Applebee's Item 19: $1.83M median across 1,178 franchised restaurants in fiscal 2025. Casual-dining AUV reality, year-one ramp, and how it compares to TGI Friday's and Chili's.
Quick answer Applebee's Item 19 reports a $1,829,472 median annual gross sales across 1,178 franchised restaurants in fiscal 2025. Total investment runs $245,000 to $3,055,924 with a tiered 4.5% to 7.0% royalty. Casual dining margins of 8-12% mean an $1.83M Applebee's yields less cash flow than an $1.83M QSR.
| Metric | Value |
|---|---|
| Sample size | 1,178 franchised restaurants |
| Sample criteria | All franchised restaurants |
| Reporting period | Fiscal year 2025 |
| Median annual gross sales | $1,829,472 |
| Total system units | 1,274 |
| Total investment (Item 7) | $245,000 - $3,055,924 |
| Royalty rate | 4.5% to 7.0% (tiered) |
The 1,178-restaurant sample is large and represents the bulk of the franchised system. Fiscal 2025 reporting is current. The investment range is unusually wide — $245K at the low end represents conversion of existing restaurant space (which Applebee’s heavily favors as new builds become rarer), while $3M+ at the upper end reflects ground-up construction with full Applebee’s prototype specifications.
The variable royalty (4.5%-7%) is structurally interesting. Most franchise systems run a flat royalty rate. Applebee’s tiered structure reflects development-agreement size — multi-unit operators committing to significant development pipelines pay at the lower end; single-unit and smaller operators pay at the upper end. The variability isn’t a negotiation lever for a typical single-unit buyer.
Buyers comparing Applebee’s $1.83M AUV to QSR brands like Wingstop ($2.0M) or Popeyes ($1.88M) miss the category dynamics. Casual dining and QSR produce meaningfully different operating economics:
| Metric | Casual dining | QSR |
|---|---|---|
| Labor cost % | 30-35% of revenue | 25-28% |
| Cost of goods % | 30-32% | 28-30% |
| Operating margin (mature) | 8-12% | 12-18% |
| AUV at break-even | ~$1.4M-$1.6M | ~$800K-$1.0M |
A mature Applebee’s at $1.83M of revenue typically produces $150K-$220K of operating cash flow at year-three steady-state — before debt service and franchisor distributions. A mature Wingstop at $2.0M of revenue typically produces $250K-$360K. The dollar gap matters significantly for buyers underwriting unit-level returns.
The historical reason for the margin compression in casual dining is operational: full-service restaurants run larger physical footprints (5,000-6,500 sq ft vs QSR’s 1,400-2,500 sq ft), employ more labor per dollar of revenue (full-service requires servers, bussers, hosts), and operate longer hours with more menu complexity. Each of those factors compresses margin relative to QSR.
For Applebee’s specifically, the brand has been refining the model — menu simplification, kitchen efficiency, off-premises (takeout/delivery) expansion — to improve unit-level margins. The fiscal 2025 disclosure reflects those refinements but doesn’t eliminate the structural category margin profile.
The publicly franchised casual-dining category has been under pressure for over a decade. Comparison snapshot:
| Brand | Status | Typical AUV | Investment |
|---|---|---|---|
| Applebee’s | Franchise dominant | $1.83M median | $245K-$3.06M |
| TGI Friday’s | Bankruptcy 2024, restructuring | ~$1.8M historical | varies |
| Chili’s | Mostly company-operated | ~$3M company-operated | n/a franchise |
| Olive Garden | Company-operated | n/a | n/a |
| Outback Steakhouse | Company-operated | n/a | n/a |
| IHOP | Franchise dominant | ~$1.4M-$1.7M | $1.5M-$3M |
A few things to note. Most major casual-dining brands operate company-store models, not franchise models — Chili’s, Outback, Olive Garden, Texas Roadhouse, Cheesecake Factory all run direct-operated systems. The franchise-dominant casual-dining category is essentially Applebee’s, IHOP, Denny’s, TGI Friday’s (post-bankruptcy), and a handful of smaller regionals.
The one franchised corner of casual dining that has kept expanding is the bar-anchored format, where alcohol carries a share of revenue that a family-dining menu cannot. The top sports bar franchises run medians from $1.30M at The Brass Tap to $5.49M at Twin Peaks, on investment ranges that overlap Applebee’s almost exactly.
That structural reality matters for buyers. The category as a whole has seen closures exceed openings for most years since 2018. Applebee’s has been a relative outperformer within the franchised casual-dining set, but the category-wide headwinds are real and not cyclical.
Casual dining ramps faster than membership-driven businesses but slower than QSR. A new Applebee’s in months 1-12 typically generates:
Most new restaurants land at 70-85% of system median in year one. Year two typically reaches the median. Markets with existing Applebee’s density ramp faster; greenfield markets (rare in 2026) ramp slower.
Conversion deals — taking over an existing restaurant space, often a closed competitor’s location — typically ramp faster than ground-up builds because the customer base is partially primed for the format. A conversion in a strong trade area can hit the system median in year one. Ground-up builds typically need 18-24 months.
For brand-specific cost detail, see the live Applebee’s franchise page. For broader category context, top franchise industries for 2026 and our food and beverage franchise investment guide.
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applebeesitem 19casual diningfranchise revenuefdd analysis
About this analysis The franchise data in this article is drawn from VetMyFranchise's structured analysis of 2,300+ Franchise Disclosure Documents filed with U.S. state regulators. See our data & methodology.
Applebee's most recent Item 19 reports a $1,829,472 median annual gross sales across 1,178 franchised restaurants for fiscal year 2025.
Casual dining restaurants have higher labor cost ratios (typically 30-35% of revenue vs QSR's 25-28%), higher cost of goods (30-32% vs QSR's 28-30%), and lower operating margins (typically 8-12% vs QSR's 12-18%). An $1.83M Applebee's produces meaningfully less operating cash flow than an $1.83M Wingstop. The categories aren't comparable on AUV alone.
Applebee's $1.83M median is comparable to other established casual-dining brands. TGI Friday's has historically run similar AUVs; Chili's runs higher AUVs but is mostly company-operated. The franchised casual-dining category has been challenged for a decade with closures exceeding openings system-wide across most brands.
The 4.5%-7% range reflects structural tiering in development agreements rather than negotiable single-unit rates. Most new single-unit franchisees pay at or near the upper end of the range. Multi-unit operators with significant development commitments can negotiate into the lower end. The variability is structural disclosure, not sales-channel discount.
Year-one new-build revenue typically lands at 70-85% of the system median — $1.28M-$1.55M. Casual dining ramps faster than membership-driven businesses but slower than QSR. Most new restaurants reach steady-state by year two.
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