Applebee’s Franchisee Reaps Benefits of Favorable Market, Business Relationship

SCOTTSDALE, Ariz. - The sale-leaseback trend continues to grow as companies realize it to be a favorable financial tool and one that is going to continue through 2007. Capitalizing on the benefits of sale-leaseback financing, GE Capital Solutions, Franchise Finance provided one of the original Applebee’s franchisees, with which it has worked for more than a decade, with funding on 33 properties in seven states. AppleGrove Restaurants received $87 million from the lender, continuing a long-standing, successful relationship.

“This is the proverbial win-win situation for both parties,” says Robert Daniel, vice president, franchise finance, GE Capital Solutions, Franchise Finance. “It contributes to our growth in a strong franchise system with great assets. Furthermore, it underscores the value of the relationships we have with our customers, and AppleGrove is one of the preeminent Applebee’s franchisees in the country.”

The funding allows Atlanta-based AppleGrove to reduce its debt and gain capacity for future growth. The sale-leaseback covers 33 locations in Georgia, Alabama, Colorado, New Mexico, Oregon, Washington, and Idaho.

“GE Capital Solutions, Franchise Finance helped us decide on the right direction. They recognized the market is ripe for sale-leasebacks and created a package that met our needs,” says Mike Rummel, CFO, AppleGrove. “Thanks to their help, we now have an increased capability to grow, due to improved cash flow.”

Daniel agreed that the time was right to incorporate sale-leasebacks in the deal, citing the ability of franchisees to free up capital, while receiving favorable interest rates from investors.

“AppleGrove is using this sale-leaseback to help redefine their balance sheet and position themselves to look at growth opportunities. The timing of this deal works well with management’s long-term strategies.”

With more than two decades of experience, GE Capital Solutions, Franchise Finance serves more than 6,000 customers worldwide, offering a wide variety of financing solutions, including funding for: Refinancing, reimaging, acquisitions, and new construction. The lender specializes in financing the restaurant, hospitality, branded beverage, and auto-aftermarket industries.