Applebee's in the UK - Can You Start a Franchise?

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Applebee's in the UK - Can You Start a Franchise?

Applebee’s is a US institution and an excellent investment opportunity in its home market. However, the chain is yet to make it to the UK. Here, we explore the history of the brand, its franchising structure, and whether investment opportunities are likely to arise soon.

What is Applebee’s?

Applebee’s is a US-based restaurant chain that specialises in the casual dining experience and offers a wide range of popular dishes, including pasta, salads, and burgers. The restaurant’s signature dish is its famous riblets. The vast majority of Applebee’s restaurants have an alcohol licence and operate a bar area alongside the traditional dining space. The only exception to this practice is in those areas where the sale of alcohol is prohibited by law.

The chain now operates approximately 1,950 restaurants across 14 countries. Though the vast majority of these are situated within the United States, Applebee’s also has restaurants in Brazil, Canada, much of Central America, Mexico, Indonesia, and some Middle Eastern nations, too. This global presence has resulted in it becoming one of the most sought-after franchises on the market. Applebee’s incentivise international growth by offering highly lucrative multi-unit franchising agreements to those who can bring the brand to an entirely new market.

A brief history of Applebee’s

Compared to many of its competitors, Applebee’s is a relatively young business. However, this hasn’t prevented it from establishing itself as a favourite amongst US diners. Launched by Bill and T.J. Palmer, in 1980, the first Applebee's restaurant was in Decatur, Georgia. This location proved exceptionally successful, and the pair quickly moved to open a second restaurant in Georgia. Upon setting up this second branch, the W.R. Grace and Company attempted to purchase the restaurants. The sale proceeded on the understanding that Bill Palmer was made President of the Applebee's division that the new owners would establish.

Palmer directed the business through a period of early growth and was responsible for perfecting the highly-successful franchise model utilised by the company. He also opted to become a franchisee and opened his first restaurant in 1985. More than 30 years later, he now owns over 35 Applebee's restaurants. The late ‘80s and ‘90s were periods of considerable change for the business, as the owners rebranded in an attempt to give the restaurant a friendlier, neighbourhood atmosphere.

In 2007, Applebee’s was bought out for a staggering $2.1 billion by IHOP Corp, who operated the IHOP restaurant brand. This merger resulted in the creation of the largest full-service restaurant company in the world. IHOP Corp rebranded itself as DineEquity and announced that it would begin the process of franchising out Applebee’s 500 US-based, company-owned restaurants.

Who is in charge at Applebee’s?

At the top of the Applebee’s hierarchy is its president, John Cywinski. He has held the position since March 2017 and before this worked for Brinker International, a hospitality company that owns the Chili's and Maggiano's Little Italy brands. However, at the head of Dine Brands Global Inc (formerly DineEquity) is the organisation’s CEO, Stephen Joyce. Having previously worked for Marriot International and having gained experience in the hospitality industry, he has now been tasked with winning over the millennial crowd and securing the brands future. This is a considerable challenge, as Applebee’s has always been a favourite of families and older generations and is not considered a particularly trendy brand by younger generations.

How is Applebee's performing financially?

Though the last ten years have not been easy for Applebee’s, 2017 was an excellent year for the chain, and its financial performance suggests that a reversal in fortunes may be on the cards. Sales over the last year rose by 3.3%, and the business generated revenue amounting to around $2.5 billion. Moves to attract a younger audience, such as improving takeaway facilities and launching low-price drinks nights, have ensured that an entirely new generation of diners is beginning to take the chain seriously, while its traditional customer base still values the restaurant's affordability.

Do Applebee’s offer franchising opportunities?

Even though many of its restaurants were historically company owned and operated, Applebee’s has always offered franchising opportunities. Its early business model was built entirely upon the franchising system. With Dine Brands having consumed control of the brand, the company is pushing for a return to greater franchising and is even off-loading a large percentage of its company managed stores to new and existing franchisees. Franchising has also been a useful tool when it comes to expanding internationally, and the company has struck many master franchising deals to introduce the brand to new markets.

Applebee’s restaurant UK

There are currently no Applebee's restaurants in the UK, and there appear to be no plans to launch the brand in this market anytime soon. This is largely because the casual dining market in the UK is already saturated and US-based brands are wary of overstretching their reach by attempting to crack what is considered a particularly tough market.

Applebee’s UK locations

However, if Applebee's were to make a move into the UK market, it is highly likely that it would utilise the franchise model. This would require signing a master franchise agreement for the entire region. Though no such move is planned, any organisation interested in the possibility of licencing the Applebee's UK should contact Dine Brands or Applebee’s directly.

What are the franchised alternatives to Applebee’s?

If you have set your heart on owning a casual dining franchise, there are a number of alternatives available to investors. For instance, Loaded Burgers specialise in gourmet burgers at affordable prices. They require only £25,000 in investment, and a large portion of this can be financed through a major lender. Another good option is Hooters. With excellent brand recognition and a long history in the UK, Hooters is a safe bet when it comes to starting your own restaurant. Franchisees need to commit to opening at least three restaurants and will require a minimum of £1,500,000 in investment.

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