The second-biggest Applebee’s franchisee yesterday squared off briefly in U.S. Bankruptcy Court in Wilmington, Del., with the chain that has sought to end their partnership, WSJ Pro Bankruptcy reported. Atlanta-based RMH Franchise Holdings Inc., owner of 159 Applebee’s Neighborhood Grill & Bar restaurants in 15 states, sought chapter 11 protection May 8. RMH in its filing had said that its parent had unexpectedly sought to terminate the franchisee’s rights, but on Tuesday its parent presented a different version of events, saying the franchisee had been in default on its royalties since June. The franchisee, whose restaurants represent slightly less than 10 percent of all Applebee’s locations, said that it had been negotiating with its parent, Applebee’s International Inc., since last year, but that a day before the bankruptcy filing, the tenor of the talks changed, with Applebee’s International “unexpectedly” saying it planned to “issue a notice of termination” of the franchisee’s rights to 37 locations in Arizona and Texas. In response to the parent’s “unexpected threat and to further address various operational challenges,” RMH sought protection from creditors by filing for chapter 11.
