CEO behind Applebee’s reveals how the Dollarita played an essential role in the chain’s turnaround
- The Dollarita was the game changer that Applebee’s needed to turn around its business, Steve Joyce, the CEO of parent company Dine Brands, told Business Insider.
- The dollar-drink deal was originally seen as a risk internally, with some franchisees fearing that it would attract people who wouldn’t order food or that people would get too drunk on cheap drinks.
- Since the introduction of the Dollarita, Applebee’s has posted four consecutive quarters of same-store growth after a period of struggling to grow sales.
The Dollarita provided Applebee’s with the key to a massive turnaround.
Dine Brands CEO Steve Joyce told Business Insider in an interview last week that the Dollarita was key to kicking off an Applebee’s turnaround in October 2017, soon after Joyce took over as the top executive at the parent company of Applebee’s and IHOP.
“Dollarita turned everything around,” Joyce said. “It was a 13-point swing between September and October in Applebee’s performance.”
Since the introduction of the Dollarita, Applebee’s has posted four consecutive quarters of same-store sales growth after a period of declines. Last week, the company reported that systemwide same-stores sales in US Applebee’s locations increased 5.5% for the first nine months of the year.
The Dollarita was the game changer Applebee’s needed. Joyce said the deal was seen as a risk internally, with some franchisees feeling reluctant to adopt the dollar-drink deal. In New York City, for example, few restaurants decided to add the Dollarita to the menu in October 2017.
“You worry about, do you attract the wrong element, do people come in and get soused, do they not order food?” Joyce said.
A franchisee in Texas who had already rolled out the Dollarita in restaurants, however, convinced others that the deal was worth a shot. And, he was quickly proved right.
“Ninety-eight percent of the people who came in and ordered those, ordered food,” Joyce said. “Most of the people would have one of those and then move upscale to another cocktail.”
Following the success of the Dollarita, Applebee’s has rolled out one- or two-dollar drink deals every month, doubling down on buzzy deals to attract budget shoppers.
“It got buzz going,” Joyce said.
“On social media initially, back in early October, people said, ‘Well I don’t like Applebee’s but dollar margaritas, I’m in!'” he continued. “And people were upset, and I’m like, get them in the restaurant, serve them well, give them great food, and guess what? They’ll come back. And that’s what’s happened.”