Applebee's (NASDAQ:APPB) claims to be having success with the Pick 'N Pair lunch combo promotion that it rolled out two months ago. Let's go with that. Diners can choose from 60 different entree and appetizer combinations. Now let's get shareholders in on the fun by letting them pick their two favorite reasons for the sorry state of the casual dining chain.

Here are the choices:

  • Systemwide comps fell by 4% during the first quarter.
  • Operating revenues clocked in slightly lower than a year ago. Analysts were expecting a 4% uptick.
  • Reported earnings came in at a measly $0.13 per share. Back out discontinued operations and you get $0.29 a share. Continue to back out a series of impairment, restaurant closure, and strategic alternative charges and you get to $0.36 per share. It sounds beefy, but how silly do you feel when you have to work that hard to make yourself look good?
  • Comps have now fallen for four consecutive quarters, ending a once-enviable streak of 31 straight positive quarters.
  • The company avoided a potentially embarrassing proxy fight by conceding to the angry, activist investing group. They say the customer is always right, but doesn't that imply that the company is always wrong?
  • Realizing it's in a funk, the company has put itself up for sale and is now going over non-binding proposals to see if it can smoke out a buyer. You don't throw yourself on the auction block if you think you can mend yourself.

Choose any two. I'm calling the combo meal Pick Impaired.

Things don't look good for the 1,930-unit casual dining chain. Yes, it is joined by other leading restaurants like Brinker International (NYSE:EAT) that have warned of soft first quarters. However, one gets the feeling that Applebee's is feeling the brunt of it. Either that, or maybe I was just seeing things the other day when every other casual dining concept had been renamed T.G.I. Not Applebee's.

The rub here is that Applebee's isn't doomed. It is still profitable. It still has a brand that resonates with the hungry. Some companies like Ruby Tuesday (NYSE:RT) seemed much worse off before menu tweaks and some operational improvements turned things around. However, we live in impatient times. Activist shareholders can rock the boat to the point where it takes on too much water.

Applebee's is trading closer to its 52-week high than its low because investors smell a buyout. It probably will happen. The Pick 'N Pair will take on new meaning as the company gets paired up with a top-bidding private equity firm. Shareholders may not like the taste of it, but it seems to be the only meal on the menu at this point.

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Longtime Fool contributor Rick Munarriz needs to drive 7.2 miles to get to his nearest Applebee's -- but he'll do it gladly if he's hungry enough. He does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.