Bad Apples – The New Economy Lessons of Applebee’s Social Media Implosion

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An aspect of traditional business practice that increasingly cannot be kept behind closed doors is the treatment of individual staff by the leaders and managers of a business. It is not uncommon that a large business may invest considerable money in developing its branding and the brand values and related image.

However unless that company links the brand values to the true leadership and cultural values that are practiced inside the business, then the risk is that an incident, event or set of practices may occur or exist which expose the business as being wrong, unfeeling, inconsiderate, corrupt or deceitful.

In the area of Conscious Business we place in our Conscious Business Methodology that area of practice that concerns interactions between managers and their individual staff as an “I/WE” dynamic or quadrant. The emotional brand energy of any business is primarily played out in the one-to-one relationships that go on day to day, whether they be manager to staff member, staff member to customer, or staff member to another stakeholder (e.g. supplier).

Truly great businesses have the emotional intelligence that allows positive and constructive one-to- one relationships and interactions to take place without fear, recrimination, and which embody and practice the core values of that business.


When it goes wrong, as we see below in the Applebee example, we can find a ripple effect of how an internal issue flows into the outside environments (“ITS”) and how poor use of communication tools (“IT” ) can amplify the issue to a crisis that in the New Economy can seriously damage a company’s image and business income.

Many businesses have been successful in the Old Economy in maintaining their projected brand values in the hearts and minds of the community. They have often built their brands using effective branding and marketing strategies that were based on “inside out “thinking”.

This form of command and control is the traditional way of attempting to create perception from the “inside” and then to control and evoke the sentiment and goodwill of the consumers “out there”. In the past any poor decision making within a business was not always so transparently revealed to outsiders.

This may be at the owner/leadership levels through self serving or dysfunctional behaviours, lack of knowledge or skills, or a systemic set of issues around process and systems that would have created a negative impact if known by consumers. Research reveals that most business issues relate to the human element and not the business process, systems or mechanistic side of the business model.

What is not apparent to many businesses is how far and how quickly the pendulum has swung in terms of the “inside out” approach to business being hijacked by the enabling of an “outside in” campaign through the internet and normally via social media. This new dynamic is controlled and executed by outsiders who tend to ignore and even amplify their critical feedback when a business attempts to regain the agenda through command and control techniques.

Applebee is a dominant American café chain who have about 2,000 outlets employing some 28,000 people across the United States. They have a prominent brand whose brand value has been carefully built up over time as they expanded. They have a replicated or targeted a form of a “customer experience” in a general sense that underpins their brand experience.

In the Old Industrial Economy it was more or less true that if an incident occurred at one outlet of any major national chain or brand then the chance of it going viral due to on-reporting and becoming part of mass consciousness was slim. Because of this many business sins never made it into the public domain and so businesses were not so mindful of their local behaviours in local communities.

In the New Economy we find that the brand equation has drastically transformed to a new position where the consumer and the public at large control the company brand. How can this be true?

The advent of the internet and the rising levels of living standards and education in consumer communities worldwide has been a game changer for businesses. The average consumer now operates from a higher consciousness than just satisfying survival needs and they are now turning their attention to higher aspiration needs and concerns.

The advent of online and mobile technologies allow for the average person to report on their own personal day to day experiences in a way not previously possible. The advent of social media sites has brought collective audiences into an arena where the “little people” stories carry resonance, empathy and meaning for others.

The online access to information and commentary has proven to have elevated the average consumer to a savvy place of attitude, opinion, and the ability through search engines like Google, to check the validity of information placed in front of them as fact. Even if you do not have an opinion there are multitudes who do about any subject raised online.

As consumers self-educate and become more self-aware and community conscious there is an emerging informal protocol of “neighbourhood watch” in a digital sense. Research also shows consumers are increasing looking to partner with brands who express key values that positively engage the local community through contribution, ethical practice, social responsibility, and environmental sustainability.

Likewise we find that consumers and communities are protesting when local businesses act inappropriately. The “outing” of a business behaving badly can go viral if it taps into consumer or community sentiment about a theme or issue that have more than just a local emotional resonance or impact.

A business who would participate in the local digital community as part of its brand promotion and marketing must understand what is the online etiquette and the transparency by which it will be examined by others. If a company lacks values, behaves badly, or tries to manipulate consumers through its social media presence then it is at risk of being “outed” and shamed, and may suffer considerable reputation and brand damage as a result.

The story of Applebee highlights some of these key drivers and dynamics and is a case in point for how New Economy ways of being, doing and behaving are critical for business success. In this story we see how the dismissal of a single employee for conduct mirrored to it by the company itself in other ways, led to a spiralling crisis where Applebee would have wished it had thought through it treatment of its employee, and how it engaged with the digital community as a consequence to a storm of protest.

Applebee did have an overall reputation as a fair employer. The saga begun for Applebee after a waitress in their St. Louis store was fired for posting a photo of a customer’s receipt which included his legible signature on social media platform Reddit. The rest they say is history.

The story might not have attracted as much interest as it did except for the fact that the customer was a pastor of a church who behaved in a scrooge like fashion by making a pontificating statement about having to pay an 18% tip for the food service.

All Churches have been getting a caning for double standards and sexual abuse scandals for some time and so individual Pastor’s are often seen cynically as self-serving and not to be trusted as a result. This particular pastor led with his chin when he wrote on the payment receipt “I only give God 10% why do you get 18%!!”.

The Pastor is talking about the 10% tithe that church followers pay to the church as part of their religion. His lack of compassion in supporting a waitress in earning what little they do by living off tips from customers was a central defining issue here that shocked and revolted online community members, who then went to town on the Pastor and also Applebee.

Applebee’s sins were to some degree worse and multiple as they then embarked upon a course of action that was a fully failed strategy of self-justification and then alleged cover-up of their social media reporting of the sacking of the waitress, Chelsea Welch.

This was manifested by the attempts to rewrite their Facebook timeline through careful edits, deletes and pastes in a tawdry attempt to manage their image and manipulate history. Their perceived lack of integrity in their handling of the issue was a focal point of attack by internet prosumers, “trolls” and the average online consumer and community members.

A key point in this story is that Applebee was shown to have posted similar customer receipts online when it suited them and when that revolved around how the customer experience was fantastic. Applebee had set a precedent that this was legitimate behaviour and encouraged staff to find such examples of good feedback for publication in various forums.


Applebee’s own social media policy encourages the publication and feedback of good and bad customer experiences. The posting of that customer receipt online was deemed by Applebee to breach corporate policy. Inspection of that policy reveals it may be true in a technical sense when one reads such a policy, but when viewed from the operational practices that had gone before then her actions then it is not such a black and white issue.

The Applebee Franchisee’s Employee Hand Book includes their social media policy and states:

“Employees must honour the privacy rights of APPLEBEE’s and its employees by seeking permission before writing about or displaying internal APPLEBEE’S happenings that might be considered to be a breach of privacy and confidentiality. This shall include, but not be limited to, posting of photographs, video, or audio of APPLEBEE’S employees or its customers, suppliers, agents or competitors, without first obtaining written approval from the Vice President of Operations…..Employees who violate this policy will be subject to disciplinary action, up to and including termination of employment”.

They reported through their company spokesperson, Will Smith that “Transparency matters to us …. And we want to hear from our guests regardless of the subject matter.” They have a position within the company which is designed to respond to positive and negative online media posts as their ethos is “to be as open and accessible as possible”.

Welch was not the actual waitress served up that insult by the Pastor but felt moved to post it online. She was then sacked and from there a small snowball started to run downhill gathering momentum as it touched a raw online nerve across America.

Thousands of Facebook and other online platform comments poured in, some attacking the Pastor, some attacking Applebee, and most supporting the waitress. Applebee could have stemmed the tide by apologising but instead started digging a hole for itself by attempts at self-justification.

A key point of the saga is that when a business attempts to be right rather than in truth with its audience then it can expect scrutiny and anger from that audience if they uncover an attempt to be less than honest.

As the incident exploded there appears in their Facebook posts to be an attempt to hide behind cut and pastes of corporate policy statements. This is a no-no as integrity online is perceived as being a personal response to a directly expressed concern. If you point the corporate spin monster towards the online community then you are spoiling for a fight.

In the New Economy you are dealing with educated and aware consumers who are not going to accept being treated as idiots or patronised with motherhood statements. As the consumer posts became more derogatory and negative the Old Economy mindset showed up – let’s disable the posts on Facebook and let’s sanitise the site by deleting posts which were not kind to Applebee.

When Applebee ventured back into what was now enemy territory online it was soon ambushed. It led with a post that again was corporate speak, and they gave the appearance that they had hid their previous posts plus the comments thread that held the anger and contempt of over 20,000 user responses. They were either at best incompetent or at worst manipulative.

If they thought people had moved on and they could do cosmetic surgery on their Applebee site and move on they were mistaken. The majority of consumers were waiting and watching and their browsers were loaded up with their previously made posts which Applebee had now unkindly made inaccessible or had deleted.

The blood bath that followed was an online version of Custer at his last stand. Applebee’s credibility, reputation and brand was scalped and hung out for all to see. Professionals such as lawyers were now coming forward to the rescue of the waitress and offered to represent her in suing Applebee for no fee.

A public campaign to boycott Applebee stores was created online and given energy by the massing audiences who were by now baying for blood. Applebee had nowhere to run as their alleged deception was exposed as users reposted comments back online and then also the original statements by both the waitress and Applebee themselves.

The outing campaign had gone viral and was picked up worldwide by the popular media with stories appearing in television and print media channels, as well as the millions of re-posted, re-emailed, and re-tweeted online references to the scandal. Applebee no longer owned the agenda nor the argument and had no control over the outcome.

The kangaroo court that assembled online tried and found Applebee guilty as charged without any further evidence or pleadings being required by the defendant Applebee. A once proud brand lay trampled in the dirt of its own mishandling of the issue, and its alleged deception and arrogance with which it had approached this issue.

Applebee were found guilty by the online community of unfair treatment of one of its employees, of attempting to criticise users, of deleting and hiding posts, of censorship or manipulation or spin- doctoring. Social online etiquette demands companies listen to feedback and show you understand their concerns.

It is sometimes better to be a small target by not responding as we all love gossip and conjecture and every new word is open to scrutiny, perception filtering, and the subjective meaning making process of our minds. Amplify that by those words being processed by thousands of minds and you are liable to be perceived and judged in a negative way by some subset of that audience.

Applebee has not helped the situation by refusing to re-hire the waitress. This confirms to many that there are no real core values at Applebee than being right and making money. This is a dangerous place for Applebee to leave its brand in within the minds of many in the community. They have become a rotten apple now for some.

In the new economy these short comings and failures will be magnified and those who remain unconscious or deceptive are at risk of going the way of the dinosaurs. The transparency of businesses via the opinions of “prosumers”, “trolls”, and everyday users of products, services and the businesses they are sold from, means that opinions now count more than marketing and advertising can ever hope to influence in the future.

The businesses that take the Old Economy ways of thinking and behaving online are going to find themselves in hostile territory. Many such businesses have been able to hide their sins behind corporate walls, legal action, spin doctors and slick marketing. This will not be a workable strategy moving forward as consumers now increasingly control the company brand and reputation.

It is just like the old Buddhist saying that “ the elephant may trample many thousands of ants but eventually the ants will bring down and devour the elephant”. The internet and its online community platforms are like ant nests full of potentially angry ants.

They are ready to mobilise and bring down the corporate elephants who stomp around indifferent to whom they step on and crush in their narcissistic self-entitlement and self serving ways of being. Just ask Applebee.


Conscious Business Australia is uniquely positioned to assist you in your business journey towards the new economy. We transcend traditional old economy business and leadership coaching and consulting models by bringing to bear our innovative and leading edge Conscious Business Methodology.

Our unique combination of skills, insight, experience and methodologies enable us to stand apart from the tired old coaching and consulting “experiences” that still dominate the business world using old economy constructs and principles.

Come across and try the Conscious Business Australia “experience” which is built on the intersection of psychology, neuroscience, design, project management, marketing, channel design, and digital and physical product design/innovation/imitation philosophies. Have a look at our website www.cbau.com.au for more information, for a much more detailed version of newsletter articles, and for further articles and notifications of other courses and events that we run on a regular basis.

Richard Boyd is CEO and Founder of Conscious Business Australia which offers an innovative and thought leading consulting service for new entrepreneurs, existing business in decline or those who are seeking to update, re-engineer or deal with systemic problems within systems, processes, people or products.

Mob 0407577793
email: richard@cbau.com.au www.cbau.com.au

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