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Quiz the CEO of Applebees


Cusina
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My husband is an investor. He has a meeting tomorrow with the CEO of Applebees and he is curious, what questions would you ask in this meeting?

What's wrong with peanut butter and mustard? What else is a guy supposed to do when we are out of jelly?

-Dad

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What the heck are "riblets" and what animal do they come from? :laugh:

Seriously, though, I would be concerned with Applebee's identity in a market saturated with similar restaurants...Chili's, Outback, etc. What differentiates them from the rest of the pack? Everyone is familiar with Chili's "I want my Baby Back Ribs". Outback has the Australian voice-over in all their commercials and the Bloomin' Onion.

What does Applebee's have that makes them unique, let alone a dining destination? I never think "Applebee's...Ooh, I really like their [insert favorite dish here]..." because I don't think they have a menu item that really stands out. What dish is Applebee's answer to Chili's Baby Back Ribs? I can't think of a thing (and don't say "riblets"! Ugh).

We have an Applebee's here in town yet I rarely see any television advertising for them, especially when compared to their competitors. Does this mean they don't need to advertise because they have enough business already? Not likely. What kind of advertising campaigns do they have planned for the coming year(s)?

Also, as an investor, I would ask what kind of growth (new franchises) they are projecting in the coming year(s) given the increase in fuel & energy costs as well as with inflation rearing its ugly head.

Sales of SUV's have plummeted as gasoline costs have skyrocketed. The waiting list for hybrid vehicles (with high mpg ratings) grows with each passing day. With more of their money going towards the cost of fuel, the consumer is quickly becoming more economy-minded. Will this impact how often people eat out? And how will Applebee's counteract this to convince the consumer that they can afford to eat at Applebee's?

I hope this helps.

 

“Peter: Oh my god, Brian, there's a message in my Alphabits. It says, 'Oooooo.'

Brian: Peter, those are Cheerios.”

– From Fox TV’s “Family Guy”

 

Tim Oliver

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Chain restaurants seem definitely to be moving towards the extremes, with the Cheesecake Factory and California Pizza Kitchen experiencing immense popularity at the (relatively) high end of the market and places like Subway and Boston Market growing in popularity towards the low end.

Is there still room for an Applebees? Is it intending to market itself as more gourmet-ish (a la Cheesecake Factory)? If so, can it possibly succeed? Is its brand too entrenched in a now-unfertile middle-ground to possible reposition itself?

If you can, I'd love to hear anything interesting that is discovered at this meeting.

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Seriously, though, I would be concerned with Applebee's identity in a market saturated with similar restaurants...Chili's, Outback, etc. What differentiates them from the rest of the pack? Everyone is familiar with Chili's "I want my Baby Back Ribs". Outback has the Australian voice-over in all their commercials and the Bloomin' Onion.

What does Applebee's have that makes them unique, let alone a dining destination?

Are Chili's, Outback, etc. really a dining "destination" for a segment of the public?

Robert Buxbaum

WorldTable

Recent WorldTable posts include: comments about reporting on Michelin stars in The NY Times, the NJ proposal to ban foie gras, Michael Ruhlman's comments in blogs about the NJ proposal and Bill Buford's New Yorker article on the Food Network.

My mailbox is full. You may contact me via worldtable.com.

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Their success and the lines at the door say they are.

I didn't mean "destination" as in "Let's go to New York because the Four Seasons is there."

I am saying these restaurants (Chili's, Outback, etc) are determined choices. Why do people choose to go to one restaurant over another? If they stand out in the restaurant crowd, then it's more likely consumers will choose to eat there specifically for a reason, making them a "destination" eatery instead of something randomly picked after a round of "Where do you want to eat tonight?" "I don't know...Where do you want to eat?" kind of thing.

Edited to clarify

Edited by Toliver (log)

 

“Peter: Oh my god, Brian, there's a message in my Alphabits. It says, 'Oooooo.'

Brian: Peter, those are Cheerios.”

– From Fox TV’s “Family Guy”

 

Tim Oliver

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why can't "i have it my way" like at burger king?

i've gone in several times, and wanted this thing or that thing left out of my order, and i'm always told, sorry ma'am - it comes all shrink-wrapped and ready to go, we can't seperate out that stuff.

seriosuly, do they even have line-cooks there? or just waitrons and microwaves?

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If I were to be a potential investor, I would certainly ask about the company's (lack of) identity in their target market. As pointed out earlier, there seems to be an image of a generic TGOChiliBees, with no real identifier. The menus are all nearly interchangable. The food is fair to good, IMHO, but again, nothing stands out.

Rewriting a popular tune for a TV spot, as seems to be a recent habit, does not do it. I notice it because I've worked as a DJ on and off for the last 15 years. It always makes me cringe.

The skillet concept is lost on me, because you don't need to put cheese on a decent steak and put it on a sizzling platter. Instead of covering everything in cheese, develop a new recipe. Something unique, but not batter dipped and fried. I think they could tap a large market with a reasonably priced, healthier signature dish that could be consistent across the country. I have no real suggestions as to what that would be, but it would have to be available year-round to function as a signature dish.

I have a personal problem with the whole "Cajun" thing that a lot of chain restaurants do. None of it is authentic, and adding garlic powder, cayenne, and salt does not make it Cajun. But this is my own personal pet peeve, and every chain has done this at least once recently. I may try to trademark the word to protect it. :hmmm:

Screw it. It's a Butterball.
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I had the misfortune of being in a culinarily destitute area once and had to eat at Applebees, so my question would be "So you call that s*** food?"

Oh, you mean as an investor? I echo the sentiment about how they will differentiate themselves in such a saturated market with lots of other chains, which, IMO, are much better at the low-mid range Americana food with little (horrible) bits of misinformed, bastardized "ethnic" and "regional" influences (like CHAH-neez Chikin' Salad and Blackened Everything), unless their expansion strategy is strictly aimed at being the first of such kind of restaurant in other culinarily destitute locations.

sg

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Their success and the lines at the door say they are.

I didn't mean "destination" as in "Let's go to New York because the Four Seasons is there."

I am saying these restaurants (Chili's, Outback, etc) are determined choices. Why do people choose to go to one restaurant over another? If they stand out in the restaurant crowd, then it's more likely consumers will choose to eat there specifically for a reason, making them a "destination" eatery instead of something randomly picked after a round of "Where do you want to eat tonight?" "I don't know...Where do you want to eat?" kind of thing.

Edited to clarify

In my experience, Applebees and places like it are chosen by a group of people who really can't decide on one thing. They are just as likely to agree on O Charleys, TGIFridays, or Chili's. After meetings it's usually the default because it has a little bit of everything. Or it's the closest, or it's open at 9pm.

I can honestly say, I've never suddenly turned to someone and said, "Let's go to Applebees." When I choose Applebees, it's because I can see the sign when the urge to eat hits, and there aren't long lines. I will go elsewhere if there will be an extended wait. It's all the same to me.

I mean, how unique can you make mozzerella sticks?

Screw it. It's a Butterball.
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Thanks for your responses... I'll pass them along to him and I'll report back later after the meeting.

They have a new menu that follows the weight watcher program. I was curious why they chose to follow that trend and what kinds of market research that they do to determine what the "average american" diner would like to see on their menu. They must be doing something right, I guess, as the two here in town are always pretty full.

hehehe, Toliver, Riblets is just a funny word all around. Is it some sort of piglet part? ew.

Bux, in my part of the world (north eastern Wisconsin), Chili's and Applebees are indeed destination restaurants. I know, I know, it's not pretty. That is why I feel like they must be doing something right in their market research. They manage to attract a following without a tremendous amount of advertising.

You all should see the place here called the Machine Shed. You would about die. It's shaped like a barn there is a kitchy gift shop and all the wait staff are forced to wear horrific denim overalls. It was very popular here. It feels weird and contrived to me and the food is nothing beyond basic stuff I could make a whole lot better myself. This is a good example of the more extreme chain restraunts. The problem with being extreme is that it is trendy, and therefore goes out of style. This place has been steadily declining over the past few years after a really strong opening. I wonder if Applebees walks the middle of the road deliberately to avoid becoming a fad.

My husband, of course, is interested in the big financial picture, the profit they make and how well managed the chain as a whole is. It is an extremely competitive segment. I'll get back to you all after the meeting this afternoon.

What's wrong with peanut butter and mustard? What else is a guy supposed to do when we are out of jelly?

-Dad

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Oddly enough, a bunch of us at work were talking about these types of eating places. We all agree that when we are traveling, we often default to one of these because, it has been a long day, we are tired, we really don't want to think too much, and we certainly don't have the energy for an adventure.

We started giving our opinions about the various chains. (I think TGIFriday's, Outback, Chilis, and Applebees were mentioned. There may have been some that are more regional.) Applebees came in dead last. The typical phrase... "Well, if it is the only thing I recognize near the hotel." Some said that the quality was really spotty. I have only eaten lunch at one in Brenham, TX several times and have to go EH! on the food and can't say on consistency.

All of that is just more verification of what others have said. As an investor, I would be concerned about a place that seems to exist in an ill-defined middle ground and I can't see where they can go with that in the next few years. Maybe if they changed the name. Applebees? EH!

Linda LaRose aka "fifi"

"Having spent most of my life searching for truth in the excitement of science, I am now in search of the perfectly seared foie gras without any sweet glop." Linda LaRose

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Here's some interesting statistics about Applebee's position relative to their 'casual dining' chain competition. They're still number 1 in terms of sales, but other chains appear to be growing faster and doing better in terms of per restaurant sales. Applebee's just has a lot more locations.

It seems to me that I see ads for Applebee's practically every time I turn on the TV. Pretty annoying, actually.

"I think it's a matter of principle that one should always try to avoid eating one's friends."--Doctor Dolittle

blog: The Institute for Impure Science

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I'd ask if theres any way I could get a CD-R of all of the songs from their recent ad campaign. I'm weirdly obsessed with them. Not that they make me want to eat there or anything though...

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I've never been to the Applebee's in Danbury, CT but it is *the* restaurant of choice for my 16 year-old daughter and her friends. Many a birthday dinner is celebrated there. For my daughter's special day I planned a surprise party at a local hibachi/sushi Japanese Restaurant (was quite good.) I encouraged her and her friends to strongly think outside the Applebee's box. Gotta lead by example.

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I had the misfortune of being in a culinarily destitute area once and had to eat at Applebees, so my question would be "So you call that s*** food?"

Oh, you mean as an investor? I echo the sentiment about how they will differentiate themselves in such a saturated market with lots of other chains, which, IMO, are much better at the low-mid range Americana food with little (horrible) bits of misinformed, bastardized "ethnic" and "regional" influences (like CHAH-neez Chikin' Salad and Blackened Everything), unless their expansion strategy is strictly aimed at being the first of such kind of restaurant in other culinarily destitute locations.

dude - that just dredged up a memory of a business-trip applebee's adventure in schenectady new york.

i had ordered fajitas and umm...it came topped with stewed tomatoes. i was so very confused.

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What is Applebees?

:blink:

they have a very decent margarita, made from "top shelf" tequila, and fresh lime juice. better than i've had at 99% of bars in NYC. and i stand by that comment, no matter how much y'all will make fun of me for enjoying that drink. :raz:

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What is Applebees?

:blink:

they have a very decent margarita, made from "top shelf" tequila, and fresh lime juice. better than i've had at 99% of bars in NYC. and i stand by that comment, no matter how much y'all will make fun of me for enjoying that drink. :raz:

You like a drink from Applebee's! Ha ha!

Noise is music. All else is food.

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So, here's the outcome of the meeting. Chris likes it as an investment. Thinks that they are the wal-mart of the family dining segment. Their sheer size gives them quite a bit of purchasing power with their distributors and therefore a price advantage.

Their car-side delivery has been a huge thing for them too. Basically, you call them up and drive over there, they run the food out to your car so you don't take one more step than necessary. :rolleyes:

Interestingly, their food itself is almost exactly the same as many of the other chains. They just introduced a baby back rib platter. Those ribs come from EXACTLY the same supplier as the Outback, as Chili's, as any other chain you can think of. Applebees, however with it's purchasing power, can offer these for $14, while the Outback charges $20. So, in the middle America mindset, if these places are pretty much interchangeable, you're going to go where you get more for your money.

He did ask about marketing and product line research. They target as their core customer the busy family household that brings in about $65,000 per year (20,000 over the American average) and eats what they want to, without thinking too much about it. This group eats out at least once a week. They spend a huge amount on marketing. 120 million per year! Which is about 3 times the usual in the segment.

Like I supposed, they walk the middle of the culinary road (if you can call this culinary) very purposefully, this way they can be very flexible and follow the trends. P.F. Changs, for example, a more trendy place, is very limited because of their niche, they only can serve foods that seem "Asian" in flavor. If that happens to go out of vouge with the fickle American public, they're kind of screwed. Applebees can put just about anything on their menu. They can be a steakhouse if they want, or a rib joint, or a salad bar. (Of course, in my mind, this means they are doomed to mediocrity foodwise, as they never develop a specialty.) Right now their deal is the new Weight Watchers menu, which has been quite successful.

Their management is top notch, finance wise at least. They work like dogs to keep this beast in shape. Chris was very impressed with them.

So, like it or not, he felt this was a very good long term investment. Applebees isn't going anywhere any time soon. Sorry to be the bearer of bad news...

Edited for accuracy and spelling.

Edited by Cusina (log)

What's wrong with peanut butter and mustard? What else is a guy supposed to do when we are out of jelly?

-Dad

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Thanks for the report. From an investment standpoint that all makes sense. And if the numbers back up the success of their business plan over time, sounds like a good deal.

We got into some investor discussions on this thread. The reaction to changing tastes was discussed there. It kind of reinforces the "stay neutral" theory that they are using.

Linda LaRose aka "fifi"

"Having spent most of my life searching for truth in the excitement of science, I am now in search of the perfectly seared foie gras without any sweet glop." Linda LaRose

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If I had the chance, I would ask them why their steaks SUCK ASS. Seriously, they serve up the most gristly, sinewy cuts of meat I've ever had the misfortune of eating.

Their burgers really aren't all that bad though. Ground meat and bread, hard to screw that up.

:huh:

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  • 2 months later...

the changing face of Applebees

Customers are already seeing changes. The company, seeking to improve its reputation for consistent but pedestrian food, tossed out three-fourths of its menu and took popular but seasonal items, such as baby back ribs, and made them permanent fixtures.

This year also has seen the full rollout of the company's Carside To-Go service, which delivers takeout orders to customers in their vehicles.

(italics mine)

The All American Drive In is back??? :laugh:

Melissa Goodman aka "Gifted Gourmet"

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