Applebee’s Tenant Overview

Net Lease Advisor Tenant Applebees


  • Large land parcel
  • Rental increases throughout primary term of lease
  • Absolute NNN leases


  • Tough sector during recession
  • Credit of tenant
  • Franchisee assignment clause

Earnings Highlights

Earnings Summary

Tenant Description

Applebee's is a leader in the casual dining market, and has become an increasingly popular net lease investment property. In 2007, IHOP completed the purchase of the Applebee's chain, creating the largest full-service restaurant company in the world. In 2018, the parent company of both chains rebranded to become Dine Brands Global (NYSE: DIN).

After IHOP's acquisition of Applebee's, the new parent company Dine Brands Global facilitated one of the largest sale leaseback transactions in terms of the number of retail locations sold, which has brought substantial supply to the net lease marketplace. These Dine Brands Global sale leaseback locations have all signed identical leases featuring 20-year initial terms, 2% annual rent bumps during the first five (5) years, then adjusting to a 10% rent increase every five (5) years thereafter. While these sites are all corporately guaranteed, the lease provides an assignment clause that allows the parent company to assign the lease to a franchise operator at any time, so long as the franchisee meets certain criteria. This assignment clause has forced investors to analyze these properties as if they were guaranteed by a franchisee versus corporate.

For real estate, Applebee's requires 1.0 - 1.5 acres of land with a 5,500 square foot building, often situated as a pad to larger regional shopping centers. While the quality of the underlying real estate is important, reviewing individual unit sales data will provide the best clarity of operational strength and potential long-term viability. Key factors to consider are credit strength of franchisee given assignment, store sales data, and the location of the real estate.

Founded nearly three decades ago on the principles of exceptional value and family fun, Applebee's Services, Inc., operates what is today the largest casual dining chain in the world. This prominent eatery draws people of all ages and lifestyles with its fun, family-friendly atmosphere and signature bar and grill menu.

Applebee's continues to further differentiate itself with innovative attractions, like the popular Carside to Go service available at many of its restaurants. Currently, there are 1,936 Applebee's restaurants operating system-wide in all 50 states, 15 international countries and 2 US territories.

Average Cap Rate
Trailing 12-month average
Average Property & Lease
Average Sale Price $2,858,981
NOI $186,649
$/Square Foot $572 - $715
Building SF 4,000 - 5,000
Lot Size 0.5 - 1.5 acres
Lease Term 15 - 20 years
Escalations Varies
Stock Symbol DIN
Credit Rating
Moody's N/A
Average Cap Rate Trend
Rates reflect year-over-year comparison
Recent Sales Comps
West Mifflin, PA 6.35%
Reynoldsburg, OH 7.00%
Walled Lake, MI 7.28%