A group of Texas restaurant franchisees are suing Applebee’s corporate in Kansas District Court after the latter greenlit a series of new concepts that are allegedly hurting the former’s bottom lines.

Apple Texas Restaurants, Inc., and Apple Houston Restaurants, Inc., filed the original lawsuit against Applebee’s Franchisor LLC and Applebee’s International, Inc., on March 19 in Kansas City, Kan. An amended version of their complaint, which included new information, was filed April 17. The plaintiffs in this case are subsidiaries of World of Apple, LLC, which is owned by Sunil D. Dharod. If the last name sounds familiar, it’s because Sunil is also a member of the Dharod family that owns SSCP Management, a large restaurant operator out of Dallas.

The case is being heard out of Kansas because both parties had decided in their contracts that any legal dispute between the two would take place there.

According to the lawsuit, Apple Texas and Apple Houston allege Applebee’s is in breach of their 2008 franchise agreement and a 2012 development agreement. Applebee’s is accused of allowing competing locations of their restaurants to operate in Apple Texas’ and Apple Houston’s agreed-upon exclusive areas, including counties in and around Austin, the Dallas-Fort Worth area, Houston and Tyler.

Specifically, the purported offending locations are dual concepts: Applebee’s and IHOP restaurants joined at the hip. According to the lawsuit, Apple Texas and Apple Houston claim Applebee’s has allowed other franchisees to operate these dual concepts in said exclusive zones. 

Applebee’s has also allegedly boasted these dual concepts have outperformed their standalone locations, with new locations planned for Euless, Anahuac, and Lancaster. FSR Magazine reported in February that the dual concepts have achieved “1.5 to 2.5 times higher revenue than single-brand locations and come with payback periods of less than three years.”

According to the lawsuit, Apple Texas and Apple Houston learned of Applebee’s’ plans in 2025. When confronted, Applebee’s said it was, in fact, Apple Texas and Apple Houston that were in breach of the contract. The parent company argued the franchisees no longer held exclusive rights to their territories because they failed to develop the required number of new restaurants in said territories, closed underperforming locations without replacing them, and that a landlord had locked them out of an individual restaurant due to an unspecified dispute.

Steakhouse vs. Bar & Grill

Additionally, according to the lawsuit, Applebee’s said Apple Texas and Apple Houston’s owner, Dharod and SSCP Management, violated the franchise and development agreements when they purchased Logan’s Roadhouse from SPB Hospitality in March 2026 for an unspecified amount of money. Applebee’s argued that Logan’s is a competitor and thus violated the non-compete clause. Apple Texas and Apple Houston have argued that Logan’s is not a competitor because it’s an entirely different concept.

“Logan’s Roadhouse operates under a vastly different model than Applebee’s,” the complaint read. “Logan’s is a suburban or rural steakhouse restaurant that typically closes at 10:00 p.m. or 11:00 p.m., whereas Applebee’s is a bar and grill that remains open until midnight or 2:00 a.m.”

Apple Texas and Apple Houston alleged in their complaint that Applebee’s’ accusations over Logan’s was retaliation because it was only brought up after they had initially sued in March.

Apple Texas and Apple Houston want the courts to declare the original 2008 franchise agreement is still in effect, the 2012 development agreement is still in effect, and the Logan’s Roadhouse purchase does not violate any non-compete, and seeks damages. Previously, Apple Texas and Apple Houston were seeking injunctions and a temporary restraining order, but those were later rescinded.

Applebee’s has yet to issue an answer in the case or a motion to dismiss, but they have gone through the motions to bring in out-of-state counsel. Thus, the case is ongoing. Parent company Dine Brands declined to comment on the record. Chron has reached out to SSCP.