When Mr. Krabs retired, Howard Blandy took over the restaurant. After Mr. Krabs saw how much he had changed the restaurant, Squidward being forced to be friendly (or get beaten by Carl's thug in Human Resources), synthetic patties made by machines instead of being made by hand and (much to his horror) an automated cash register. In a fit of rage, he destroys the computerized cash register and the restaurant equipment, and Carl called Howard Blandy. They made a truce and the customers got scared off by the fact that the patties were made by a substance made out of a gray sludge that was painted and shaped to look like Krabby Patties.
The franchise converted the old-fashioned Krusty Krab into a modern-looking factory. Automatic registers were used to handle money and were un-manned. There was a large TV with a sports channel. In the kitchen laid a conveyor belt used to disguise gray, sloppy material as food. In the same room, the sink was used to clean the dishes. Another room was built as an office for Human Resources.
The establishment seemed to express a "sincere" atmosphere to its customers but was revealed to be a very strict business. Employees would be forced to act friendly, or they would face Human Resources, which is a tough enforcer.
"Sincere Service with a Smile!"
The gray tar-like substance in the patties may be similar to Pink Slime, a real-life form of fake meat.
It is unknown what was in the gray patties, but it could possibly be mechanically separated meat.
Like the Kelpshake company, this restaurant and KelpShake stores are modern-based establishments. Both have an antagonistic behavior as they have strict policies and threatening security.
It may be a parody of Applebees, as it has similar decorations to Applebees.
Where Carl speaks with Squidward, he mentions human resources. This is a reference to real life human resources, though nearly every character in the series is a sea creature.