Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

  • Anytime Fitness
  • CruiseOne
  • Firehouse Subs
  • Jimmy John's
  • Massage Envy
  • Menchie's
  • Orange Leaf Frozen Yogurt
  • Planet Fitness
  • The UPS Store
  • Yogurt Land
  • And Hundreds More...

No, thanks. I'm not interested in uncovering the actual earnings of hundreds of franchises at this time.

Considering an Applebee’s Franchise? Don’t Overlook These 31 Important Franchise Fees

by Franchise Chatter on September 19, 2017

in Casual-Dining Restaurant Franchise, Franchise Fees, Restaurant Franchise

Franchise Chatter Membership Information

Don't Invest in a Franchise Until You Check Out This List

Applebee's Ultimate Trio Photo by mooshee85

If you are considering an Applebee’s franchise, don’t get blindsided by these 31 important franchise fees (from the initial franchise fee, to the royalty fee, to 29 other fees found in Items 5 and 6 of Applebee’s 2017 FDD).

1.  Franchise Fee:  $35,000

  • You must pay a franchise fee of $35,000 for each Restaurant you open during the initial development periods of the Development Agreement.
  • If there is a transfer between existing franchisees, Applebee’s 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.

2.  Applicant’s Fee:  $15,000

  • 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.

3.  Franchise Fee Deposit:  $10,000 for each of the Restaurants you will develop

  • At the time you sign a Development Agreement, you must pay Applebee’s 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.”
  • Applebee’s allocates 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.
  • 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.
  • Applebee’s does not refund the franchise fees or the franchise fee deposit.
  • Except as stated above, franchise fees are the same for all franchisees subject to this offering and are nonrefundable.

4.  Royalty:  4% of Gross Sales. This percentage can be increased by Applebee’s after January 1, 2020.

  • Due Date:  Payable monthly on the 12th day of the next month.
  • “Gross Sales” includes all revenues from the Restaurant. “Gross Sales” does not include sales or use tax.

5.  Advertising (National Advertising Fund):  currently, 3.25% of total Gross Sales. This percentage can be increased or decreased by Applebee’s at any time.

  • Due Date:  Same as Royalty.

6.  Cooperative Advertising:  minimum ½% of total Gross Sales. Any amounts paid to an advertising cooperative will reduce the amount required to be spent on Local Market Advertising on a dollar for dollar basis.

  • Due Date:  Applebee’s can require you to form, or you and another franchisee(s) in the same market can form, an advertising cooperative for a market to cooperatively spend the local advertising fee noted above.
  • Applebee’s has no vote in these cooperatives.

7.  Late Fee:  up to 18% interest or highest rate allowed by law

  • Due Date:  Immediately.
  • Payable if royalty or advertising fee or other amounts due to Applebee’s are not paid on time.

8.  Campaign/Menu Training:  $3 to $5 per campaign/menu implementation

  • Due Date:  30 days after billing.
  • A training DVD is supplied with each campaign and menu implementation.

9.  Neighborhood University:  approximately $6 per disk; approximately $36 per year per Restaurant for cost of shared maintenance and updates

  • Due Date:  30 days after billing.
  • Initial program is free.
  • Maintenance and updates are subject to change based on actual shared maintenance cost.

10.  Supplier/Distributor Approval:  costs of sample testing, plus other actual costs, such as facility inspection

  • Due Date:  30 days after billing.
  • Payable if you want Applebee’s to approve a new supplier, and it requires a test of the supplier’s products and/or inspection of the supplier/distributor.
  • Applebee’s testing may include sensory panels, audits, and consumer panels.

11.  Extra Manuals:  $5 to $250

  • Due Date:  30 days after billing.
  • Payable if you want extra Manuals, training materials, and the like. Applebee’s makes the first set available to you for free.

12.  Audit Fee (Balance Sheet and Profit & Loss Preparations):  amount paid by Applebee’s. Re-Audit Fee is $285.

  • Due Date:  30 days after billing.
  • Payable if you fail to give Applebee’s annually a balance sheet and profit & loss statement and Applebee’s pays to have your books audited.

13.  Compliance Audit Fee:  cost of audit, plus interest on unpaid royalties

  • Due Date:  30 days after billing.
  • Payable if audit shows an understatement of at least 3% of Gross Sales for any month.

14.  Insurance:  cost of insurance and any late fee

  • Due Date:  30 days after billing.
  • Payable if you fail to insure your Restaurant and Applebee’s buys the insurance.

15.  National Gift Card Program Charges:  currently, 8.65% of the redeemed portion of gift cards sold in the national program, but the amount may change

  • Due Date:  Cost is recovered as part of the periodic electronic settlement process for sales and redemptions of gift cards.
  • Permits Applebee’s or its affiliate to recover cost incurred to operate the national gift card program (i.e., gift cards sold through channels other than the Restaurant).

16.  Site Development:  $150 to $450

  • Due Date:  30 days after billing.
  • Required demographics package ($150); Site Processing Fee ($300)

17.  Renewal of Franchise Agreement:  currently, $3,500 each five-year renewal period

  • Due Date:  On expiration of the Franchise Agreement after its initial 20-year term.
  • If you are in compliance, you may renew the Franchise Agreement for four five-year terms at 10% of the then-current franchise fee for each renewal period.

18.  Applebee’s POS Software License Fee:  Applebee’s POS license fee is currently $1,500 per site. This includes the AppleONE Point-of-Sale (A1POS) and AppleONE Cards (A1Cards) software components.

  • Due Date:  30 days after billing for software purchased from Applebee’s.
  • Applebee’s currently requires you to install the hardware and software necessary for Applebee’s Point-of-Sale (“POS”) system. The hardware, installation, maintenance, and operating system must be purchased from an approved supplier.
  • Hardware and operating systems must be Payment Card Industry (PCI) compliant.

19.  Applebee’s POS Software Maintenance Fee:  an annual maintenance fee of $825 per Restaurant is currently charged for the Applebee’s POS and A1 Cards software

  • Due Date:  30 days after billing.
  • This fee is paid in exchange for the right to receive all upgrades to the A1POS and A1Cards software components.

20.  Gateway Processing Fees:  an annual subscription fee of $400 per Restaurant is currently charged for ongoing processing services within A1Cards. Additional fees for processing over dial-up may also apply and will vary based upon usage.

  • Due Date:  30 days after billing.
  • This fee covers transaction processing costs to route transactions from the POS to the credit or gift card provider. These fees are in addition to any processing fees charged by your credit card and gift card processors.

21.  DineEquity Restaurant Technology Support Center (Help Desk):  annual costs currently range from $1,200 to $1,700 per Restaurant, based on actual products supported. Additional services, such as network consulting, technology rollouts, and menu and software configuration, are available for additional project fees.

  • Due Date:  30 days after billing.
  • Support services must be provided by Applebee’s, its affiliate, or an approved supplier.
  • Project fees are determined based on effort and duration of the specific request.

22.  De-identification After Termination:  reimbursement of costs

  • Due Date:  On demand.
  • Payable if the Franchise Agreement has ended and you do not remove the trade name and decor items and repaint, and Applebee’s spends the money to do these things.

23.  Personal Property Removal Fee:  reimbursement of costs

  • Due Date:  30 days after billing.
  • Payable if you lease your Restaurant site, your Franchise Agreement has ended, you fail to remove your personal property, and Applebee’s takes over the Restaurant site but does not buy the personal property.
  • If Applebee’s pays to remove the property, you must reimburse it.

24.  Transfer Fee:  $2,500 per Agreement

  • Due Date:  Before the closing of the transfer.
  • Payable when you transfer ownership of your Restaurant(s).

25.  Indemnification:  amount of costs

  • Due Date:  30 days after billing.
  • Payable if Applebee’s has costs for third-party claims (including attorneys’ fees) from the operation or condition of your Restaurant.

26.  Unsuccessful Party Legal Fees:  amount of fees

  • Due Date:  On demand.
  • Payable if you are the unsuccessful party in a lawsuit with Applebee’s. In this case, you pay Appebee’s expenses and legal fees.

27.  Team Member Hiring (“Poaching”):  with consent, reimbursement of up to 50% of a team member’s annual salary. Without consent, three times annual salary of employee plus costs and attorneys’ fees.

  • Due Date:  30 days after billing. Payable if you hire or seek to hire a team member of Applebee’s or another franchisee in a managerial position.

28.  Guest Relations Chargeback:  reimbursement of Applebee’s costs

  • Due Date:  30 days after billing.

29.  Government Relations Fund:  $200 per Restaurant per year recommended

  • Due Date:  30 days after billing.
  • Joint Voluntary IHOP/Applebee’s fund to support industry-related lobbying activities.

30.  Creative Services Graphic Design Jobs:  $75 per hour

  • Due Date:  30 days after billing.
  • Payable if you request Applebee’s or an affiliate to customize local advertising.

31.  On-Line Ordering:  $56 per month

  • Due Date:  On demand.

Franchise Matching Quiz

Franchise Matching Quiz

{ 0 comments… add one now }

Leave a Comment

Previous post:

Next post: