QSRs' Buzz Suffers After Obamacare Remarks

by , Dec 3, 2012, 3:36 PM
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Applebees-Store-B3Weeks after controversial remarks about cutting back on workers’ hours as a result of rising costs due to the Affordable Care Act, Papa John’s Pizza and Applebee’s are still suffering negative buzz, reports YouGov BrandIndex.

In mid-November, Papa John’s CEO John Schnatter was quoted as having stated that franchise owners may decide to cut employees’ hours to below 30 per week in order to avoid higher costs of health care under the “Obamacare” plan. 

Around the same time, Zane Tankel, CEO of Apple-Metro, who owns 40 Applebee’s franchises in the New York metropolitan area, said he would freeze hiring and consider cutting workers’ hours in response to the health care costs. 

Also, a few days later, on Nov. 17, Denny’s franchisee John Metz, who also has 40 locations, said he would add a 5% surcharge to customers’ bills and reduce employee hours. 

Applebee’s parent company DineEquity moved quickly to distance itself from Tankel’s remarks, saying that franchisees do not speak for the brand itself. 

And Schnatter subsequently wrote a column (published in The Huffington Post on Nov. 20) explaining that franchisees, who make their own business decisions, might feel pressured to take actions to reduce costs, but all employees of Papa John’s corporate and company-owned stores will continue to be offered health insurance.

Papa John’s -- which got a PR double whammy in the form of news of a class-action suit alleging that the QSR illegally texted consumers, which broke soon after the health care remarks -- saw its BrandIndex Buzz score drop from 32 on Nov. 6 to 22 eight days later.  A few days later, Papa John’s’ score dropped below Pizza Hut’s, and is presently at 4.

Applebee’s had a 35 Buzz score on the eve of Election Day. By Nov. 17, its Buzz score had fallen 20 points. As of this past Thursday, its score was 5.

Nine days after Metz’s remarks, Denny’s’ Buzz score had declined from 10 to zero -- not nearly as much as its competitors’. Furthermore, unlike Papa John’s and Applebee’s, Denny’s’ score has since rebounded to close to where it was prior to the remarks.

YouGov speculates that consumers may have been more responsive to the apology that was issued by Denny’s CEO John Miller a few days after Metz’s remarks. 

The Buzz score, like other BrandIndex scores, is measured daily. It asks respondents: "If you've heard anything about the brand in the last two weeks, through advertising, news or word of mouth, was it positive or negative?" Results were filtered to adults 18 and over who have eaten at casual dining restaurants in the past month.

1 comment on "QSRs' Buzz Suffers After Obamacare Remarks ".

  1. Paula Lynn from Who Else Unlimited
    commented on: December 4, 2012 at 10:35 a.m.
    There are so many very nice small local restaurants with reasonable prices and many BYOB's, especially pizza places. People are not going hungry because there is a lack of restaurants. Denny's in particular is nothing special and rather pricey for their small portions. Go local.

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