I noticed lately that the location at NW39th near Ann Arbor and the one at NW Expressway and Ann Arbor have recently closed, almost overnight without a notice. Does anyone know if the franchise owner locally is in trouble or the company in general?

I think more likely a franchise issue: Wendy's repurchased 22.4 million shares (about 19 percent of the company) this month for 6 percent over market, suggesting that they've had plenty of cash flow.

I think more likely a franchise issue: Wendy's repurchased 22.4 million shares (about 19 percent of the company) this month for 6 percent over market, suggesting that they've had plenty of cash flow.

Yep. I think you are right. Something similar occurred to the (once) major Burger King franchisee in town.

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well i knew about the old Burger King franchisee problem, but the local market was bought by a new investor and he renovated, rebuilt locations again. that's not related to wendy's as it is a different franchise with a different owner, probably will be the same thing, another will put another restaurant in or buy out the current franchise holder

There is a brand new Wendy's in Shawnee, so it would seem to be a local franchise issue.

There's a Wendy's on NW Expressway just off of Council.

Maybe it's a location issue, because there's also an abandoned Chili's on NW Expy, but off NWEx & Portland they have a newer one.

Don't even get me started on the ripping down of the former Crystal's building to build yet another Chili's.

Drove by the old Wendy's at Ann Arbor and Expressway today. They're turning it into a Church's Chicken and an ugly one at that. Not spending much remodeling dollars thats for sure. I guess on the bright side it's a new restaurant to NW Expressway

Wendy's may have lots of cash flow, but I'm not sure most "fast food" industry analysts are too keen on the company for the long term. They've really had no sense of corporate direction since their founder Dave Thomas passed away several years ago.

Wendy's has had increasing trouble finding market traction, and the inconsistency of their restaurants in terms of appearance and quality has apparently hamstrung them. They've rolled out and retired too many food items too quickly, leaving their menu a bit confused, and the only real staple associated with Wendy's is the Frosty (which is just fine with me, yum).

I recently heard that Wendy's plans to get back into the breakfast market, and that was another move that is being viewed with skepticism.

Obviously, corporate problems differ from local franchise problems, so these issues likely have nothing to do with each other, but from a broader view, Wendy's isn't blazing any competitive trails...

-SoonerDave

SoonerDave, you bring some interesting points. But then you mention local franchise problems and corporate problems with inconsistency in appearance and quality are effecting the long term. Don't you think these go hand in hand?? If certain local franchisee's can't control their quality, cleanliness or appearance that in turn effects the overall corporation. If I'm from out of town and I eat at a Wendy's here and the quality is poor and then I eat at one back home in say Miami, FL and it is much better. That is sending a signal to me that their food is not consistent everywhere. Thus that effects the corporation and the corporation not managing quality control thus effects the local franchisee does it not?

Sounds like maybe my initial thought may have been more right than we thought:


Hamburger chain considers whether to serve up a sale

By Rachel Hoag
Associated Press Writer

DUBLIN, Ohio — In the last year, Wendy's International Inc. has spun off its Tim Hortons coffee-and-doughnut chain, dumped its money-losing Baja Fresh Mexican Grill and laid off employees at its corporate office.
The company may now seek a boost to its stock price with another tactic — selling off what's left of the nation's third-largest hamburger chain.

"We've had a lot of initiatives, and we've executed them well over the last two years,” Chief Executive Kerrii Anderson said. "That's created a tremendous amount of value over the last 12 months, and we have a responsibility to continue to create value.”

The company announced Wednesday that a special board committee had been formed to study options for the company, including a possible sale.

The developments mark a whirlwind year for Anderson, who took over as chief executive after longtime Chief Executive Jack Schuessler abruptly retired last year. She completed a flurry of transactions, including Tim Hortons' initial public offering and eventual spinoff, and quickly rededicated the chain to promoting the core business of signature square hamburgers and the Frosty, a dessert in a cup.

"We believe the company has done a good job of delivering value to the shareholders, and the formation of this special committee is just another step in our continuing efforts to further enhance value for our shareholders,” board chairman James V. Pickett told investors Thursday at the company's annual meeting, held at the corporate headquarters in this Columbus suburb.

Thursday, one day after the announcement, Wendy's shares shot up more than 16 percent, or $5.31, to close at $37.99 on the New York Stock Exchange, its highest level since the spinoff of Tim Hortons last fall when the stock reached a record $67.19. Shareholders, during what may have been the company's last annual meeting, were confident the board would make the right decision.

"I think it could be a good thing to sell,” shareholder Ray Vawter said.

The committee has no timeline to reach a decision, Anderson said.

The sale would be a disappointment for the restaurant's namesake and daughter of founder Dave Thomas, Wendy Thomas, who attended the shareholder's meeting along with her mother and siblings.

"I hope it doesn't happen, but everything is going to work out the way it's meant to be,” said Wendy Thomas, who, along with her four siblings, owns 32 restaurants.

Another daughter, Molly Thomas, said, "I have an emotional tie, so yeah, if they sold the company, I'd be very upset.”

Those ties are understood, and Anderson vowed to the board would continue to safeguard Dave Thomas' legacy.

"As emotionally involved as we (the board) think we are in this organization, they grew up with Wendy's. It's their baby. Will we consider them? We have to,” she said. "But in the end, the board has a responsibility to consider what's best for the shareholders.”


Wendy's timeline
A look at some of the moves Wendy's International Inc. has made in the past year:
•March 2006: Wendy's says it is exploring alternatives for its struggling Baja Fresh Mexican Grill chain; announces board of directors will expand to 15 to make room for three people nominated by investment firm Trian Fund Management, a major shareholder.

•April 2006: Chairman and Chief Executive Jack Schuessler retires after more than 30 years with the company, including six as chief executive. Chief Financial Officer Kerrii Anderson is tapped to serve as interim chief executive. Wendy's introduces Frescata deli-style sandwiches.

•July: Wendy's announces plans to cut 355 corporate positions.

•September: Wendy's completes spinoff of Canadian coffee-and-doughnut chain Tim Hortons.

•October: Wendy's agrees to sell Baja Fresh for $31 million to a consortium of investment groups.

•November: Anderson becomes permanent chief executive; Wendy's finishes $801.3 million stock buyback.

•April: Wendy's tells shareholders it has formed a board committee to explore strategic options for the company, including a possible sale.

Source: The Associated Press

Wendy's is adrift in the fast food world. Here in St. Louis every single Wendy's (all under the same franchisee) shut down overnight late last summer. The franchisee was forced into an involuntary Chapter 11 (reorganization) bankruptcy. That proceeding was eventually converted into a Chapter 7 (liquidation) bankruptcy essentially meaning that the operation was so far gone it was not going to be worthwhile to the creditors to reorganize the company and attempt to make money - a sale of the assets would bring more to the table. Quite simply, nobody was willing to come in and attempt to resuscitate the brand given the oppotunity to do it at a bargain price and have a monopoly over the brand in a substantial metro area (there were also some stores in Peoria and Springfield, IL - both outside the St. Louis MSA - to be had as part of the franchisee's territory). To me that says that Wendy's is in trouble as a national brand if there was no belief that the chain was worth reviving in this area.

In my opinion, Wendy's has been a trainwreck for nigh about 25 years. I can recall when all they offered were burgers, fries, chili and frosties. Then they got into the baked potato market - fine, not too much of a stretch. Then came prepared salads - okay, nice healthy alternative. Then they went to the salad bar - hmm, salad bars and fast food burgers all under one roof? Then the salad bar expanded to hot food offerings as well, like pasta and "Mexican" food - totally overboard. They essentially became to burger joints what Ponderosa/Bonanza became to discount steak houses - a cut rate grazing destination. This was a chain that branched out on the premise that they were a more "mature" burger destination than McDonalds but wound up trying way too hard and excelling at nothing. Meanwhile the fast casual concept came in and supplanted them as the more "adult" fast food destination.

Can Wendy's be saved? I suppose with the right leadership they can attempt to reposition themselves somehow. Jack in the Box did it. There's a chain that was adrift in the desert for close to 15 years before they finally found a niche ("upscale" burger and sandwich offerings, relying heavily on takeout and drive-through) and reclaimed some success. Now they're attempting to establish another niche - 24 hour breakfast - and that concerns me as I feel they're starting to repeat Wendy's mistake of trying to put too many irons in the fire.

It's not fast food, but IHOP is another historied chain that went from almost not existing to being EVERYWHERE.

It's not fast food, but IHOP is another historied chain that went from almost not existing to being EVERYWHERE.

Yes!!! Excellent example. I can't speak for other markets, but it's amazing to me to see all of those abandoned or re-purposed A-frames around town and usually nowhere near where the present-day IHoP's are.

A friend of ours at church is the son of the man who built all those little A-Frame IHOPs.

A friend of ours at church is the son of the man who built all those little A-Frame IHOPs.

You know, I just had an ironic recollection to my college days. Care to guess what went up in the spot where the Columbia, Missouri IHoP once stood?

Yup - a Wendy's. I think it's a used bookstore now.

funny

Dave Thomas was, obvoiusly, the heart and soul of Wendy's, and I think the term "adrift" describes them very aptly. They really just don't know what to do with themselves. That said, I don't think their problems purely started with the loss of Thomas. I think that fundamental entreprenurial spirit and get-it-done attitude was still there, but there were "direction" problems for some time, I think.

I also think the time frame "adrift for 25 years" is also spot-on. I think one of the biggest mistakes big franchise chains make is to feature some new mainstream goodie for a month, then take it off the menu. Wendy's did that like crazy back in the 80's; part of it is test-marketing, to be sure, and part of it might be seasonal, but when it becomes part of your basic modus operandi, you've got a problem.

I don't know if anyone else here remembers, but Wendy's served an awesome chili dog for about a month or so back in the early-mid 80's. Really popular from what I could tell; then, poof; one day, they were gone. They also had a very good breakfast back then, but again, one day, poof, gone. When your menu vacillates like that, you alienate customers, and rather than get angry, they just go somewhere else.

A chain that seems to be doing the same thing right now is Arby's. They'll put out a really good "specialty" sandwich, like their flatbread offerings (which were really good) then pull it off the menu in a month. As a customer, that hacks me royally. Arby's has a good line on differentiation in the fast-food market by virtue of its roast beef sandwiches, but screwing around with the menu is something that turns me as a customer off really fast.

Wendy's desperately needs some sort of new, visionary leadership to chart a firm course for the company. I fear right now no one in the company, or among the family that started it, has such a vision, and in light of the prospect of selling out, have just about given up trying. While I've never been a big Wendy's fan, that to me is kinda sad.

-soonerdave