`UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q


(Mark One)
[ X ]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

For the quarterly period ended             March 27, 2005
                               -------------------------------------------------

                                       OR

[  ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

For the transition period from                to
                               --------------    ----------------

Commission File Number:         000-17962
                       -----------------------------------


                         Applebee's International, Inc.
              ----------------------------------------------------
             (Exact name of registrant as specified in its charter)

              Delaware                              43-1461763
  ---------------------------------     ------------------------------------
  (State or other jurisdiction of         (I.R.S. Employer Identification
   incorporation or organization)                      No.)

                4551 W. 107th Street, Overland Park, Kansas 66207
 --------------------------------------------------------------------------------
              (Address of principal executive offices and zip code)

                                 (913) 967-4000
               ---------------------------------------------------
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.       Yes       X            No
                                              -----------          -----------

Indicate by check mark whether the registrant is an accelerated filer (as
defined by Rule 12b-2 of the Act).       Yes       X            No
                                             -----------           -----------

The number of shares of the registrant's common stock outstanding as of April
22, 2005 was 81,125,240.`

---

`APPLEBEE'S INTERNATIONAL, INC.
                                    FORM 10-Q
                       FISCAL QUARTER ENDED MARCH 27, 2005
                                      INDEX




PART I              FINANCIAL INFORMATION                                               Page
------              ---------------------                                               ----

Item 1.             Condensed Consolidated Financial Statements:

                    Consolidated Balance Sheets as of March 27, 2005
                       and December 26, 2004........................................      3

                    Consolidated Statements of Earnings for the 13 Weeks
                       Ended March 27, 2005 and March 28, 2004 (as restated)........      4

                    Consolidated Statement of Stockholders' Equity for the
                       13 Weeks Ended March 27, 2005................................      5

                    Consolidated Statements of Cash Flows for the 13 Weeks
                       Ended March 27, 2005 and March 28, 2004 (as restated)........      6

                    Notes to Condensed Consolidated Financial Statements............      8

Item 2.             Management's Discussion and Analysis of
                       Financial Condition and Results of Operations................     15

Item 3.             Quantitative and Qualitative Disclosures About Market Risk......     27

Item 4.             Controls and Procedures.........................................     27



PART II             OTHER INFORMATION
-------             -----------------

Item 1.             Legal Proceedings...............................................     28

Item 2.             Unregistered Sales of Equity Securities and Use of Proceeds.....     28

Item 6.             Exhibits........................................................     28

Signatures .........................................................................     29

Exhibit Index.......................................................................     30

                                       2`

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`PART I. FINANCIAL INFORMATION

Item 1.           Condensed Consolidated Financial Statements

                 APPLEBEE'S INTERNATIONAL, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)
                      (in thousands, except share amounts)

                                                                                        March 27,         December 26,
                                                                                          2005               2004
                                                                                      --------------     -------------
                                     ASSETS

Current assets:
     Cash and cash equivalents...................................................      $    6,195         $   10,642
     Short-term investments, at market value.....................................             282                282
     Receivables (less allowance for bad debts of $394 in 2005 and $417 in 2004).          43,712             39,152
     Receivables related to captive insurance subsidiary.........................           4,163              2,566
     Inventories.................................................................          28,755             35,936
     Prepaid and other current assets............................................          15,660             12,079
                                                                                      --------------     -------------
        Total current assets.....................................................          98,767            100,657
Property and equipment, net......................................................         506,072            486,548
Goodwill.........................................................................         117,002            116,344
Restricted assets related to captive insurance subsidiary........................          18,162             17,386
Other intangible assets, net.....................................................           8,318              8,524
Other assets, net................................................................          27,429             24,972
                                                                                      --------------     -------------
                                                                                       $  775,750         $  754,431
                                                                                      ==============     =============


                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
     Current portion of long-term debt...........................................      $      233         $      222
     Notes payable...............................................................           2,000                 --
     Accounts payable............................................................          34,811             42,830
     Accrued expenses and other current liabilities..............................          85,829             89,064
     Loss reserve and unearned premiums related to captive insurance subsidiary..          15,168             12,137
     Accrued dividends...........................................................              --              4,867
     Accrued income taxes........................................................          15,495              2,578
                                                                                      --------------     -------------
        Total current liabilities................................................         153,536            151,698
                                                                                      --------------     -------------
Non-current liabilities:
     Long-term debt - less current portion.......................................          25,412             35,472
     Deferred income taxes.......................................................          32,185             28,995
     Other non-current liabilities...............................................          43,802             41,539
                                                                                      --------------     -------------
        Total non-current liabilities............................................         101,399            106,006
                                                                                      --------------     -------------
        Total liabilities........................................................         254,935            257,704
                                                                                      --------------     -------------
Commitments and contingencies (Note 4)
Stockholders' equity:
     Preferred stock - par value $0.01 per share: authorized - 1,000,000 shares;
        no shares issued.........................................................            --                 --
     Common stock - par value $0.01 per share:  authorized - 125,000,000 shares;
        issued - 108,503,243 shares..............................................           1,085              1,085
     Additional paid-in capital..................................................         228,474            220,897
     Unearned compensation.......................................................          (4,155)            (1,924)
     Retained earnings...........................................................         654,972            623,315
                                                                                      --------------     -------------
                                                                                          880,376            843,373

     Treasury stock - 27,428,482 shares in 2005 and 27,375,044 shares in 2004,
         at cost.................................................................        (359,561)          (346,646)
                                                                                      --------------     -------------
Total stockholders' equity.......................................................         520,815            496,727
                                                                                      --------------     -------------
                                                                                       $  775,750         $  754,431
                                                                                      ==============     =============
            See notes to condensed consolidated financial statements.


                                       3`

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`APPLEBEE'S INTERNATIONAL, INC. AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF EARNINGS
                                   (Unaudited)
                    (in thousands, except per share amounts)


                                                                                 13 Weeks Ended
                                                                         --------------------------------
                                                                          March 27,         March 28,
                                                                             2005              2004
                                                                         -------------     -------------
                                                                                           (as restated)
       Revenues:
            Company restaurant sales................................       $ 270,458         $ 243,560
            Franchise royalties and fees............................          33,008            30,715
            Other franchise income..................................           1,065             3,115
                                                                         -------------     -------------
               Total operating revenues.............................         304,531           277,390
                                                                         -------------     -------------
       Cost of company restaurant sales:
            Food and beverage.......................................          71,635            63,515
            Labor...................................................          88,724            79,655
            Direct and occupancy....................................          66,367            59,342
            Pre-opening expense.....................................           1,167               567
                                                                         -------------     -------------
               Total cost of company restaurant sales...............         227,893           203,079
                                                                         -------------     -------------
       Cost of other franchise income...............................             819             2,937
       General and administrative expenses..........................          26,946            25,422
       Amortization of intangible assets............................             228                86
       Loss on disposition of restaurants and equipment.............             297               495
                                                                         -------------     -------------
       Operating earnings...........................................          48,348            45,371
                                                                         -------------     -------------
       Other income (expense):
            Investment income (expense).............................             (41)              223
            Interest expense........................................            (337)             (344)
            Other income............................................             435               461
                                                                         -------------     -------------
               Total other income...................................              57               340
                                                                         -------------     -------------
       Earnings before income taxes.................................          48,405            45,711
       Income taxes.................................................          16,748            15,975
                                                                         -------------     -------------
       Net earnings.................................................       $  31,657         $  29,736
                                                                         =============     =============

       Basic net earnings per common share..........................       $    0.39         $    0.36
                                                                         =============     =============
       Diluted net earnings per common share........................       $    0.38         $    0.35
                                                                         =============     =============

       Basic weighted average shares outstanding....................          80,705            81,986
                                                                         =============     =============
       Diluted weighted average shares outstanding..................          82,375            84,628
                                                                         =============     =============

            See notes to condensed consolidated financial statements.

                                       4`

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`APPLEBEE'S INTERNATIONAL, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                                   (Unaudited)
                                 (in thousands)




                                                          Common Stock      Additional                                             Total
                                                      ---------------------   Paid-In     Unearned      Retained    Treasury    Stockholders'
                                                        Shares     Amount     Capital   Compensation    Earnings     Stock         Equity
                                                      ---------- ---------- ----------- ------------   ----------  ----------    ------------

Balance, December 26, 2004 .......................     108,503   $   1,085   $ 220,897   $  (1,924)    $ 623,315   $(346,646)    $ 496,727

   Net earnings ..................................        --          --          --          --          31,657        --          31,657
   Purchases of treasury stock ...................        --          --          --          --            --       (18,657)      (18,657)
   Stock options exercised and related tax benefit        --          --         4,975        --            --         4,590         9,565
   Shares issued under employee benefit plans ....        --          --           617        --            --           410         1,027
   Restricted shares awarded under equity
      incentive plans, net of cancellations ......        --          --         1,985      (2,727)         --           742          --
   Amortization of unearned compensation
     relating to restricted shares ...............        --          --          --           496          --          --             496
                                                       -------   ---------   ---------   ----------   ----------   ----------   ------------

Balance, March 27, 2005 ..........................     108,503   $   1,085   $ 228,474   $  (4,155)    $ 654,972   $(359,561)    $ 520,815
                                                       =======   =========   =========   ==========   ==========   ==========   ============


            See notes to condensed consolidated financial statements.

                                       5`

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`APPLEBEE'S INTERNATIONAL, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                 (in thousands)


                                                                                                             13 Weeks Ended
                                                                                                    --------------------------------
                                                                                                        March 27,         March 28,
                                                                                                          2005               2004
                                                                                                    --------------     -------------
                                                                                                                       (as restated)
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net earnings ..........................................................................           $ 31,657            $ 29,736
     Adjustments to reconcile net earnings to net
        cash provided by operating activities:
        Depreciation and amortization ......................................................             12,531              11,189
        Amortization of intangible assets ..................................................                228                  86
        Amortization of unearned compensation ..............................................                496                 338
        Other amortization .................................................................                 63                  39
        Deferred income tax provision ......................................................              1,659                 246
        Loss on disposition of restaurants and equipment ...................................                297                 495
        Income tax benefit from exercise of stock options ..................................              2,638               3,108
     Changes in assets and liabilities (exclusive of effects of acquisitions):
        Receivables ........................................................................             (4,560)             (3,939)
        Receivables related to captive insurance subsidiary ................................             (1,597)             (7,705)
        Inventories ........................................................................              7,181              (9,510)
        Prepaid and other current assets ...................................................             (2,050)             (4,163)
        Accounts payable ...................................................................             (8,019)              3,604
        Accrued expenses and other current liabilities .....................................             (5,887)            (17,547)
        Loss reserve and unearned premiums related to captive insurance
          subsidiary .......................................................................              3,031              12,378
        Income taxes .......................................................................             12,917              14,236
        Other non-current liabilities ......................................................                  6                 643
        Other ..............................................................................               (282)               (467)
                                                                                                       --------            --------
        NET CASH PROVIDED BY OPERATING ACTIVITIES ..........................................             50,309              32,767
                                                                                                       --------            --------
CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchases of property and equipment ...................................................            (24,619)            (13,796)
     Restricted assets related to captive insurance subsidiary .............................               (776)             (3,074)
     Acquisition of restaurants ............................................................             (5,742)               --
     Purchases of short-term investments ...................................................               --                  (253)
     Other investing activities ............................................................               --                  (966)
                                                                                                       --------            --------
        NET CASH USED BY INVESTING ACTIVITIES ..............................................            (31,137)            (18,089)
                                                                                                       --------            --------
CASH FLOWS FROM FINANCING ACTIVITIES:
     Purchases of treasury stock ...........................................................            (18,657)            (32,039)
     Dividends paid ........................................................................             (4,867)             (3,863)
     Issuance of common stock upon exercise of stock options ...............................              6,927               4,971
     Shares issued under employee benefit plans ............................................              1,027               2,915
     Net debt proceeds (payments) ..........................................................             (8,049)              4,959
                                                                                                       --------            --------
        NET CASH USED BY FINANCING ACTIVITIES ..............................................            (23,619)            (23,057)
                                                                                                       --------            --------
NET DECREASE IN CASH AND CASH EQUIVALENTS ..................................................             (4,447)             (8,379)
CASH AND CASH EQUIVALENTS, beginning of period .............................................             10,642              17,867
                                                                                                       --------            --------
CASH AND CASH EQUIVALENTS, end of period ...................................................           $  6,195            $  9,488
                                                                                                       ========            ========



            See notes to condensed consolidated financial statements.

                                       6`

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`APPLEBEE'S INTERNATIONAL, INC. AND SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF CASH FLOWS - (Continued)
                                   (Unaudited)
                                 (in thousands)


                                                                                           13 Weeks Ended
                                                                                 ------------------------------------
                                                                                    March 27,           March 28,
                                                                                      2005                2004
                                                                                 ----------------    ----------------
                                                                                                      (as restated)
SUPPLEMENTAL DISCLOSURES OF CASH
     FLOW INFORMATION:
     Cash paid during the 13 week period for:
       Income taxes........................................................         $       626         $       114
                                                                                 ================    ================
       Interest............................................................         $       210         $       173
                                                                                 ================    ================

SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES:

In April 2005, we finalized the acquisition of eight Applebee's restaurants that
were closed in 2004 by a former franchisee.  We paid approximately $5,700,000 in
cash in the first  quarter of fiscal 2005 and paid  approximately  $2,300,000 in
cash in the second quarter of fiscal 2005.

We issued  restricted  common  stock,  net of  forfeitures,  of  $2,727,000  and
$1,497,000  for  the  13  weeks  ended  March  27,  2005  and  March  28,  2004,
respectively.

In 2002,  we entered  into a rabbi trust  agreement to protect the assets of the
nonqualified deferred compensation plan for certain of our associates.  The plan
investments  are  included  in other  assets and the  offsetting  obligation  is
included in other non-current liabilities in our consolidated balance sheets. We
had non-cash increases in these balances of $2,257,000 and $1,888,000 for the 13
weeks ended March 27, 2005 and March 28, 2004, respectively.

In 2004,  we made  matching  contributions  in shares of our  common  stock to a
profit sharing plan and trust  established in accordance  with Section 401(k) of
the Internal Revenue Code of $1,308,000.



           See notes to condensed consolidated financial statements.

                                       7`

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`APPLEBEE'S INTERNATIONAL, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

1.       Basis of Presentation

Our condensed  consolidated financial statements included in this Form 10-Q have
been prepared  without audit in accordance with the rules and regulations of the
Securities and Exchange  Commission.  Although certain  information and footnote
disclosures  normally  included in financial  statements  prepared in accordance
with accounting  principles  generally  accepted in the United States of America
have been condensed or omitted,  we believe that the disclosures are adequate to
make the  information  presented  not  misleading.  The  accompanying  condensed
consolidated financial statements should be read in conjunction with the audited
financial  statements  and notes  thereto  included in our Annual Report on Form
10-K for the fiscal year ended December 26, 2004.

We  believe  that  all   adjustments,   consisting  only  of  normal   recurring
adjustments,  necessary  for a fair  presentation  of the results of the interim
periods  presented  have been made.  The results of  operations  for the interim
periods  presented are not necessarily  indicative of the results to be expected
for the full year.

We have made certain  reclassifications to the condensed  consolidated financial
statements to conform to the fiscal 2005 presentation.

2.       Restatement of Financial Statements

Like many other companies in the  restaurant,  retail and other  industries,  we
reviewed  our  accounting  treatment  for  leases  and  depreciation  of related
leasehold improvements during the fourth fiscal quarter of 2004 and restated our
consolidated  financial  statements for fiscal years 2003 and 2002 and the first
three fiscal  quarters of fiscal 2004 in our Annual  Report on Form 10-K for the
fiscal year ended December 26, 2004.

Historically,  when accounting for leases with renewal options,  we had recorded
rent  expense on a  straight-line  basis over the initial  non-cancelable  lease
term,  with the term  commencing when actual rent payments began and depreciated
leasehold  improvements  on those  properties  over a maximum period of 20 years
which, in certain cases,  included a portion of the renewal option  periods.  We
corrected  our lease term to include  option  periods where failure to recognize
such options would result in an economic  penalty such that the renewal  appears
reasonably assured.  The primary result of this correction was to accelerate the
recognition  of rent  expense  under  certain  leases  that  include  fixed-rent
escalations.  In addition,  the lease term is deemed to commence on the date the
company becomes  legally  obligated for rent payments.  Therefore,  we adopted a
policy to capitalize  the  straight-line  rent amounts  during the  construction
period of  leased  properties,  which  resulted  in an  increase  to  previously
reported property and equipment in the restated  consolidated balance sheets and
an increase to depreciation expense in the restated  consolidated  statements of
earnings.  Straight-line rent subsequent to the construction period and prior to
the restaurant  opening is recognized as expense,  which resulted in an increase
to  previously  reported  pre-opening  expenses  in  the  restated  consolidated
statements of earnings.

In  connection  with the  restatement  for  lease  accounting  matters,  we also
corrected previously identified immaterial errors, primarily related to vacation
and workers' compensation expense.


                                       8`

---

`The following table contains information regarding the impact of the restatement
adjustments  on our  consolidated  statement  of earnings for the 13 weeks ended
March 28, 2004. All amounts, except per share amounts, are in thousands.

Consolidated Statement of Earnings


                                                                     13 Weeks Ended
                                                                     March 28, 2004                      13 Weeks Ended
                                                                     (As previously       Restatement    March 28, 2004
                                                                        reported)           amounts      (As restated)
Revenues:                                                             -------------       ----------     --------------
     Company restaurant sales........................................    $ 243,560        $     --           $ 243,560
     Franchise royalties and fees ....................................      30,772               (57)           30,715
     Other franchise income ..........................................       3,115              --               3,115
                                                                         ---------         ---------         ---------
        Total operating revenue ......................................     277,447               (57)          277,390
                                                                         ---------         ---------         ---------
Cost of company restaurant sales:
     Food and beverage ...............................................      63,515              --              63,515
     Labor ...........................................................      79,659                (4)           79,655
     Direct and occupancy ............................................      59,069               273            59,342
     Pre-opening expense .............................................         550                17               567
                                                                         ---------         ---------         ---------
        Total cost of company restaurant sales .......................     202,793               286           203,079
                                                                         ---------         ---------         ---------
Cost of other franchise income .......................................       2,937              --               2,937
General and administrative expenses ..................................      25,517               (95)           25,422
Amortization of intangible assets ....................................          86              --                  86
Loss on disposition of restaurants and equipment .....................         495              --                 495
                                                                         ---------         ---------         ---------
Operating earnings ...................................................      45,619              (248)           45,371
                                                                         ---------         ---------         ---------
Other income (expense):
     Investment income ...............................................         223              --                 223
     Interest expense ................................................        (344)             --                (344)
     Other income ....................................................        (109)              570               461
                                                                         ---------         ---------         ---------
        Total other income (expense) .................................        (230)              570               340
                                                                         ---------         ---------         ---------
Earnings before income taxes .........................................      45,389               322            45,711
Income taxes .........................................................      15,886                89            15,975
                                                                         ---------         ---------         ---------
Net earnings.........................................................    $  29,503         $     233         $  29,736
                                                                         =========         =========         =========

Basic net earnings per common share..................................    $    0.36         $    --           $    0.36
                                                                         =========         =========         =========
Diluted net earnings per common share................................    $    0.35         $    --           $    0.35
                                                                         =========         =========         =========

Basic weighted average shares outstanding ............................      81,986                              81,986
                                                                         =========                           =========
Diluted weighted shares outstanding ..................................      84,628                              84,628
                                                                         =========                           =========

3.       Stock-Based Compensation

We have adopted the disclosure  provisions of Statement of Financial  Accounting
Standards  ("SFAS")  No.  148,   "Accounting  for  Stock-Based   Compensation  -
Transition  and  Disclosure,  an  amendment  of FASB  Statement  No.  123."  The
Statement  requires  prominent  disclosures in both annual and interim financial
statements   regarding  the  method  of  accounting  for  stock-based   employee
compensation and the effect of the method used on reported  results.  We account
for  stock-based  compensation  awards under the intrinsic  method of Accounting
Principles  Board ("APB")  Opinion No. 25. Opinion No. 25 requires  compensation
cost to be  recognized  based on the excess,  if any,  between the quoted market
price of the stock at the date of grant and the amount an  employee  must pay to
acquire the stock.  All options  awarded under all of our plans are granted with
an exercise  price equal to the fair market value on the date of the grant.  The
following  table  presents the effect on our net earnings and earnings per share
had we adopted the fair value method of accounting for stock-based  compensation
under SFAS No. 123,  "Accounting  for Stock-Based  Compensation"  (in thousands,
except for per share amounts).


                                       9`

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`13 Weeks Ended
                                                                   ----------------------------------
                                                                      March 27,         March 28,
                                                                        2005              2004
                                                                   ----------------  ----------------
                                                                                      (as restated)
Net earnings, as reported........................................    $     31,657      $     29,736

Add: Stock-based compensation expense included
    in net earnings, net of related taxes........................             282               298
Less: Total stock-based employee compensation expense
    determined under fair value based methods for all
    awards, net of related taxes.................................           1,604             2,576
                                                                   ----------------  ----------------

Pro forma net earnings...........................................    $     30,335      $     27,458
                                                                   ================  ================

Basic net earnings per common share, as reported.................    $       0.39      $       0.36
                                                                   ================  ================
Basic net earnings per common share, pro forma...................    $       0.38      $       0.33
                                                                   ================  ================
Diluted net earnings per common share, as reported...............    $       0.38      $       0.35
                                                                   ================  ================
Diluted net earnings per common share, pro forma.................    $       0.37      $       0.32
                                                                   ================  ================

4.       Commitments and Contingencies

Litigation,  claims and disputes: We are involved in various legal actions which
include,  without limitation,  employment law related matters, dram shop claims,
personal injury claims and other such normal restaurant  operational matters. In
each instance,  we believe that we have meritorious  defenses to the allegations
made and we are vigorously defending these claims.

We believe that the ultimate disposition of these matters will not, individually
or in the  aggregate,  have a  material  adverse  effect  upon our  business  or
consolidated financial position.

Lease guarantees and  contingencies:  In connection with the sale of restaurants
to  franchisees  and  other  parties,  we  have,  in  certain  cases,   remained
contingently  liable for the remaining lease payments.  As of March 27, 2005, we
have outstanding  lease guarantees of  approximately  $18,800,000.  These leases
expire at various times  throughout  the next several years with the final lease
agreement expiring in 2025. In addition, we or our subsidiaries are contingently
liable for various  leases that we have assigned in connection  with the sale of
restaurants  to  franchisees  and  other  parties,  in the  potential  amount of
$17,700,000.  We have not  recorded a liability as of March 27, 2005 or December
26, 2004.

Franchisee guarantees: In November 2003, we arranged for a third-party financing
company to provide up to  $75,000,000  to qualified  franchisees  for short-term
loans to fund remodel investments,  subject to our approval.  Under the terms of
this financing  program,  we will provide a limited guarantee pool for the loans
advanced  during the  three-year  period ending  December  2006. As of March 27,
2005, there were loans outstanding to four franchisees aggregating approximately
$1,300,000 under this program.

In May 2004,  we arranged for a third-party  financing  company to provide up to
$250,000,000  to  qualified  franchisees  for loans to fund  development  of new
restaurants  through  October 2007,  subject to our approval.  We will provide a
limited guarantee of certain loans advanced under this program.  As of March 27,
2005, there were loans outstanding to two franchisees aggregating  approximately
$14,100,000 under this program.  The fair value of our guarantee under these two
financing  programs was less than $100,000 and is recorded in other  non-current
liabilities in our consolidated balance sheet as of March 27, 2005.

                                       10`

---

`Severance  agreements:  We have severance and employment agreements with certain
officers  providing for severance  payments to be made in the event the employee
resigns or is terminated  related to a change in control.  The agreements define
the  circumstances  which will constitute a change in control.  If the severance
payments had been due as of March 27, 2005,  we would have been required to make
payments totaling approximately $13,200,000.  In addition, we have severance and
employment  agreements with certain officers which contain severance  provisions
not  related  to a change in  control.  Those  provisions  would  have  required
aggregate  payments  of  approximately  $6,900,000  if such  officers  had  been
terminated as of March 27, 2005.

5.       Net Earnings Per Share

We compute basic net earnings per share by dividing earnings available to common
shareholders by the weighted average number of common shares outstanding for the
reporting period. Diluted net earnings per share reflects the potential dilution
that could occur if holders of options or other  contracts to issue common stock
exercised or converted  their  holdings  into common  stock.  Outstanding  stock
options and  equity-based  compensation  represent the only dilutive  effects on
weighted average shares. The chart below presents a reconciliation between basic
and diluted weighted average shares outstanding and the related net earnings per
share.  All amounts in the chart,  except per share  amounts,  are  expressed in
thousands.

                                                                               13 Weeks Ended
                                                                ----------------------------------------------
                                                                      March 27,               March 28,
                                                                        2005                    2004
                                                                ----------------------  ----------------------
                                                                                            (as restated)
      Net earnings............................................      $     31,657            $     29,736
                                                                ======================  ======================

      Basic weighted average shares outstanding...............            80,705                  81,986
      Dilutive effect of stock options and
           equity-based compensation..........................             1,670                   2,642
                                                                ----------------------  ----------------------
      Diluted weighted average shares outstanding.............            82,375                  84,628
                                                                ======================  ======================
      Basic net earnings per common share.....................      $       0.39            $       0.36
                                                                ======================  ======================
      Diluted net earnings per common share...................      $       0.38            $       0.35
                                                                ======================  ======================

We excluded  stock options with exercise  prices greater than the average market
price of our common stock for the  applicable  periods from the  computation  of
diluted weighted average shares  outstanding.  There were approximately  167,000
and 21,000 of these  options for the 13 weeks ended March 27, 2005 and March 28,
2004, respectively.

6.       Acquisitions

In April 2005, we finalized the acquisition of eight Applebee's restaurants that
were closed in fiscal 2004 by a former franchisee for  approximately  $8,800,000
payable in cash.  In connection  with this  acquisition,  we paid  approximately
$800,000 in cash in the fourth quarter of fiscal 2004,  approximately $5,700,000
in cash in the first quarter of fiscal 2005 and approximately $2,300,000 in cash
in the second quarter of

                                       11`

---

`fiscal 2005.  The purchase  price of $8,800,000  has been  allocated to the fair
value of property and  equipment  of  approximately  $8,200,000  and goodwill of
approximately $600,000. The restaurants will be re-opened throughout fiscal 2005
as they are remodeled.  The first restaurant opened in March 2005. Our condensed
consolidated  financial  statements reflect these restaurants  subsequent to the
date of acquisition.  Due to the  administrative  and training costs to re-enter
this market,  this  acquisition  is expected to be slightly  dilutive to our net
earnings for fiscal 2005.

On April 26, 2004, we completed our  acquisition of the operations and assets of
ten Applebee's  restaurants  located in Southern  California  for  approximately
$13,800,000 in cash. Our financial  statements reflect the results of operations
for these restaurants subsequent to the date of acquisition.  The purchase price
was  allocated  to the fair  value of  property  and  equipment  of  $2,500,000,
goodwill of $10,800,000  and other net assets of  approximately  $500,000.  This
transaction  did not have a  significant  impact on our net  earnings for fiscal
2004.   Company   restaurant  sales  for  these   restaurants  would  have  been
approximately  $6,600,000  for  the 13  weeks  ended  March  28,  2004  had  the
acquisition occurred at the beginning of that period.

7.       Goodwill and Other Intangible Assets

Changes in goodwill are summarized below (in thousands):

                                                                   13 Weeks Ended         52 Weeks Ended
                                                                      March 27,             December 26,
                                                                        2005                    2004

    Carrying amount, beginning of the year..................        $    116,344            $    105,326
    Goodwill acquired during the period.....................                 658                  11,018
                                                                ----------------------  ----------------------
    Goodwill amount, end of period..........................        $    117,002            $    116,344
                                                                ======================  ======================

Intangible assets subject to amortization pursuant to SFAS No. 142, "Goodwill
and Other Intangible Assets," are summarized below (in thousands):

                                                                  March 27, 2005
                                             ---------------------------------------------------------
                                              Gross Carrying       Accumulated           Net Book
                                                  Amount          Amortization            Value
                                             ------------------  ----------------    -----------------
Amortized intangible assets:
    Franchise interest and rights ...........        $ 6,371             $ 5,647             $   724
    Lease acquisition costs .................          4,911                 415               4,496
    Noncompete agreement ....................            350                 306                  44
                                             ------------------   ---------------    -----------------
Total .......................................        $11,632             $ 6,106             $ 5,526
                                             ==================   ===============    =================

                                                                 December 26, 2004
                                             ----------------------------------------------------------
                                              Gross Carrying        Accumulated           Net Book
                                                  Amount           Amortization            Value
                                             ------------------   ---------------    -----------------
Amortized intangible assets:
    Franchise interest and rights.......             $ 6,371             $ 5,565             $   806
    Lease acquisition costs.............               4,875                 294               4,581
    Noncompete agreement................                 350                  22                 328
                                             ------------------  ----------------    -----------------
Total...................................            $ 11,596             $ 5,881             $ 5,715
                                             ==================   ===============    =================


                                       12`

---

`In the fourth quarter of fiscal 2004, we acquired the exclusive right to operate
Applebee's restaurants in the Memphis, Tennessee market from a former franchisee
group for approximately $2,800,000. This intangible asset has an indefinite life
and  accordingly,  will not be  amortized  but  tested for  impairment  at least
annually.  In  connection  with this  acquisition,  we entered  into an expanded
4-year noncompete  agreement with the former franchise principals which is being
amortized over the life of the agreement.

In the second  quarter of fiscal 2004, we acquired six  restaurant  leases which
were formerly Ground Round restaurants for approximately $4,900,000 in cash.

Franchise  interest  and  rights are being  amortized  over the next two to four
years,  the lease  acquisition  costs are being  amortized over the next 8 to 20
years and the noncompete agreement is being amortized over the next four years.

We expect annual  amortization  expense for all  intangible  assets for the next
five fiscal years to range from approximately $400,000 to $900,000.


8.       Captive Insurance Subsidiary

In 2002, we formed  Neighborhood  Insurance,  Inc., a Vermont  corporation and a
wholly-owned captive insurance  subsidiary to provide Applebee's  International,
Inc. and qualified  franchisees with workers' compensation and general liability
insurance.  Applebee's International,  Inc. and covered franchisees make premium
payments to the captive  insurance  company which pays  administrative  fees and
insurance claims, subject to individual and aggregate maximum claim limits under
the captive insurance company's reinsurance policies. Franchisee premium amounts
billed by the captive  insurance  company are established based upon third-party
actuarial  estimates of settlement costs for incurred claims and  administrative
fees. The  franchisee  premiums are included in other  franchise  income ratably
over the policy year.  The related  offsetting  expenses are included in cost of
other franchise income.  Accordingly,  we do not expect franchisee participation
in the captive  insurance company to have a material impact on our net earnings.
In fiscal 2005, we reduced the types of insurance  coverage plans which resulted
in  fewer  franchisee   participants  in  our  captive  insurance  program.  Our
consolidated  balance  sheets  include  the  following  balances  related to the
captive insurance subsidiary:

     o    Franchise   premium   receivables  of  approximately   $3,500,000  and
          $1,900,000  as of March 27, 2005 and December 26, 2004,  respectively,
          included in receivables related to captive insurance subsidiary.
     o    Cash  equivalent and other  long-term  investments  restricted for the
          payment of claims of  approximately  $17,400,000 and $16,700,000 as of
          March 27,  2005 and  December  26,  2004,  respectively,  included  in
          restricted assets related to captive insurance subsidiary.
     o    Loss  reserve  and  unearned  premiums  related to  captive  insurance
          subsidiary of  approximately  $22,600,000  and $19,600,000 as of March
          27, 2005 and December 26, 2004, respectively. Approximately $7,500,000
          in both periods is included in other non-current liabilities.
     o    Other  miscellaneous  items,  net,  of  approximately  $1,700,000  and
          $1,000,000  as of March 27, 2005 and December 26, 2004,  respectively,
          included in several line items in the consolidated balance sheets.


                                       13`

---

`9.       Treasury Shares

As of March 27, 2005, we had approximately 27,428,000 shares held in treasury. A
reconciliation  of our treasury  shares for the 13 weeks ended March 27, 2005 is
provided below (shares in thousands):

                                                                  Treasury
                                                                   Shares
                                                               ---------------

    Balance as of December 26, 2004........................         27,375
    Purchases of treasury stock............................            728
    Stock options exercised................................           (531)
    Shares issued under employee benefit plans.............            (47)
    Restricted shares awarded under equity incentive
        plans..............................................            (97)
                                                               ---------------
    Balance as of March 27, 2005...........................         27,428
                                                               ===============

10.      New Accounting Pronouncements

In December  2004,  the FASB issued SFAS No. 123  (revised  2004),  "Share-based
Payment,"   which   replaces   SFAS  No.  123,   "Accounting   for   Stock-Based
Compensation,"  and supercedes APB Opinion No. 25,  "Accounting for Stock Issued
to Employees." SFAS No. 123 (revised 2004) requires  compensation  costs related
to  share-based   payment   transactions  to  be  recognized  in  the  financial
statements.  With limited  exceptions,  the amount of compensation  cost will be
measured  based on the fair value on the grant  date of the equity or  liability
instruments issued. Compensation cost will be recognized over the period that an
employee  provides  service for that award,  resulting  in a decrease in our net
earnings.  This new Standard,  as amended, will be effective for us beginning in
fiscal 2006. We are evaluating  the impact of this Standard on our  consolidated
financial statements.

In March 2005,  the FASB  issued FASB  Interpretation  No. 47,  "Accounting  for
Conditional Asset Retirement Obligations," ("FIN 47"). FIN 47 clarifies that the
term  "conditional"  as used in SFAS No. 143,  "Accounting for Asset  Retirement
Obligations,"  which refers to a legal obligation to perform an asset retirement
activity even if the timing and/or  settlement are conditional on a future event
that may or may not be within the control of an entity. Accordingly,  the entity
must record a liability for the conditional  asset retirement  obligation if the
fair value of the obligation can be reasonably estimated.  The Interpretation is
effective  for us no  later  than  the  end  of our  2005  fiscal  year.  We are
evaluating the impact of FIN 47 on our consolidated financial statements.

11.       Subsequent Event

On April 12,  2005,  we  announced  that we have  reached  an  agreement  with a
franchisee  to acquire  the assets of 12  Applebee's  restaurants  in  Missouri,
Kansas and Arkansas for approximately $39,500,000 in cash at closing, subject to
adjustment pursuant to agreed upon prorations and adjustments.  This acquisition
is expected to close in the second quarter of fiscal 2005,  subject to obtaining
operating licenses and other third-party consents.  This transaction is expected
to be slightly accretive to our net earnings for fiscal 2005.


                                       14`

---

`Item 2.       Management's Discussion and  Analysis  of Financial Condition  and
              Results of Operations

Restatement of Financial Statements

The  accompanying  Management's  Discussion  and  Analysis  gives  effect to the
restatement  of our condensed  consolidated  financial  statements for the first
quarter  of  fiscal  2004  to  correct  our  accounting  treatment  for  leases,
depreciation of related  leasehold  improvements  and for previously  identified
immaterial errors,  primarily related to vacation and workers' compensation,  as
described in Note 2 to the condensed consolidated financial statements.

General

We operate on a 52 or 53 week fiscal year ending on the last Sunday in December.
Our fiscal years and fiscal quarters are as follows:

                                                                 Number
   Fiscal Year                 Fiscal Year End                  of Weeks
-------------------       --------------------------        -----------------
       2004               December 26, 2004                        52
       2005               December 25, 2005                        52
       2006               December 31, 2006                        53

  Fiscal Quarter                                                 Number
                             Fiscal Quarter End                 of Weeks
-------------------       --------------------------        -----------------
   2004 Quarter           March 28, 2004                           13
   2005 Quarter           March 27, 2005                           13

Our revenues are generated from three primary sources:

     o    Company restaurant sales (food and beverage sales)
     o    Franchise royalties and fees
     o    Other franchise income

Beverage  sales  consist of sales of alcoholic  beverages,  while  non-alcoholic
beverages  are included in food sales.  Franchise  royalties are generally 4% of
each franchise  restaurant's monthly gross sales. Franchise fees typically range
from  $30,000 to $35,000 for each  restaurant  opened.  Other  franchise  income
includes  insurance  premiums for the current year and premium audit adjustments
for prior years from franchisee  participation in our captive  insurance program
and revenue  from  information  technology  products  and  services  provided to
certain franchisees.  In fiscal 2005, we have fewer franchisee  participants due
to the  termination  of one of our  captive  programs  which  will  result  in a
decrease  in  franchise  premiums   recognized  in  other  franchise  income  of
approximately $9,500,000.

Certain expenses relate only to company operated restaurants. These include:

     o    Food and beverage costs
     o    Labor costs
     o    Direct and occupancy costs
     o    Pre-opening expenses


                                       15`

---

`Cost of  other  franchise  income  includes  the  costs  related  to  franchisee
participation in our captive  insurance program and costs related to information
technology  products and  services  provided to certain  franchisees.  In fiscal
2005, we have fewer franchisee participants due to the termination of one of our
captive  programs which will result in a decrease in franchise  premiums expense
in the cost of other franchise income of approximately $9,500,000.

Other expenses,  such as general and administrative  and amortization  expenses,
relate to both company operated restaurants and franchise operations.

Overview

Applebee's  International,  Inc. and our  subsidiaries  develop,  franchise  and
operate casual dining restaurants under the name "Applebee's  Neighborhood Grill
Bar" which is the largest  casual dining  concept in the world with nearly 1,700
system-wide  restaurants open as of March 27, 2005. The casual dining segment of
the restaurant  industry is highly  competitive  and there are many factors that
affect our  profitability.  Our industry is  susceptible  to changes in economic
conditions,  trends in lifestyles,  fluctuating  costs,  government  regulation,
availability  of  resources  and  consumer  perceptions.   When  evaluating  and
assessing our business, we believe there are five key factors:

     o    Development  - the number of new  company  and  franchise  restaurants
          opened during the period.  As the largest casual dining concept in the
          world,  Applebee's  has a unique  opportunity  to leverage  our brand,
          system size and scale to optimize  our future  growth.  Our  expansion
          strategy has been to cluster restaurants in targeted markets,  thereby
          increasing consumer awareness and convenience, and enabling us to take
          advantage of operational,  distribution and advertising  efficiencies.
          We currently expect that the Applebee's system will encompass at least
          3,000  restaurants in the United States,  as well as the potential for
          at least 1,000 restaurants  internationally.  In the 2005 quarter,  we
          opened  26   restaurants,   including  13  company  and  13  franchise
          restaurants. We have opened at least 100 restaurants each year for the
          past 12 fiscal years.  In fiscal 2005, we currently  expect to open at
          least  135  restaurants,  comprised  of 50  company  and 85  franchise
          restaurants.

     o    Comparable restaurant sales - a year-over-year comparison of sales for
          restaurants  open at least  18  months.  Our  revenues  are  generated
          primarily from company restaurant sales,  franchise royalties and fees
          and  other  franchise  income.  Increases  in  company  and  franchise
          comparable  restaurant  sales  will  result in  increases  in  company
          restaurant sales and franchise fees and royalties.  Company, franchise
          and  system-wide  comparable  sales  increased  0.3%,  4.9% and  3.7%,
          respectively, in the 2005 quarter. We have had 27 consecutive quarters
          of positive  system-wide  comparable sales growth. We currently expect
          system-wide  comparable  restaurant  sales to  increase by at least 3%
          percent in fiscal 2005,  with results  expected to  accelerate  in the
          latter  half of the  year as  comparisons  become  easier.  Comparable
          restaurant  sales  increases  are driven by  increases  in the average
          guest check and/or  increases in guest  traffic.  Average  guest check
          increases  result  from menu price  increases  and/or a change in menu
          mix.  Although we may have  increases in our average  guest check from
          period to period,  our main focus has been increasing guest traffic as
          we view this  component  to be more  indicative  of the  health of the
          Applebee's brand. We are constantly  seeking to increase guest traffic
          by focusing on operations and improving our menu with  semi-annual new
          menu  rollouts and  implementation  of new programs such as Carside to
          Go(TM) and Weight Watchers(TM).  Carside To Go(TM) is expected to be a
          driver of company,  franchise and system-wide  comparable sales growth
          in fiscal 2005.

     o    Company  restaurant  margin - company  restaurant  sales less food and
          beverage, labor, direct and occupancy restaurant costs and pre-opening
          expenses expressed as a percentage of company

                                       16`

---

`restaurant  sales.  Company  restaurant  margin  was 15.7% in the 2005
          quarter and we currently  expect that our full year fiscal 2005 margin
          will be similar to the full year fiscal 2004 margin of 15.6%.  Company
          restaurant  margin is susceptible to fluctuations in commodity  costs,
          labor costs and other  operating  costs such as  utilities  costs.  We
          attempt to negotiate  contracts  for the majority of our food products
          in  order to  mitigate  the  impact  of  rising  commodity  costs.  We
          currently expect commodity costs for beef,  poultry and other proteins
          to  increase by  approximately  1.5% in fiscal  2005.  Labor costs are
          impacted  by many  factors,  including  minimum  wage  rate and  other
          employment laws.

     o    General  and  administrative  expenses  - general  and  administrative
          expense expressed as a percentage of total operating revenues. General
          and  administrative  expense  leverage  is a  key  focus  for  us.  We
          currently  expect that  revenues  will grow  faster  than  general and
          administrative  expenses.  In fiscal 2005,  general and administrative
          expenses as a percent of total  revenues are currently  expected to be
          approximately nine percent.

     o    Return on equity - net  earnings  expressed  as a percent  of  average
          stockholders'  equity. We believe this is an important indicator as it
          allows  us  to  evaluate   our   ability  to  create   value  for  our
          shareholders.  We have exceeded our stated goal of at least 20% return
          on equity for the past six years and are a leader in the casual dining
          industry in this category.

The  above  overview  contains  forward-looking  statements.   Please  refer  to
"Forward-Looking Statements" later in this section.

Application of Critical Accounting Estimates

Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations is based upon our condensed consolidated financial statements,  which
were prepared in accordance with accounting principles generally accepted in the
United  States of America.  These  principles  require us to make  estimates and
assumptions  that  affect the  reported  amounts in the  condensed  consolidated
financial  statements  and notes  thereto.  Actual results may differ from these
estimates,  and such  differences may be material to our condensed  consolidated
financial  statements.  We believe  that the  following  significant  accounting
policies involve a significant degree of judgment or complexity.

Inventory  valuation:  We state  inventories  at the  lower of cost,  using  the
first-in,  first-out  method,  or market.  Market is  determined  based upon our
estimates of the net realizable value.

We purchase and maintain  inventories  of certain  specialty  products to assure
sufficient   supplies  to  the  system.  We  review  and  make  quality  control
inspections of our  inventories to determine  obsolescence  on an ongoing basis.
These  reviews  require  management  to make  certain  estimates  and  judgments
regarding  projected  usage which may change in the future and may require us to
record an inventory impairment.

Property and equipment: We report property and equipment at historical cost less
accumulated  depreciation.  Depreciation is provided on a  straight-line  method
over the  estimated  useful  lives of the  assets.  Leasehold  improvements  are
amortized over the lesser of the lease term or the estimated  useful life of the
related  asset.  The useful  lives of the  assets  are based  upon  management's
expectations.  We  periodically  review the assets for changes in  circumstances
which may impact their useful lives. If there are changes in circumstances  that
shorten an asset's useful life, we will recognize increased depreciation expense
for that asset in future periods.

Impairment of long-lived assets: We periodically  review restaurant property and
equipment for  impairment on a restaurant by restaurant  basis using  historical
cash flows as well as current estimates of future cash

                                       17`

---

`flows and/or  appraisals.  We review other  long-lived  assets annually and when
events or circumstances indicate that the carrying value of the asset may not be
recoverable.  The  recoverability is assessed in most instances by comparing the
carrying value to its undiscounted cash flows. This assessment  process requires
the use of estimates and assumptions  regarding  future cash flows and estimated
useful lives which are subject to a  significant  degree of  judgment.  If these
assumptions  change in the  future,  we may be  required  to  record  impairment
charges for these assets.

Income taxes: We record  valuation  allowances  against our deferred tax assets,
when necessary,  in accordance with Statement of Financial  Accounting Standards
("SFAS") No. 109,  "Accounting  for Income  Taxes."  Realization of deferred tax
assets is dependent on future taxable  earnings and is therefore  uncertain.  We
assess the likelihood that our deferred tax assets in each of the  jurisdictions
in which we operate will be recovered from future taxable  income.  Deferred tax
assets  do not  include  future  tax  benefits  that  we deem  likely  not to be
realized.

We are periodically audited by foreign, state and local tax authorities for both
income and sales and use  taxes.  We record  accruals  when we  determine  it is
probable that we have an exposure in a matter relating to an audit. The accruals
may change in the future due to new developments in each matter.


Legal and  insurance  reserves:  We are  periodically  involved in various legal
actions.  We are required to assess the probability of any adverse  judgments as
well as the potential range of loss. We determine the required  accruals after a
review of the facts of each legal action.

We use estimates in the determination of the appropriate liabilities for general
liability,  workers' compensation and health insurance.  The estimated liability
is  established  based upon  historical  claims data and  third-party  actuarial
estimates of  settlement  costs for incurred  claims.  Unanticipated  changes in
these factors may require us to revise our estimates.

We periodically reassess our assumptions and judgments and make adjustments when
significant  facts  and  circumstances  dictate.  A change  in any of the  above
estimates could impact our  consolidated  statements of earnings and the related
asset or liability recorded in our consolidated balance sheets would be adjusted
accordingly.  Historically,  actual results have not been  materially  different
than the estimates that are described above.

Acquisitions

In April 2005, we finalized the acquisition of eight Applebee's restaurants that
were closed in fiscal 2004 by a former franchisee for  approximately  $8,800,000
payable in cash.  In connection  with this  acquisition,  we paid  approximately
$800,000 in cash in the fourth quarter of fiscal 2004,  approximately $5,700,000
in cash in the first quarter of fiscal 2005 and approximately $2,300,000 in cash
in the second  quarter of fiscal 2005. The purchase price of $8,800,000 has been
allocated  to  the  fair  value  of  property  and  equipment  of  approximately
$8,200,000  and goodwill of  approximately  $600,000.  The  restaurants  will be
re-opened  throughout  fiscal 2005 as they are remodeled.  The first  restaurant
opened in March 2005. Our condensed  consolidated  financial  statements reflect
these   restaurants   subsequent  to  the  date  of  acquisition.   Due  to  the
administrative  and training costs to re-enter this market,  this acquisition is
expected to be slightly dilutive to our net earnings for fiscal 2005.

On April 26, 2004, we completed our  acquisition of the operations and assets of
ten Applebee's  restaurants  located in Southern  California  for  approximately
$13,800,000 in cash. Our financial  statements reflect the results of operations
for these restaurants subsequent to the date of acquisition. The


                                18`

---

`purchase  price was  allocated  to the fair value of property  and  equipment of
$2,500,000,  goodwill  of  $10,800,000  and  other net  assets of  approximately
$500,000. This transaction did not have a significant impact on our net earnings
for fiscal 2004.  Company restaurant sales for these restaurants would have been
approximately  $6,600,000  for  the 13  weeks  ended  March  28,  2004  had  the
acquisition occurred at the beginning of that period.

Captive Insurance Subsidiary

In 2002, we formed  Neighborhood  Insurance,  Inc., a Vermont  corporation and a
wholly-owned captive insurance  subsidiary to provide Applebee's  International,
Inc. and qualified  franchisees with workers' compensation and general liability
insurance.  Applebee's International,  Inc. and covered franchisees make premium
payments to the captive  insurance  company which pays  administrative  fees and
insurance claims, subject to individual and aggregate maximum claim limits under
the captive insurance company's reinsurance policies. Franchisee premium amounts
billed by the captive  insurance  company are established based upon third-party
actuarial  estimates of settlement costs for incurred claims and  administrative
fees. The  franchisee  premiums are included in other  franchise  income ratably
over the policy year.  The related  offsetting  expenses are included in cost of
other franchise income.  Accordingly,  we do not expect franchisee participation
in the captive  insurance company to have a material impact on our net earnings.
In fiscal 2005, we reduced the types of insurance  coverage plans which resulted
in  fewer  franchisee   participants  in  our  captive  insurance  program.  Our
consolidated  balance  sheets  include  the  following  balances  related to the
captive insurance subsidiary:

     o    Franchise   premium   receivables  of  approximately   $3,500,000  and
          $1,900,000  as of March 27, 2005 and December 26, 2004,  respectively,
          included in receivables related to captive insurance subsidiary.
     o    Cash  equivalent and other  long-term  investments  restricted for the
          payment of claims of  approximately  $17,400,000 and $16,700,000 as of
          March 27,  2005 and  December  26,  2004,  respectively,  included  in
          restricted assets related to captive insurance subsidiary.
     o    Loss  reserve  and  unearned  premiums  related to  captive  insurance
          subsidiary of  approximately  $22,600,000  and $19,600,000 as of March
          27, 2005 and December 26, 2004, respectively. Approximately $7,500,000
          in both periods is included in other non-current liabilities.
     o    Other  miscellaneous  items,  net,  of  approximately  $1,700,000  and
          $1,000,000  as of March 27, 2005 and December 26, 2004,  respectively,
          included in several line items in the consolidated balance sheets.


                                       19`

---

`Results of Operations

The  following  table  contains   information   derived  from  our  consolidated
statements of earnings  expressed as a percentage of total  operating  revenues,
except where otherwise noted. Percentages may not add due to rounding.

                                                                                    13 Weeks Ended
                                                                           ----------------------------------
                                                                             March 27,         March 28,
                                                                                2005              2004
                                                                           ---------------   ---------------
                                                                                              (as restated)
        Revenues:
             Company restaurant sales....................................         88.8%             87.8%
             Franchise royalties and fees................................         10.8              11.1
             Other franchise income......................................          0.3               1.1
                                                                           ---------------   ---------------
                Total operating revenues.................................        100.0%            100.0%
                                                                           ===============   ===============
        Cost of sales (as a percentage of company restaurant sales):
             Food and beverage...........................................         26.5%             26.1%
             Labor.......................................................         32.8              32.7
             Direct and occupancy........................................         24.5              24.4
             Pre-opening expense.........................................          0.4               0.2
                                                                           ---------------   ---------------
                Total cost of sales......................................         84.3%             83.4%
                                                                           ===============   ===============

        Cost of other franchise income (as a percentage of other
             franchise income)...........................................         76.9%             94.3%
        General and administrative expenses..............................          8.8               9.2
        Amortization of intangible assets................................          0.1                --
        Loss on disposition of restaurants and equipment.................          0.1               0.2
                                                                           ---------------   ---------------
        Operating earnings...............................................         15.9              16.4
                                                                           ---------------   ---------------
        Other income (expense):
             Investment income...........................................          --                0.1
             Interest expense............................................         (0.1)             (0.1)
             Other income................................................          0.1               0.2
                                                                           ---------------   ---------------
                Total other income.......................................          --                0.1
                                                                           ---------------   ---------------
        Earnings before income taxes.....................................         15.9              16.5
        Income taxes.....................................................          5.5               5.8
                                                                           ---------------   ---------------
        Net earnings.....................................................         10.4%             10.7%
                                                                           ===============   ===============



                                       20`

---

`The  following  table  sets  forth  certain  financial   information  and  other
restaurant data relating to company and franchise restaurants, as reported to us
by franchisees:

                                                                                        13 Weeks Ended
                                                                           -----------------------------------------
                                                                               March 27,              March 28,
                                                                                  2005                  2004
                                                                          -------------------    -------------------
   Number of restaurants:
        Company:
            Beginning of period........................................               424                    383
            Restaurant openings........................................                13                      8
                                                                          -------------------    -------------------
            End of period..............................................               437                    391
                                                                          -------------------    -------------------
        Franchise:
            Beginning of period........................................             1,247                  1,202
            Restaurant openings........................................                13                     11
            Restaurant closings........................................                (3)                    (1)
                                                                          -------------------    -------------------
            End of period..............................................             1,257                  1,212
                                                                          -------------------    -------------------
        Total:
            Beginning of period........................................             1,671                  1,585
            Restaurant openings........................................                26                     19
            Restaurant closings........................................                (3)                    (1)
                                                                          -------------------    -------------------
            End of period..............................................             1,694                  1,603
                                                                          ===================    ===================
   Weighted average weekly sales per restaurant:
            Company....................................................       $    48,193           $     48,402
            Franchise..................................................       $    51,277           $     48,769
            Total......................................................       $    50,485           $     48,680
   Change in comparable restaurant sales:(1)
            Company....................................................              0.3%                   8.7%
            Franchise..................................................              4.9%                   8.0%
            Total......................................................              3.7%                   8.2%
   Total operating revenues (in thousands):
            Company restaurant sales...................................       $   270,458           $    243,560
            Franchise royalties and fees(2)............................            33,008                 30,715
            Other franchise income(3)..................................             1,065                  3,115
                                                                          ------------------    -------------------
            Total......................................................       $   304,531           $    277,390
                                                                          ==================    ===================
---------------------------

     (1)  When computing  comparable  restaurant sales,  restaurants open for at
          least 18 months are compared from period to period.
     (2)  Franchise  royalties are generally 4% of each  franchise  restaurant's
          reported monthly gross sales.  Reported franchise sales, in thousands,
          were  $832,997 and $764,116 in the 2005 quarter and the 2004  quarter,
          respectively.  Franchise fees typically  range from $30,000 to $35,000
          for each restaurant opened.
     (3)  Other  franchise  income includes  insurance  premiums from franchisee
          participation  in our  captive  insurance  program  and  revenue  from
          information  technology  products  and  services  provided  to certain
          franchisees.




                                       21`

---

`2005 Quarter Compared With 2004 Quarter

Company Restaurant Sales.  Total company restaurant sales increased  $26,898,000
(11%) from $243,560,000 in the 2004 quarter to $270,458,000 in the 2005 quarter.
Company  restaurant  openings  contributed  approximately  9% of the increase in
total  company  restaurant  sales in the 2005  quarter.  The  acquisition  of 10
restaurants in Southern California in April 2004 contributed approximately 3% of
the increase in company  restaurant sales. These increases were partially offset
by the weighted  average  weekly sales decrease in the 2005 quarter as described
below.

Comparable restaurant sales at company restaurants increased by 0.3% in the 2005
quarter.  Weighted  average weekly sales at company  restaurants  decreased 0.4%
from $48,402 in the 2004 quarter to $48,193 in the 2005 quarter. The increase in
comparable  restaurant  sales  was  due  primarily  to  our  Carside  To  Go(TM)
initiative and menu price increases of  approximately  1.0% in the 2005 quarter.
To Go sales mix  increased  from 9.4% of  company  restaurant  sales in the 2004
quarter  to  10.0%  of  company  restaurant  sales  in the  2005  quarter.  Both
comparable  restaurant  sales  and  weighted  average  weekly  sales at  company
restaurants were negatively impacted by decreases in guest traffic.

Franchise Royalties and Fees.  Franchise royalties and fees increased $2,293,000
(7%) from $30,715,000 in the 2004 quarter to $33,008,000 in the 2005 quarter due
primarily to the increased number of franchise  restaurants operating during the
2005  quarter as  compared  to the 2004  quarter  and  increases  in  franchisee
comparable  restaurant  sales.  Weighted  average  weekly  sales  and  franchise
comparable restaurant sales increased 5.1% and 4.9%,  respectively,  in the 2005
quarter due in part to the  implementation  of the Carside To Go(TM)  program in
most franchise restaurants.

Other Franchise Income.  Other franchise income decreased  $2,050,000 (66%) from
$3,115,000  in the 2004 quarter to  $1,065,000 in the 2005 quarter due primarily
to fewer franchisee participants in our captive insurance program resulting from
the  reduction  of the types of insurance  coverage  plans  offered.  Franchisee
premiums are included in other franchise income ratably over the policy year.

Cost of Company  Restaurant  Sales. Food and beverage costs increased from 26.1%
in the 2004 quarter to 26.5% in the 2005 quarter,  due to higher commodity costs
which were partially offset by menu price increases of 1.0% and better food cost
control.

Labor costs  increased  slightly  from 32.7% in the 2004 quarter to 32.8% in the
2005 quarter.  This increase was due to higher  management and hourly wage rates
and was partially offset by lower management incentive compensation.

Direct and occupancy costs increased  slightly from 24.4% in the 2004 quarter to
24.5%  in  the  2005  quarter  due  primarily  to  higher  utilities,  rent  and
depreciation  expense,  as a percentage of sales, which were partially offset by
lower advertising costs, as a percentage of sales.

Pre-Opening  Expenses.  Pre-opening  expenses  increased  from  0.2% in the 2004
quarter to 0.4% in the 2005 quarter due  primarily  to the number of  restaurant
openings in the 2005 quarter versus the 2004 quarter.

Cost of  Other  Franchise  Income.  Cost of  other  franchise  income  decreased
$2,118,000  (72%) from  $2,937,000  in the 2004  quarter to $819,000 in the 2005
quarter due primarily to fewer franchisee  participants in our captive insurance
program  resulting  from the reduction of the types of insurance  coverage plans
offered.

                                       22`

---

`General  and  Administrative  Expenses.   General  and  administrative  expenses
decreased  from  9.2%  in the  2004  quarter  to 8.8% in the  2005  quarter  due
primarily to the absorption of general and administrative expenses over a larger
revenue base which was partially  offset by higher  compensation  expense due to
staffing levels.

Income Taxes.  The effective income tax rate, as a percentage of earnings before
income  taxes,  decreased  from  34.9% in the 2004  quarter to 34.6% in the 2005
quarter due to a reduction in state and local income taxes.

Liquidity and Capital Resources

Our primary  source of liquidity is cash  provided by  operations.  Our need for
capital   resources   historically   has  resulted  from  the  construction  and
acquisition of restaurants, the repurchase of our common stock and investment in
information  technology  systems.  In the past, we have obtained capital through
public stock offerings,  debt financing, and our ongoing operations.  Cash flows
from our ongoing  operations  include cash  generated from company and franchise
operations,  credit from trade  suppliers,  real  estate  lease  financing,  and
landlord contributions to leasehold  improvements.  We have also used our common
stock as consideration in the acquisition of restaurants.  In addition,  we have
assumed  debt or  issued  new  debt  in  connection  with  certain  mergers  and
acquisitions.  The following  table presents a summary of our cash flows for the
2005 and 2004 quarter (in thousands):

                                                            2005 Quarter      2004 Quarter
                                                          ----------------  ----------------
                                                                             (as restated)
      Net cash provided by operating activities..........   $    50,309       $    32,767

      Net cash used by investing activities..............       (31,137)          (18,089)

      Net cash used by financing activities..............       (23,619)          (23,057)
                                                          ----------------  ----------------
      Net decrease in cash and cash equivalents..........   $    (4,447)      $    (8,379)
                                                          ================  ================

Capital expenditures were $13,796,000 in the 2004 quarter and $24,619,000 in the
2005 quarter.  In fiscal 2005,  we currently  expect to open at least 50 company
restaurants,  and capital  expenditures  excluding  franchise  acquisitions  are
expected to be between  $140,000,000  and  $150,000,000  including  the costs to
acquire and re-open eight company restaurants that were closed in fiscal 2004 by
a former franchisee in Memphis, Tennessee but excluding the costs to acquire the
assets of 12 Applebee's restaurants in Missouri, Kansas and Arkansas.

These  expenditures  will primarily be for the  development of new  restaurants,
refurbishment  and  capital   replacement  for  existing   restaurants  and  the
enhancement of information systems.  Because we expect to continue to purchase a
portion  of our  sites,  the  amount  of  actual  capital  expenditures  will be
dependent  upon,  among other  things,  the  proportion  of leased  versus owned
properties.  In  addition,  if  we  open  more  restaurants  than  we  currently
anticipate or acquire  additional  restaurants,  our capital  requirements  will
increase accordingly.

On April 12,  2005,  we  announced  that we have  reached  an  agreement  with a
franchisee  to acquire  the assets of 12  Applebee's  restaurants  in  Missouri,
Kansas and Arkansas for approximately $39,500,000 in cash at closing, subject to
adjustment pursuant to agreed upon prorations and adjustments.  This acquisition
is expected to close in the second quarter of fiscal 2005,  subject to obtaining
operating licenses and other third-party consents.

                                       23`

---

`In December  2004, we completed the  refinancing of our  $150,000,000  unsecured
revolving  credit  facility.  The  new  bank  credit  agreement  provides  for a
$150,000,000 five-year unsecured revolving credit facility, of which $40,000,000
may be used for the  issuance of letters of credit.  The  facility is subject to
various  covenants  and  restrictions  which,  among other  things,  require the
maintenance  of  stipulated   fixed  charge,   leverage  and   indebtedness   to
capitalization  ratios, as defined. There is no limit on cash dividends provided
that the  declaration  and payment of such  dividend does not cause a default of
any other  covenant  contained  in the  agreement.  The  facility  is subject to
standard other terms, conditions,  covenants, and fees. As of March 27, 2005, we
are in compliance with the covenants  contained in our credit  agreement.  As of
March 27, 2005, we had borrowings of  $22,000,000,  standby letters of credit of
$12,000,000  outstanding  and  approximately  $116,000,000  available  under our
revolving  credit  facility.  During fiscal 2005, we expect to fund  operations,
capital expansion, any repurchases of common stock, and the payment of dividends
from operating cash flows and borrowings under our revolving credit facility.

In October 2004, our Board of Directors authorized additional repurchases of our
common  stock of up to  $150,000,000  beginning  in fiscal  2005 and  approved a
written plan for repurchases of our common stock in the open market.  During the
2005 quarter,  we  repurchased  728,300 shares of our common stock at an average
price of $25.62 for an aggregate cost of  $18,700,000.  As of March 27, 2005, we
had $131,300,000 remaining under our repurchase authorization.

As of March 27,  2005,  our  liquid  assets  totaled  $6,477,000.  These  assets
consisted  of  cash  and  cash  equivalents  in the  amount  of  $6,195,000  and
short-term  investments in the amount of $282,000.  The working  capital deficit
increased  from  $51,041,000  as of December 26, 2004 to $54,769,000 as of March
27, 2005.  This increase was due primarily to increases in accrued  income taxes
and  decreases in cash and cash  equivalents  due to  repurchases  of our common
stock in the 2005 quarter and was  partially  offset by the  redemption  of gift
cards in the 2005 quarter sold in fiscal 2004.

We believe that our liquid assets and cash generated from  operations,  combined
with borrowings  available under our credit  facility,  will provide  sufficient
funds for capital expenditures,  repurchases of our common stock, the payment of
dividends and other such operating activities for the foreseeable future.

                                       24`

---

`The following table shows our debt amortization  schedule,  future capital lease
commitments (including principal and interest payments),  future operating lease
commitments and future purchase obligations as of March 27, 2005 (in thousands):

                                                                          Payments due by period
                                                   ----------------------------------------------------------------------
                    Certain                                       Less than 1       1-3           3-5      More than 5
            Contractual Obligations                   Total           year         Years         years        years
-------------------------------------------------  -------------  ------------- ------------- ------------ -------------
Long-term Debt (excluding capital
   lease obligations) (1).......................   $  23,516      $   2,128     $     184     $ 20,092      $  1,112
Capital Lease Obligations.......................       8,910            774         1,630        1,746         4,760
Operating Leases (2)............................     347,590         24,272        48,562       48,824       225,932
Purchase Obligations - Company (3)..............     121,936         93,492        17,230       11,214          --
Purchase Obligations - Franchise.(4)............     209,634        153,574        33,510       22,550          --

(1) The amounts for long-term debt are primarily  borrowings under our revolving
credit facility and exclude interest payments which are variable in nature.

(2) The amounts for operating  leases  include  option  periods where failure to
exercise such options would result in an economic  penalty such that the renewal
appears reasonably assured.

(3) The amounts for company purchase  obligations  include  commitments for food
items,  energy,  supplies,   severance  and  employment  agreements,  and  other
miscellaneous commitments.

(4) The amounts for franchise purchase  obligations include commitments for food
items and supplies made by Applebee's  International,  Inc. for our franchisees.
Applebee's  International,  Inc.  contracts  with  certain  suppliers  to ensure
competitive   pricing.   These  amounts  will  only  be  payable  by  Applebee's
International,  Inc. if our franchisees do not meet certain minimum  contractual
requirements.

Other Contractual Obligations

We have outstanding  lease  guarantees of approximately  $18,800,000 as of March
27, 2005 (see Note 4 to the condensed  consolidated  financial  statements).  In
addition, we or our subsidiaries are contingently liable for various leases that
we have assigned in connection  with the sale of restaurants to franchisees  and
other parties,  in the potential  amount of $17,700,000.  We have not recorded a
liability for these guarantees as of March 27, 2005 or December 26, 2004.

We have severance and employment  agreements with certain officers providing for
severance  payments  to be  made  in  the  event  the  associate  resigns  or is
terminated   related  to  a  change  in  control.   The  agreements  define  the
circumstances  which  will  constitute  a change in  control.  If the  severance
payments had been due as of March 27, 2005,  we would have been required to make
payments totaling approximately $13,200,000.  In addition, we have severance and
employment  agreements with certain officers which contain severance  provisions
not  related  to a change in  control.  Those  provisions  would  have  required
aggregate  payments  of  approximately  $6,900,000  if such  officers  had  been
terminated as of March 27, 2005.

In November 2003, we arranged for a third-party  financing company to provide up
to $75,000,000  to qualified  franchisees  for short-term  loans to fund remodel
investments, subject to our approval. Under the terms of this financing program,
we will  provide a limited  guarantee  pool for the loans  advanced  during  the
three-year  period ending December 2006. As of March 27, 2005,  there were loans
outstanding to four franchisees for approximately $1,300,000 under this program.

In May 2004,  we arranged for a third-party  financing  company to provide up to
$250,000,000  to  qualified  franchisees  for loans to fund  development  of new
restaurants  through  October 2007,  subject to our approval.  We will provide a
limited guarantee of certain loans advanced under this program.  As of March 27,
2005,  there  were  loans  outstanding  to  two  franchisees  for  approximately
$14,100,000 under this program. The fair value of our guarantees under these two
financing programs was less than

                                       25`

---

`$100,000 and is recorded in non-current  liabilities in our consolidated balance
sheet as of March 27, 2005.

New Accounting Pronouncements

In December  2004,  the FASB issued SFAS No. 123  (revised  2004),  "Share-based
Payment,"   which   replaces   SFAS  No.  123,   "Accounting   for   Stock-Based
Compensation,"  and supercedes APB Opinion No. 25,  "Accounting for Stock Issued
to Employees." SFAS No. 123 (revised 2004) requires  compensation  costs related
to  share-based   payment   transactions  to  be  recognized  in  the  financial
statements.  With limited  exceptions,  the amount of compensation  cost will be
measured  based on the fair value on the grant  date of the equity or  liability
instruments issued. Compensation cost will be recognized over the period that an
employee  provides  service for that award,  resulting  in a decrease in our net
earnings.  This new Standard,  as amended, will be effective for us beginning in
fiscal 2006. We are evaluating  the impact of this Standard on our  consolidated
financial statements.

In March 2005,  the FASB  issued FASB  Interpretation  No. 47,  "Accounting  for
Conditional Asset Retirement Obligations," ("FIN 47"). FIN 47 clarifies that the
term  "conditional"  as used in SFAS No. 143,  "Accounting for Asset  Retirement
Obligations,"  which refers to a legal obligation to perform an asset retirement
activity even if the timing and/or  settlement are conditional on a future event
that may or may not be within the control of an entity. Accordingly,  the entity
must record a liability for the conditional  asset retirement  obligation if the
fair value of the obligation can be reasonably estimated.  The Interpretation is
effective  for us no  later  than  the  end  of our  2005  fiscal  year.  We are
evaluating the impact of FIN 47 on our consolidated financial statements.

Forward-Looking Statements

The  statements  contained  in the  "Management's  Discussion  and  Analysis  of
Financial  Condition and Results of  Operations"  section  regarding  restaurant
development,  comparable sales,  Carside To Go(TM),  revenue growth,  restaurant
margin,   commodity  costs,   general  and  administrative   expenses,   capital
expenditures, return on equity and financial commitments are forward-looking and
based on current  expectations.  There are several risks and uncertainties  that
could cause actual  results to differ  materially  from those  described.  These
risks  include  but are not  limited  to our  ability  and  the  ability  of our
franchisees to open and operate additional restaurants  profitably,  the ability
of our franchisees to obtain financing, the continued growth of our franchisees,
our ability to attract and retain qualified  franchisees,  the impact of intense
competition  in the casual dining segment of the  restaurant  industry,  and our
ability to control  restaurant  operating  costs  which are  impacted  by market
changes, minimum wage and other employment laws, food costs and inflation. For a
more  detailed  discussion  of the  principal  factors  that could cause  actual
results to be materially  different,  you should read our current report on Form
8-K which we filed with the  Securities  and Exchange  Commission on February 9,
2005. We disclaim any obligation to update forward-looking statements.


                                       26`

---

`Item 3.       Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risk from fluctuations in interest rates and changes in
commodity  prices.  Our revolving  credit  facility bears interest at either the
bank's prime rate or LIBOR plus 0.5%, at our option.  As of March 27, 2005,  the
total amount of debt subject to interest rate fluctuations was $22,000,000 which
was outstanding on our revolving credit facility.  A 1% change in interest rates
would  result in an increase or  decrease  in interest  expense of $220,000  per
year.  We may from time to time  enter into  interest  rate swap  agreements  to
manage the impact of interest  rate  changes on our  earnings.  Many of the food
products we purchase  are subject to price  volatility  due to factors  that are
outside of our control such as weather,  seasonality  and fuel costs. As part of
our  strategy to moderate  this  volatility,  we have  entered  into fixed price
purchase commitments.

Item 4.       Controls and Procedures

As of March 27, 2005,  we have  evaluated  the  effectiveness  of the design and
operation of our disclosure  controls and procedures  under the  supervision and
with  the  participation  of the  Chief  Executive  Officer  ("CEO")  and  Chief
Financial Officer ("CFO"). Based on this evaluation,  our management,  including
the CEO and CFO,  concluded  that our disclosure  controls and  procedures  were
effective.  During our most recent fiscal quarter, there have been no changes in
our internal control over financial reporting that occurred that have materially
affected or are reasonably likely to materially affect our internal control over
financial reporting.


                                       27`

---

`PART II. OTHER INFORMATION

Item 1.         Legal Proceedings

We are involved in various  legal  actions which  include,  without  limitation,
employment law related  matters,  dram shop claims,  personal  injury claims and
other such normal restaurant  operational matters. In each instance,  we believe
that we have meritorious  defenses to the allegations made and we are vigorously
defending these claims.

We believe that the ultimate disposition of these matters will not, individually
or in the  aggregate,  have a  material  adverse  effect  upon our  business  or
consolidated financial position.


Item 2.         Unregistered Sales of Equity Securities and Use of Proceeds

(c) Issuer Purchases of Equity Securities.

------------------------------------------------------------------------------------------------------------
                        Purchases of Equity Securities(1)
------------------------------------------------------------------------------------------------------------
                                 (a)           (b)              (c)                        (d)
---------------------------- -------------- ---------- ------------------------- ---------------------------
                                                                                  Maximum Dollar Value of
                                            Average     Total Number of Shares     Shares that May Yet Be
                             Total Number    Price       Purchased as Part of    Purchased Under the Plans
                               of Shares    Paid Per      Publicly Announced            or Programs
          Period               Purchased     Share        Plans or Programs            (in thousands)
---------------------------- -------------- ---------- ------------------------- ---------------------------
December 27, 2004 through
January 26, 2005               728,300         $25.62          728,300                    $131,377
---------------------------- -------------- ---------- ------------------------- ---------------------------
January 27, 2005 through
February 26, 2005                7,066(2)      $28.30             --                      $131,377
---------------------------- -------------- ---------- ------------------------- ---------------------------
February 27, 2005 through
March 27, 2005                     --          --                 --                      $131,377
---------------------------- -------------- ---------- ------------------------- ---------------------------
           Total               735,366                         728,300
============================ ============== ========== ========================= ===========================

(1)  In October 2004, our Board of Directors authorized  additional  repurchases
     of our common stock of up to $150,000,000 beginning in fiscal 2005.
(2)  Represents shares received as partial payment for shares issued under stock
     option plans.

Item 6.         Exhibits

The Exhibits listed on the accompanying Exhibit Index are filed as part of this
report.

                                       28`

---

`SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                             APPLEBEE'S INTERNATIONAL, INC.
                                             (Registrant)



Date:    April 27, 2005                      By:  /s/    Lloyd L. Hill
         ------------------------                -------------------------------------------
                                                  Lloyd L. Hill
                                                  Director, Chairman of the Board and Chief
                                                  Executive Officer
                                                  (principal executive officer)

Date:    April 27, 2005                      By:  /s/    Steven K. Lumpkin
         ------------------------                -------------------------------------------
                                                  Steven K. Lumpkin
                                                  Director, Executive Vice President, Chief
                                                  Financial Officer and Treasurer
                                                  (principal financial officer)

Date:    April 27, 2005                      By:  /s/    Beverly O. Elving
         ------------------------                -------------------------------------------
                                                  Beverly O. Elving
                                                  Vice President and Controller
                                                  (principal accounting officer)



                                       29`

---

`APPLEBEE'S INTERNATIONAL, INC.
                                  EXHIBIT INDEX


  Exhibit
   Number                       Description of Exhibit
------------- --------------------------------------------------------------


     31.1 Certification of Chairman and Chief Executive Officer Pursuant to SEC
          Rule 13a-14(a)
     31.2 Certification  of  Chief  Financial   Officer  Pursuant  to  SEC  Rule
          13a-14(a)
     32.1 Certification  of  Chairman  and  Chief  Executive  Officer  and Chief
          Financial Officer Pursuant to 18 U.S.C. Section 1350


                                       30`