Key background
Wendy’s has been losing ground for more than a decade to rivals that invested heavily in its food offerings. Burger King clawed its way back to the No. 2 U.S. burger-chain spot by overhauling its Whopper and renovating locations through a $700 million turnaround plan that utilized a product-first playbook Wendy’s moved away from in favor of deals and cost discipline. Wright’s new strategy includes re-making the brand’s leadership team, and he said a former McDonald’s executive has been hired in the newly created role of chief marketing and customer growth officer.
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TANGENT
The turnaround effort runs alongside a separate pressure point: Peltz. Trian Fund Management, a long-standing Wendy’s shareholder with board seats, has been in talks with potential investors about strategic options, including a possible take-private of the company. Peltz first told the Securities and Exchange Commission in February he was evaluating ways to enhance shareholder value, including a plan to have Trian take “control of the company,” and said he thinks its stock, which has fallen significantly over the last year, is undervalued. The potential coalition would be led by Trian, which already owns a 16% stake, and is expected to include Flynn Group, one of Wendy’s largest franchisees, and Abu Dhabi-based BlueFive Capital, according to the Financial Times.
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SURPRISING FACT
It was only a few weeks ago that Wendy’s officially fell to Burger King in the ranking of chains in the U.S. by systemwide sales. Wendy’s held the spot for six years but after reporting a 7% slip in domestic same-store sales a few weeks ago, it fell to No. 3. Burger King reported U.S. same-store sales growth of 8.5% in the second quarter.
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