Applebee's Franchisee With 50 Locations Files Chapter 11, Dine Brands Steps In

Neighborhood Restaurant Partners currently operates 53 Applebee's in Alabama, Florida and Georgia. On March 25, the Atlanta-based franchisee filed for Chapter 11 protection in the U.S. Bankruptcy Court for the Northern District of Georgia, and by the time the petition hit the docket, the company had already shuttered 14 of its restaurants and run out of options.

Court documents list $1 million to $10 million in assets against $10 million to $50 million in liabilities, with more than $13 million owed to lender Equity Bank alone. Most of the restaurants were acquired in 2012. What followed was a decade-plus cycle that, according to court filings, went from growth to instability around 2015 and then into something more serious as inflation took hold.

The documents cite rising costs and a pullback in consumer spending for its challenges, which forced the closure of nine restaurants last year and five more earlier this year. For the workers in those restaurants, each closure meant an abrupt end to their shifts, their regulars and, in many cases, their income. The company sought to sell those assets but was unable to find a buyer. NRP had hired Citizens Bank to run a sale process for its assets, leases and franchise agreement last year; after four or five months of marketing, no deal materialized.

In February, NRP reached a tentative agreement with Applebee's parent Dine Brands that would see the franchisor take control of the business. NRP's worsening financial situation forced it to file for bankruptcy before the two sides could get a deal done, but Applebee's will act as the stalking-horse bidder in the case and is expected to complete the acquisition by mid-May.

In a statement, Dine CEO and Applebee's President John Peyton said that while individual franchisees may face challenges from time to time, the Applebee's brand remains strong overall. "Serving as the stalking horse bidder gives us the opportunity to be strategic and selective in supporting the long-term health of the system and this portfolio of restaurants has historically had solid performance," he said.

The move fits a pattern Dine Brands has been building deliberately. At the end of 2025, Dine Brands, which includes IHOP and dual-branded IHOP/Applebee's restaurants, operated 72 company-owned restaurants, or about 2% of the system. That number was essentially zero not long ago. In March 2025, the company took over nearly 50 restaurants from franchisees, allowing it to expedite remodels and, in Peyton's words during the company's fourth quarter 2024 earnings call, "put its money where its mouth is." Last month, he told analysts that the chain's company-owned portfolio "remains instrumental in strengthening brand performance and supporting the overall health of our system."

NRP is not the first large Applebee's franchisee to collapse under the weight of debt and declining traffic. At least two other Applebee's franchisees, Louisiana Apple and Apple Central KC, have filed for bankruptcy in recent years, accounting for a total of 22 locations. In 2018, RMH Franchise Holdings, then the chain's second-largest franchisee with 146 locations, also filed for Chapter 11. Dine Brands had taken legal action against RMH for unpaid royalties before the court sided with the franchisee and allowed it to keep operating during restructuring. That case eventually settled, with RMH required to pay all past-due royalties and advertising fees, and Dine Brands ultimately acquired those restaurants in a transaction that closed December 12, 2018.

In 2025, a combined 110 Applebee's and IHOP locations closed, including 13 franchise-owned units in the fourth quarter. The company expects to close around five to 15 Applebee's restaurants in 2026. The NRP portfolio, now heading into a court-supervised sale process with Dine Brands holding the opening bid, will determine whether those 53 remaining Southeast locations become part of the franchisor's growing company-owned footprint or get absorbed through a competing offer at auction.