Remember when Applebee's (NYSE:APPB) rocked? You may still enjoy your onion peels, chicken fried chicken, and crispy bread pudding as much as before, but have you noticed something? Isn't it a little quieter now than it used to be?

It is. Yesterday, the casual dining operator with nearly 2,000 locations announced that January comps fell by 5.8%. That is stacked on top of -- or below -- an overall dip in 2006.

Before that, Applebee's was as sweet as its name. What exactly is an applebee, anyway? It didn't seem to matter to patrons, who came flocking to the casual-dining giant for its comfort-food eats at reasonable prices. Comps had risen for 31 consecutive quarters, until that streak came to a grease-skidding halt in last year's June quarter.

Sure, streaks end. Cheesecake Factory (NASDAQ:CAKE) saw a decade of positive comps end after 42 quarters. One that is still going strong is BJ's Restaurants (NASDAQ:BJRI). The deep-dish pizza specialist just landed its 41st straight quarter of higher same-unit sales. IHOP (NYSE:IHP) is working on a smaller run, but the pancake-flipping chain has put together 16 straight quarters of improvement.

The rise and fall of Applebee's
Mortality is a given in the fickle casual-dining space. The problem is when companies can't find their way back after they stumble. One can argue that Applebee's isn't really sprawled out on the floor at all. It has had three consecutive quarters of sluggish comps, and even though it's off to a bad start in the current quarter, the company's past performance commands respect.

Comps

Q1 2006

2.6%

Q2 2006

(3.0%)

Q3 2006

(2.3%)

Q4 2006

(1.1%)

Jan. 2007

(5.8%)


Bulls might argue that after a perpetual streak of growing sales at the unit level for nearly eight years, Applebee's can afford to take a breather. This decline is only a little bit of air being let out of a huge balloon.

It's true. The higher you stack favorable comps on top of positive comps, the greater the likelihood that a company will ultimately come up short. It's not the end of the world. However, digging deeper into the January slide, one finds that the shortfall happened despite a menu price hike. Actual traffic for the month was down a sharp 8%. Ouch!

Tough winter weather may explain part of that slip, yet the negative showings in each of the three previous quarters would point to an all-weather problem.

Applebee's isn't the only casual-dining giant on the ropes. Brinker (NYSE:EAT) saw comps slip at all four of its concepts this past quarter. Like Brinker, Applebee's has been busy buying back shares lately, but it's a sad image to see a company eating its own leftovers because nobody else wanted them.

It shouldn't have been this way
Back in August, Applebee's brought on celebrity chef Tyler Florence to introduce some new flavor sensations. That was also the month in which Talladega Nights: The Ballad of Ricky Bobby hit the local multiplex. Applebee's played a prominent role in the movie, with an actual commercial even embedded into a prolonged crash sequence.

It should have been the perfect storm. Florence would win over the Food Network crowd, while Will Ferrell's auto-racing comedy would help bring in NASCAR fans. Obviously, it didn't pan out as planned.

The real test will be in the June quarter. That is when the company will finally be playing against the first of the soft quarters. Don't underestimate the severity of that report. Just a little more than a quarter of the Applebee's are company-owned, and it gets awfully hard to land new franchisees if your concept is fading. Come strong, Applebee's.

The company has opened at least 100 new restaurants for several years now. It would be a shame to see another streak die.

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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 own shares in Cheesecake Factory. 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.