except as stated above, the initial fees are the same for all franchisees subject to this offering and are nonrefundable.

Financing

We do not offer direct or indirect financing. We do not guarantee your note, lease or obligation.

Franchisee Revenue and Profit

This sales information was derived from the sales at the 1,772 franchised Restaurants that were in operation for the full fiscal year 2017. Of the 1,772 Restaurants included in this survey, 788 Restaurants (44.5%) attained at least the stated average sales. Written substantiation for the financial performance representations will be made available to you upon reasonable request. Some outlets have earned these amounts. Your individual results may differ. There is no assurance that you will achieve the stated results. Please carefully read all of the information in these financial performance representations, and the notes following the charts, in conjunction with your review of the historical data. Other than the preceding financial performance representations, we do not make any financial performance representations about a franchisee’s future financial performance or the past financial performance of company-owned or franchised outlets. We also do not authorize our employees or representatives to make any such representations either orally or in writing. If you are purchasing an existing outlet, however, we may provide you with the actual records of that outlet. If you receive any other financial performance information or projections of your future income, you should report it to the franchisor's management by contacting Scott Gladstone, Vice President, Strategy and Off-Premise, 450 North Brand Boulevard, 7th Floor, Glendale, California 91203-4415, (818) 240-6055, [email protected], the Federal Trade Commission, and the appropriate state regulatory agencies.