Wendy’s advances the “Project Fresh”a strategic plan designed to revitalize the brand, reignite growth and accelerate profitability, which includes close between 5% and 10% of its US locations.which represents about 300 restaurants out of 6,000.
The closures will start next year and will continue until 2026. These have to do with the settings what the chain does based on consumer behavior and urgent need of “fast food” being, again, affordable and fast.
Closing criteria
Interim CEO and CFO Ken Cook said during Friday’s earnings call that the brand analysis carefully the restaurants. The parameters for closing restaurants focus on the “poor performance in our system, both from a financial and customer experience perspective”according to NBC.
The work is done in conjunction with “franchisees to upgrade them, transfer them to another operator or potentially close them, which will help free up capital for franchisees to reinvest in the system”.
These changes are marked due to inflation and its effects on prices. Customers with tight budgets are choosing to reduce the frequency of consumption or switch to eating at home.
The inflationary context and double pressure
Wendy’s faces a double pressure. On the one hand, the external pressure of inflation that scares customers. On the other hand, internal pressure to improve profitability after registering significant drops in global sales (-2.6%) and comparable (-4.7%) in the third quarter, reveals the results report of the company. The goal is to sacrifice volume (certain locations) to gain long-term profitability.
The chains Fast food companies, including Wendy’s, are forced to cut less productive locations in order to focus on offering undeniable value to customers, who are now much more selective with every dollar they spend on eating out.
According to experts, the future of fast food will be in the most modern, technical establishments and in the most strategic locations.
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