Franchise exec’s idea to lower restaurant pay gets harsh rebuke: from public, company
A leaked email from a mid-level executive at an Applebee’s franchise group predicting that inflation and higher gasoline costs would help the restaurants attract employees for lower wages is creating a stir on social media.
The email from the American Franchise Capital executive led managers of a Lawrence restaurant to resign in protest, according to one news report, and provoked outrage on Reddit, where it appeared under the headline, “Applebee’s Executie (sic) claims higher gas prices make people more desperate so we can pay them less.”
The email didn’t put it exactly that way, but it came close.
A spokesman for AFC said the email sent from Wayne Pankratz to other company officials does not reflect the company’s position. Pankratz’s LinkedIn page says he is executive director of operations for Applebee’s restaurants.
“Most of our employee base and potential employee base live paycheck to paycheck,” Pankratz wrote fellow executives on March 6. “Any increase in gas prices cuts into their disposable income. As inflation continues to climb and gas prices continue to go up, that means more hours employees will need to work to maintain their current level of living.”
He went on to say that those rising costs, and the fact that people have run out of government stimulus money and extended unemployment benefits, will work to the advantage of companies like AFC.
Furthermore, he wrote, the company’s small, mom-and-pop competitors are going to face some tough choices under the current business conditions and will either have to raise prices or pay employees less to hit their profit margins.
“Some businesses will not be able to hold on,” Pankratz wrote. “This is going to drive more potential employees into the hiring pool.”
As that happens, employees won’t be able to demand the $18 to $20 an hour many were getting when the demand for workers outstripped supply.
“The labor market is about to turn in our favor,” Pankratz concluded. “What can you do? Besides hiring employees in at a lower wage to decrease our labor (when able) make sure you have a pulse on the morale of your employees. …
“Many will need to work more hours or get a second job. Do things to make sure you are the employer of choice. Get schedules completed early so they can plan their other jobs around yours. Most importantly, have the culture and environment that will attract people.”
AFC, based in Atlanta with offices in Kansas City, owns more than 100 Applebee’s and Taco Bell restaurants in the Midwest.
AFC spokesman Scott Fischer said the email does not reflect the company’s policies or culture and that the author of the email has no authority to issue any company directives related to hiring.
“He doesn’t have the authority to create policy for our company for the brand or anything. ... Maybe he wrote it in the middle of the night. I don’t know,” Fischer said. ”The main message here is that this in absolutely no way, shape, or form speaks to our policies or our culture, or anything like that with our brand.”
The email drew more than 60,000 comments in the first nine hours after someone posted it Wednesday on the subreddit called Antiwork.
“Let them eat cake,” one commenter said. “Vive Le Revolution!” wrote another.
American Franchise Capital owns and manages Taco Bell and Applebee’s restaurants in nine states with annual sales in excess of $200 million, according to its LinkedIn page. The company had 329 job openings on its webpage Wednesday.
It’s not clear if those openings included the jobs vacated by three out of the six managers at an Applebee’s in Lawrence who quit this week after seeing the Pankratz email, according to the Lawrence Journal-World. That restaurant was closed Tuesday as a result, but had reopened by Wednesday.
“I was just stunned and disgusted,” one of the managers who quit told the newspaper.
This story was originally published March 23, 2022 at 4:25 PM.
