Applebee’s Exec Gloats Over High Gas Prices, Hopes They Will Lead to Cheap Labor

According to leaked emails, Applebee’s franchise executive Wayne Pankratz was enthusiastic about skyrocketing gas prices and encouraged his locations to lower their wages. Everyone has heard that gas prices continue to rise,” read an email that came from the account of Wayne Pankratz, executive director of operations for Applebee’s franchisee Apple Central LLC. “The advantage this has for us is that it will increase application flow and has the potential to lower our average wage. How you ask?”

Pankratz told managers that the pool of people who work at Applebee’s “live paycheck to paycheck” and will be “forced back into the workforce” out of necessity. Pankratz also seemed pleased that skyrocketing gas prices would sting for competitors, and that if Applebee’s could cut wage costs, they would be better positioned. “We all competed to hire out of the limited applicant pool and there was a wage war,” he wrote in the March 9 memo. “They will no longer be able to afford to do this.”

Pankratz predicted that the result would be, “hiring employees in at a lower wage to decrease our labor [costs].” At one point, Pankratz directly urged Applebee’s managers to hire employees at a “lower rate” and to cut wage costs when able.

The memo has sparked a sizable backlash against Applebee’s and caused multiple managers to quit. Jake Holcomb, a former Applebee’s manager at a location in Lawrence, Kansas, quit after seeing the email chain. Holcomb decided to distribute the email chain to fellow employees, which led to mass resignations that caused their location to temporarily.” I was just stunned and disgusted,” Holcomb told the Lawrence World Journal.

By Wednesday, the Lawrence restaurant had reopened. A spokesman for Apple Central LLC confirmed the Lawrence location was closed for a time on Tuesday, but he couldn’t confirm how many employees had quit or what role a lack of employees played in Tuesday’s closing, the Lawrence World Journal reports.

The spokesman took issue with the email chain in a statement to the publication. “It is embarrassing. It really is,” said Scott Fischer, director of communications for Apple Central, which is based in Kansas City and has 47 Applebee’s restaurants in the Midwest. Fischer said that Applebee’s does not have any policy about trying to use higher gas prices as leverage to lower the wages it pays new employees. Fischer said the idea hasn’t been discussed as a potential idea among the company’s top management either, in part, because it doesn’t make much sense.

“I know this probably sounds crazy, but I have no idea what this gentleman was even talking about,” Fischer said. “We are still scratching our head about what this gentleman was thinking.”