What is in this article?:
- Health care backlash blemishes restaurants' reputations
- Overcoming controversy
Some consumers were put off by restaurant brands' negative response to "Obamacare," according to a new report from YouGov BrandIndex.
Restaurant operators’ post-election opposition to the Patient Protection and Affordable Care Act, commonly known as “Obamacare,” has sparked a public controversy that dinged a few brands’ reputations with consumers.
Following the Nov. 6 re-election of President Barack Obama, which all but ensured that his signature health care reform law would not be repealed, some operators’ public statements about what requirements of the law would mean to their businesses provoked waves of criticism and support from consumers.
According to a new report from consumer perception researcher YouGov BrandIndex, Papa John’s Pizza, Applebee’s and Denny’s experienced a short-term decline in “buzz scores,” which the company uses to measure positive or negative word-of-mouth for brands, for such comments.
BrandIndex calculates a buzz score by interviewing thousands of consumers each weekday about popular brands and asking, “If you’ve heard anything about the brand recently, was it positive or negative?” Negative responses are subtracted from positive ones, and a moving average is calculated on a scale from negative 100 to positive 100, with a score of zero denoting completely neutral word-of-mouth reaction.
While Papa John’s, Applebee’s and Denny’s experienced lower buzz scores after their officials publicly commented about the health care law, any effect on their reputations likely would be temporary as long as mainstream media coverage blows over, said Ted Marzilli, senior vice president of New York-based BrandIndex.
“All things being equal, with no new news, these brands [and their reputations] should recover,” Marzilli said. “Only with repeated incidents would you see the underlying brand health metrics decline and stay down.”
Papa John’s buzz score of 32 on Election Day was the brand’s highest for the month of November, but it started sinking the next day, when chief executive John Schnatter’s comments to a Florida business school were published, indicating, among other things, that Papa John’s franchisees likely would make many employees part-timers in order to avoid a mandate to cover their health insurance.
By Nov. 14, after a lawsuit against the company was certified with class-action status alleging Papa John’s sent thousands of unsolicited text messages, the brand’s buzz score was 22. Eventually, the chain’s score fell further, ending the month at 4.
Zane Tankel, a 40-unit Applebee’s franchisee, told Fox that employer mandates to cover employees’ health insurance would cause him to stop expanding and lay off employees. Applebee’s national brand suffered damage to its national reputation as a result, going from a 35 buzz score on Nov. 5 to a score of 15 by Nov. 17. Applebee’s ended the month with a buzz score of 5.
Similarly, when Florida-based franchisee John Metz told the Huffington Post he would add a 5-percent “Obamacare surcharge” to the bills at his Denny’s locations, the family-dining chain’s national word-of-mouth reputation began declining. The brand's buzz score fell from 10 on Nov. 17, the day of Metz’s comments, to zero on Nov. 26. However, Denny’s buzz scores climbed back up to 6 by the end the month.
The leaders of Applebee’s and Denny’s each issued statements distancing themselves from these public statements from major franchisees.
“It’s debatable whether a brand should let the press cycle run its course or address things like this head-on,” Marzilli said. “It seems like things worked out well for Denny’s … but I’m not sure why Applebee’s [difference in scores] is looking more like Papa John’s.”