Latest updated June 11, 2024 by

Applebee’s Franchisee Says There Are More Chains Like “Red Lobster” That Are “On The Verge” Of Folding

According to Zane Tankel, the chairman and CEO of Apple-Metro, a large Applebee’s franchisee in the New York City area – he says diners looking for a cheap and convenient bite are leaving the drive-thru behind. In a recent Fox…

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According to Zane Tankel, the chairman and CEO of Apple-Metro, a large Applebee’s franchisee in the New York City area – he says diners looking for a cheap and convenient bite are leaving the drive-thru behind. In a recent Fox Business interview, he notes that rising fast food prices are pushing customers towards casual dining options like Applebee’s.

He points to headlines like the “$18 Big Macs” and “$24 Five Guys combos” as evidence that quick-service restaurants are losing their price advantage and they’re leading customers to re-evaluate their dining choices.

They’re abandoning fast food, quick serve more and more and ironically, going to casual dining,” Tankel said in the interview with Fox Business.

In response to McDonald’s open letter to the public written by President Joe Erlinger, Tankel said: “So what’s he doing? You know, he’s trying to justify, rationalize … What happened to the dollar menu? You use $5.”

The open letter from McDonald’s sought to shutdown viral claims about the chain’s high prices beating inflation. The letter even had a fact or myth section, all designed to have customers believe that their prices aren’t as high they might’ve been led to believe.

Tankel hinted at more troubling news on the horizon, “I can name you two or three others of the size and scope of Red Lobster that are on the verge, rumored to be next.”

Tankel’s sentiments were echoed last week by the former CEO of Hardee’s who predicted mid-level chains would fold, and others would resort to drastic measures like outsourcing to stay afloat.

So yes, a grim picture is being painted for the future of the fast food industry and where it’s heading. Which chains are currently on the chopping block, we can only guess. Several major players have had dozens of closures over the past year and it could be any of them.

Tankel’s comments come amidst a period of rising food and labor costs across the restaurant industry. Now casual dining restaurants like Applebee’s may be positioned to benefit if they can offer a price advantage over fast food.

Applebee’s and Chili’s have both been vying for customers shifting away from fast food by offering better deals in an attempt to lure the disillusioned. And with bigger portions and comparable prices, they’re in a good position to do it. Chili’s recent commercial campaign poked at the drive-thru’s “tiny burger” while dropping a Big Smasher Burger and promoting their deal, the “3 For Me”. A $10.99 offer that includes an appetizer, entrée, and bottomless refills.

Tankel’s comments do raise an interesting question: are Americans rethinking their fast food habits? We’ll likely get a sense soon if this is a temporary trend or a more permanent shift in dining habits.

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