Court Sides Against Applebee’s Parent Company in Dispute Over Franchise Contracts

A Delaware bankruptcy court has sided against Applebee’s parent company, Dine Brands Global, in its efforts to take control of 160 units owned by RMH Franchise Holdings, who filed for bankruptcy protection in May.

According to Restaurant Business Online, Dine Brands argued that RMH Franchise Holdings franchise agreement had already been effectively terminated by then, but a judge ruled that Applebee’s corporate parent didn’t provide the required “clear and unambiguous notice” that it was terminating its franchise agreement with RMH prior to its bankruptcy filing

RMH Franchise Holdings, the 1,900-unit restaurant chain’s second-largest franchisee, can now use the units to appease creditors by either selling or shutting them. The franchisee currently owes Applebee’s International Inc. $14.2 million in royalty fees and advertising costs, the article noted.

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