AMENDMENT NO. 2


                                       TO


                        3-YEAR REVOLVING CREDIT AGREEMENT


                            Dated as of July 19, 2004


         THIS AMENDMENT NO. 2 TO 3-YEAR REVOLVING CREDIT AGREEMENT ("Amendment")
is made as of the  "Amendment  Effective  Date" (as defined  below) by and among
APPLEBEE'S  INTERNATIONAL,  INC. (the  "Borrower"),  the financial  institutions
listed on the signature pages hereof as lenders (the  "Lenders"),  BANK ONE, NA,
individually as a Lender, as LC Issuer,  Swing Line Lender and as administrative
agent (the  "Administrative  Agent") for the Lenders  under that certain  3-Year
Revolving  Credit  Agreement  dated as of  November  5,  2001 by and  among  the
Borrower,  the Lenders and the  Administrative  Agent (as  amended,  the "Credit
Agreement").  Defined terms used herein and not otherwise  defined  herein shall
have the meaning given to them in the Credit Agreement.

                                   WITNESSETH

         WHEREAS,  the Borrower,  the Lenders and the  Administrative  Agent are
parties to the Credit Agreement;

         WHEREAS,  the  Borrower  has  requested  certain  amendments  set forth
herein; and

         WHEREAS,  the Lenders  party  hereto and the  Administrative  Agent are
willing to agree to such extension  request and amend the Credit  Agreement,  in
each case on the terms and conditions set forth herein;

         NOW,  THEREFORE,  in consideration of the premises set forth above, the
terms  and   conditions   contained   herein,   and  other  good  and   valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Borrower,  the Lenders party hereto and the Administrative  Agent have agreed to
the following.

    1.   Amendments  to Credit  Agreement.  Subject  to the satisfaction  of the
conditions  precedent  set forth in  Section 2 below,  the Credit  Agreement  is
hereby amended as follows:

         1.1. Section  6.12 of  the  Credit  Agreement  is  hereby  amended  and
restated to read as follows.


         "6.12. Capital Expenditures.  The Borrower will not, nor will it permit
         any  Subsidiary  to,  expend  in  excess  of  an  aggregate  amount  of
         $125,000,000  (the "Base Amount") for Capital  Expenditures  during any
         fiscal year,  commencing with the fiscal year ending December 30, 2004;


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         provided that, if the aggregate amount of Capital  Expenditures  during
         any such fiscal year is less than the Base Amount (the difference being
         the  "Shortfall   Amount"),   then  the  permitted  amount  of  Capital
         Expenditures during the immediately  succeeding fiscal year shall be an
         amount equal to the Base Amount plus the Shortfall Amount."

         1.2. Section 1(d) of Schedule I to the Compliance Certificate set forth
as Exhibit B to the Credit Agreement is hereby amended by deleting the reference
to  "$100,000,000"  appearing  therein and  substituting  "125,000,000"  in lieu
thereof.

    2.   Conditions of Effectiveness. This Amendment shall become  effective and
be deemed  effective, if, and only if, and shall be  effective as of  date  upon
which, the Administrative  Agent shall have received each of the following (such
date, herein the "Amendment Effective Date"):

         (a)  duly executed signature  pages to this Amendment from the Borrower
    and the Required Lenders;

         (b)  a reaffirmation  from each of the Guarantors,  such  reaffirmation
    being attached hereto and made a part hereof; and

         (c)  such  other   documents,   instruments   and   agreements  as  the
    Administrative Agent may reasonably request.

    3.   Representations and  Warranties  of the Borrower.  The Borrower  hereby
represents and warrants as follows:

         (a)  This Amendment and the Credit Agreement as previously executed and
    as amended hereby,  constitute legal,  valid and binding  obligations of the
    Borrower and are  enforceable  against the Borrower in accordance with their
    terms.

         (b)  Upon the  effectiveness  of this  Amendment,  the  Borrower hereby
    reaffirms all covenants,  representations  and warranties  made by it in the
    Credit  Agreement and other Loan  Documents,  to the extent the same are not
    amended  hereby,  and agrees that all such  covenants,  representations  and
    warranties  shall be deemed to have been remade as of the effective  date of
    this Amendment.

         (c)  No Default or  Unmatured  Default has  occurred  and is continuing
    under the Credit Agreement.


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    4.   Reference to the Effect on the Credit Agreement.

         (a)  Upon the  effectiveness of Section 1 hereof, on and after the date
    hereof,  each  reference  in  the  Credit  Agreement  to  "this  Agreement,"
    "hereunder,"  "hereof," "herein" or words of like import shall mean and be a
    reference to the Credit Agreement, as amended hereby.

         (b)  Except as specifically amended above, the Credit Agreement and all
    other  documents,  instruments and agreements  executed and/or  delivered in
    connection  therewith shall remain in full force and effect,  and are hereby
    ratified and confirmed.

         (c)  The execution,  delivery and effectiveness of this Amendment shall
    not operate as a waiver of any right,  power or remedy of the Administrative
    Agent or any of the Lenders, nor constitute a waiver of any provision of the
    Credit Agreement or any other documents, instruments and agreements executed
    and/or delivered in connection therewith.

    5.   Governing  Law.  This  Amendment  shall be governed by and construed in
accordance with the internal laws (as opposed to the conflict of law provisions)
of the State of Illinois.

    6.   Headings.  Section  headings in this Amendment are included  herein for
convenience  of reference only and shall not constitute a part of this Amendment
for any other purpose.

    7.   Counterparts.  This  Amendment  may be  executed  by one or more of the
parties to the Amendment on any number of separate  counterparts and all of said
counterparts  taken  together  shall be  deemed to  constitute  one and the same
instrument.  A facsimile signature page hereto sent to the Administrative  Agent
or the  Administrative  Agent's  counsel  shall be  effective  as a  counterpart
signature  provided each party executing such a facsimile  counterpart agrees to
deliver originals to the Administrative Agent thereof.

                            [Signature Pages Follow]


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         IN WITNESS  WHEREOF,  this Amendment No. 2 has been duly executed as of
the day and year first above written.


                                      APPLEBEE'S INTERNATIONAL, INC.
                                      as Borrower

                                      By:/s/Rebecca R. Tilden
                                         -------------------------
                                    Name: Rebecca R. Tilden
                                   Title: Vice President

                                      BANK ONE, NA, individually as a Lender, as
                                      LC Issuer, Swing Line Lender and as
                                      Administrative Agent

                                      By:/s/ William J. Oleferchik
                                         -------------------------
                                    Name: William J. Oleferchik
                                   Title: Managing Director, Capital Markets




                                      SUNTRUST BANK, individually as a Lender
                                      and as a Syndication Agent


                                      By:/s/ Susan M. Hall
                                         --------------------------
                                    Name: Susan M. Hall
                                   Title: Managing Director

                                      U.S. BANK NATIONAL ASSOCIATION,
                                      individually as a Lender and as a
                                      Syndication Agent


                                      By:/s/ John P. Mills
                                         --------------------------
                                    Name: John P. Mills
                                   Title: Vice President


                       Signature Page to Amendment No. 2
                                   July 2004
                         Applebee's International, Inc.


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                                      BANK OF AMERICA, N.A., individually as a
                                      Lender and as a Documentation Agent


                                      By:_______________________________________
                                    Name:
                                   Title:

                                      By:_______________________________________
                                    Name:
                                   Title:

                                      FLEET NATIONAL BANK, individually as a
                                      Lender and as a Documentation Agent


                                      By:_______________________________________
                                    Name:
                                   Title:

                                      JPMORGAN CHASE BANK as successor to
                                      THE CHASE MANHATTAN BANK, as a Lender

                                      By:/s/ William P. Wallace
                                         -------------------------------
                                    Name: William P. Wallace
                                   Title: Vice President


                                      ROYAL BANK OF CANADA, as a Lender

                                      By:/s/ Gordon MacArthur
                                         ---------------------------------
                                    Name: Gordon MacArthur
                                   Title: Aurhorized Signatory



                        Signature Page to Amendment No. 2
                                    July 2004
                         Applebee's International, Inc.


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                                  REAFFIRMATION

         Each  of the  undersigned  hereby  acknowledges  receipt  of a copy  of
Amendment No. 2 to the 3-Year Revolving Credit Agreement dated as of November 5,
2001,  by  and  among  Applebee's  International,  Inc.,  the  Lenders  and  the
Administrative Agent (the "Credit Agreement"), which Amendment No. 2 is dated as
of July 19, 2004 (the "Amendment"). Capitalized terms used in this Reaffirmation
and not  defined  herein  shall  have the  meanings  given to them in the Credit
Agreement.  Without  in  any  way  establishing  a  course  of  dealing  by  the
Administrative  Agent or any Lender,  the  undersigned  reaffirms  the terms and
conditions  of the  Guaranty  dated as of  November  5, 2001  executed by it and
acknowledges  and  agrees  that  such  Guaranty  and each and every  other  Loan
Document  executed by the  undersigned in connection  with the Credit  Agreement
remain  in full  force  and  effect  and are  hereby  ratified,  reaffirmed  and
confirmed.   All   references   to  the  Credit   Agreement   contained  in  the
above-referenced  documents  shall be a reference to the Credit  Agreement as so
amended  by the  Amendment  and as the same may from time to time  hereafter  be
amended, modified or restated.


                                      AII SERVICES, INC.

                                      By:/s/ Rebecca R. Tilden
                                      Its:Vice President


                                      ANNE ARUNDEL APPLE HOLDING CORPORATION

                                      By: /s/ Barry L. Huffman
                                      Its: Assistant Secretary


                                      APPLE AMERICAN LIMITED PARTNERSHIP OF
                                      MINNESOTA
                                      By: Gourmet Systems of Minnesota, Inc., as
                                      general partner

                                      By: /s/ Robert T. Steinkamp
                                      Its: Vice President


                                      APPLEBEE'S BEVERAGE, INC.

                                      By:/s/ Carrie Benney
                                      Its: Secretary


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                                      APPLEBEE'S NEIGHBORHOOD GRILL & BAR OF
                                      GEORGIA, INC.

                                      By: /s/ Robert T. Steinkamp
                                      Its: Vice President


                                      APPLEBEE'S NORTHEAST, INC.

                                      By: /s/ Rebecca R. Tilden
                                      Its: Vice President


                                      APPLEBEE'S OF MICHIGAN, INC.

                                      By: /s/ Rebecca R. Tilden
                                      Its: Vice President


                                      APPLEBEE'S OF MINNESOTA, INC.

                                      By: /s/ Robert T. Steinkamp
                                      Its: Vice President


                                      APPLEBEE'S OF NEW MEXICO, INC.

                                      By: /s/ Robert T. Steinkamp
                                      Its: Vice President


                                      APPLEBEE'S OF NEW YORK, INC.

                                      By: /s/ Rebecca R. Tilden
                                      Its: Vice President


                                      APPLEBEE'S OF NEVADA, INC.

                                      By: /s/ Robert T. Steinkamp
                                      Its: Vice President


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                                      APPLEBEE'S OF PENNSYLVANIA, INC.

                                      By: /s/ Rebecca R. Tilden
                                      Its: Vice President


                                      APPLEBEE'S OF TEXAS, INC.

                                      By: /s/ Robert T. Steinkamp
                                      Its: Vice President


                                      APPLEBEE'S OF VIRGINIA, INC.

                                      By: /s/ Robert T. Steinkamp
                                      Its: Vice President


                                      APPLE VERMONT RESTAURANTS, INC.

                                      By: /s/ Robert T. Steinkamp
                                      Its: Vice President


                                      GOURMET SYSTEMS OF ARIZONA, INC.

                                      By: /s/ Rebecca R. Tilden
                                      Its: Vice President


                                       GOURMET SYSTEMS OF CALIFORNIA, INC.

                                      By: /s/ Robert T. Steinkamp
                                      Its: Vice President


                                      GOURMET SYSTEMS OF GEORGIA, INC.

                                      By: /s/ Robert T. Steinkamp
                                      Its: Vice President


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                                      GOURMET SYSTEMS, INC.

                                      By: /s/ Robert T. Steinkamp
                                      Its: Vice President


                                      GOURMET SYSTEMS OF KANSAS, INC.

                                      By: /s/ Rebecca R. Tilden
                                      Its: Vice President


                                      GOURMET SYSTEMS OF MINNESOTA, INC.

                                      By: /s/ Robert T. Steinkamp
                                      Its: Vice President


                                      GOURMET SYSTEMS OF NEVADA, INC.

                                      By: /s/ Robert T. Steinkamp
                                      Its: Vice President


                                      GOURMET SYSTEMS OF TENNESSEE, INC.

                                      By: /s/ Rebecca R. Tilden
                                      Its: Vice President


                                      GOURMET SYSTEMS OF WISCONSIN, INC.

                                      By: /s/ Robert T. Steinkamp
                                      Its: Vice President




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                                      GOURMET WEST OF NEVADA, LIMITED LIABILITY
                                      COMPANY
                                      By: Gourmet Systems of Nevada, Inc., as
                                      managing member

                                      By: /s/ Robert T. Steinkamp
                                      Its: Vice President


                                      INNOVATIVE RESTAURANT CONCEPTS, INC.

                                      By: /s/ Rebecca R. Tilden
                                      Its: Vice President


                                      IRC KANSAS, INC.

                                      By: /s/ Rebecca R. Tilden
                                      Its: Vice President


                                      RB INTERNATIONAL, INC.

                                      By: /s/ Rebecca R. Tilden
                                      Its: Vice President


                                      RIO BRAVO RESTAURANT, INC.

                                      By: /s/ Rebecca R. Tilden
                                      Its: Vice President


                                      RIO BRAVO SERVICES, INC.

                                      By: /s/ Rebecca R. Tilden
                                      Its: Vice President


                                      SUMMIT RESTAURANTS, INC.

                                      By: /s/ Rebecca R. Tilden
                                      Its: Vice President



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                                      ACMC, INC.

                                      By: /s/ Rebecca R. Tilden
                                      Its: Vice President


                                      APPLEBEE'S UK, LLC
                                      By: Applebee's International, Inc., as
                                      managing member

                                      By: /s/ Robert T. Steinkamp
                                      Its: Vice President


                                      AFSS, INC.

                                      By: /s/ Rebecca R. Tilden
                                      Its: Vice President


                                      NEIGHBORHOOD INSURANCE, INC.

                                      By: /s/ Rebecca R. Tilden
                                      Its: Vice President


                                      APPLEBEE'S OF MARYLAND, INC.

                                      By: /s/ Robert T. Steinkamp
                                      Its: Vice President


                                      APPLEBEE'S OF CALVERT COUNTY, INC.

                                      By: /s/ Robert T. Steinkamp
                                      Its: Vice President


                                      APPLEBEE'S OF ST. MARY'S COUNTY, INC.

                                      By: /s/ Robert T. Steinkamp
                                      Its: Vice President


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                                      APPLEBEE'S MICHIGAN SERVICES, LLC

                                      By: /s/ Rebecca R. Tilden
                                      Its: Vice President