Tag Archives: franchisee

Second-Largest Applebee'' s Franchisee Files for Bankruptcy Restructuring

Dealing with a potential loss of a few of its franchise rights, RMH Franchise Holdings Inc., the second-largest franchisee of Applebee’s dining establishments, has filed a petition for relief under Chapter 11 in the Bankruptcy Court.

Locateded in Atlanta, RMH operates 159 restaurants throughout 15 states that combined represent slightly less than 10 percent of all Applebee’s places.

“Substantial obstacles come across by the Applebee’s brand name usually, and particular managerial decisions made on behalf of it by its franchisor, Applebee’s International Inc. have adversely affected the debtors’ company operations and left them facing near-term liquidity issues,” Mitchell Blocher, primary monetary officer of RMH argued in insolvency court filings.

Applebee’s International is a division of openly traded Dine Brands Global.

Blocher stated RMH had remained in extended negotiations on a number of concerns relating to the operation of its company. Nevertheless, just prior to the insolvency filing this week, Applebee’s all of a sudden indicated that it planned to release a notice of termination of RMH’s franchise rights associating with locations in Arizona and Texas.

RMH operates 38 dining establishments in the two states.

Adding to the issues, the so-called “brass-and-plant” casual dining restaurant concept has seen much better days. Average yearly incomes for all franchised locations have actually been on a fairly steady decrease: $2.35 million in 2015, $2.18 million in 2016, and $2.09 million in 2015, inning accordance with Dine Brands information.

Nevertheless, the brand name has begun to publish a modest recovery of late. Applebee’s domestic same-restaurant sales increased 1.3% for the 3 months ended Dec. 31, 2017 from the very same duration in 2016, the first quarterly increase in two and a half years.

Particularly for RMH, for the trailing 12 months ending March 31, 2018, RMH generated $375.9 million in gross profits, and $12.6 million of operating profits, a drop of roughly 60% in two years from peaks of $431.1 million and $31.4 million.

It has actually not assisted that Applebee’s has actually had 4 presidents considering that the start of 2014, each being available in with a different set of efforts for franchisees, and which required additional capital expenditures from franchisees, Blocher said.

Dine Brands representatives informed CoStar, “Over the in 2015, we have worked along with our franchisees to return Applebee’s to favorable traffic and sales while consistently out-performing the [casual dining restaurant] classification. While this scenario is unusual and unfortunate, we’re pleased with our collective development at Applebee’s and very optimistic about our future, and the future of our franchisees. However, we can’t discuss particular litigation.”

Dine Brand has actually formerly reported that it is continuing to selectively refine its franchisee portfolio by shifting assets to other existing franchisees, along with some franchisees brand-new to the system. The most current example of this was the acquisition of a small number of dining establishments in South Dakota, Nebraska and Iowa by the Legacy Apple, one of its existing franchisees.

The business has actually reported that it anticipates making a handful of additional deals this year.

Last summer season, RMH employed Hilco Realty to renegotiate and/or amend leases to get lower rents, or negotiate lease terminations where proper. There has actually been no filings yet in the insolvency case concerning possible store closings.

Visitor column: The best ways to prepare to end up being a franchisee

While there many methods to become a business owner, entrepreneurs can delight in special chances by acquiring a franchise.

Running regional franchises of a bigger business has numerous advantages, consisting of bring in clients with brand acknowledgment, taking advantage of the business’s marketing efforts, and utilizing the company’s proven, structured operating procedures. Depending on the business, running a franchise also can include getting in-depth training that can be beneficial for any sort of business enterprise.

Becoming a franchise owner, however, frequently is not an easy task, and there are lots of elements to think about when pursuing this course.

■ Pick a brand that interests you. Running a company can be life-consuming, so it is important you enjoy your company so you don’t end up being miserable or burned out.

■ Examine the threat of various franchises. Some smaller business might be less expensive to invest in, however they may not provide as lots of advantages as a larger corporation with national or global resources. Elements that can affect danger include your liability for the franchise home, how renowneded the business’s brand is in your area and just how much training and additional support the brand will provide when you become an owner.

■ Identify programs to quicken the process. Some business provide programs that can accelerate the process of ending up being a franchise owner, specifically if you already have a connection to the business. For example, McDonald’s offers training programs for team members to work their method up to owner-operator positions. It also provides a Next Generation program for the children or partners of McDonald’s franchise owners to end up being owner-operators.

■ Research the application procedure and financial requirements. Some companies have highly competitive application procedures for individuals outside of the business, which can consist of rigorous monetary requirements. McDonald’s application requirements usually consist of showing liquid assets of at least $750,000.

■ Full corporate training. It is hard to run a franchise without a comprehensive understanding of the brand’s operations. A lot of companies require future franchise owners to undergo training.

At McDonald’s, training consists of working for totally free at a restaurant and serving in every position to extensively comprehend every element of the company. I worked 39 hours a week for 15 months.

■ Join a relevant association. The McDonald’s Greater Las Vegas Operator Association includes 25 franchisees who possess almost 80 percent of McDonald’s 100-plus Southern Nevada restaurants.

Kellie Vander Veur is an owner-operator of a McDonald’s franchise.