Wendy's Evaluates Its Restaurants to Boost Sales
The fast-food burger chain Wendy's is seriously assessing its weakest restaurants as it aims to reverse a sudden decline in sales. This evaluation may lead to the closure of hundreds of locations as the company prioritizes service improvements and increasing unit volumes.
Collaboration with Franchisees
On Friday, Wendy's executives, based in Dublin, Ohio, announced they are working closely with franchisees to create strategies for their underperforming restaurants. These strategies include:
- Investing in assets, service, and operational improvements
- Selling stores to other franchisees
- Potentially closing some locations, starting this year
Potential Closures
Ken Cook, Wendy’s interim CEO, told analysts that a "mid-single-digit percentage" of U.S. restaurants might close after this review process. With just under 6,000 Wendy’s restaurants nationwide, this would mean fewer than 300 locations might be shut down.
“When we look at the system today, we have some restaurants that do not elevate the brand and are a drag from a franchisee financial performance perspective,” Cook said. “The goal is to address and fix those restaurants. So in some cases that’s going to mean deploying operational improvements, deploying additional technology or equipment."
Focus on Brand and Performance
Wendy’s aims to improve overall brand value and franchisee financial performance by addressing the challenges in weaker restaurants through operational changes and new technology.
Summary: Wendy’s plan to close underperforming locations and enhance service signals a strategic effort to recover sales and strengthen its brand across nearly 6,000 restaurants.