Applebee’s wants to focus less on Cosmic Wings and more on Applebee’s.
Franchisees will still have the option to offer the delivery-only, Cheetos-dusted-chicken-wing concept. But hundreds of stores have ditched it as customers have returned to dining rooms.
“What we’re finding now is that as restaurants reopen, we return to a more normal state … there are some operational complexities that arise trying to manage a virtual brand out of an Applebee’s kitchen,” said President Tony Moralejo in an interview.
Applebee’s launched Cosmic Wings in February 2021. Delivery was booming, and parent company Dine Brands viewed delivery-focused concepts a big part of its future. At one point, Cosmic Wings was in more than 1,000 Applebee’s, where it made up a small but incremental portion of sales. It is now down to about 670 restaurants, Moralejo said. A second virtual brand that was being tested is also apparently off the table.
“We’ve made the decision that the brand and our franchisees are better off if we focus on our core menus, our core equities,” Moralejo said.
The strategy contrasts with that of Applebee’s sister brand IHOP, which has two virtual brands and unveiled a third this week. But the two chains are quite different: IHOP is busiest at breakfast and on weekends, and has been using the virtual brands—which focus on quesadillas, grilled cheese and chicken tenders—to boost volume in slower dayparts.
Chicken wings, on the other hand, tend to fly out the door around dinnertime, when Applebee’s is already busy.
“The dynamics of an IHOP kitchen and the dynamics of an Applebee’s kitchen are completely different,” Moralejo said.
Last year, Applebee’s competitor Chili’s took a similar position on its own virtual wings brand, It’s Just Wings. Once touted as a wellspring of incremental revenue, the brand has been put on the back-burner as Chili’s focuses on its regular business.
Meanwhile, there are signs that delivery is slowing, which could spell more problems for virtual brands. At Applebee’s, customers have been shifting from delivery to takeout recently, Moralejo said. And yet the chain has not sworn off virtual brands completely.
“If we find a virtual brand that’s a better fit for the dynamics of the Applebee’s restaurant, we would absolutely consider it again,” Moralejo said. “If there’s a winning strategy out there, bring it to us.”
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