Written Case Analysis
Part I: Current Situation
Wendy's (Formerly branded as Wendy's Old Fashioned Hamburgers) is an international fast food chain restaurant founded by Dave Thomas on November 15, 1969, in Columbus, Ohio, United States. Wendy’s known as the Wendy’s/Arby’s Group is the third quick service restaurant company. The merger of the two companies in 2011 comprised of the two brands Wendy’s and Arby’s. Wendy’s/Arby’s Group generated about $12 billion in system wide sales and comprise over 10,000 restaurants. The industry as whole is dominated by what is termed the “big four” which comprises McDonalds, Burger King, Wendy’s/Arby’s Group, and Yum Brands. Wendy's/Arby's Group completed the sale of Arby's Restaurant Group in July of 2011to Atlanta-based private equity firm Roark Capital Group, and dropped the roast beef sandwich chain from its name. The company will do business as The Wendy's Company effective Tuesday and continue to trade under the ticker "WEN" on the New York Stock Exchange. Olsen, S. (2011, 07/5). Wend'ys restaurants sells arb'ys chain, changes name. Retrieved from http://usatoday30.usatoday.com/money/industries/food/2011 Currently, McDonalds has gained the most attention among businesses within the quick service industry, which is shown through their strong advantage in market penetration as well as total revenue, while the Wendy’s has been generally recognized as the leader in quality and customer service. Wendy’s started out as a single store in downtown Columbus, Ohio and from inception was born placing utmost importance on providing quality. Dave Thomas believed quality was the foundation he put the phrase “quality is in our recipe” in the logo. There are approximately 6,600 Wendy’s restaurants in operation in the United States and in 21 other countries and territories. Wendy’s has seen slow but steady growth but financially and internationally, since their start in 1969 by reaching the milestones of going public in September of 1976, going global in 1988, and reaching 5000 stores by march of 1997. As of March 2012, Wendy's was the world's third largest hamburger fast food chain with approximately six thousand six hundred and fifty locations, following McDonald's thirty one thousand plus locations and Burger King's twenty two thousand plus locations. Approximately seventy seven percent of Wendy's restaurants are franchised, the majority of which are located in North America. Wendy's and its affiliates employ more than forty six thousand people in its global operations. Wendy's menu consists of hamburgers, chicken sandwiches, French fries, fish, salads, stuffed baked potatoes, side dishes, and beverages, including the Frosty, a form of soft serve ice cream mixed with frozen starches. The company does not have a signature sandwich, such as the Big Mac or the Whopper. Instead, the square burger patties are their signature items. The square burger patties are fresh ground beef rather than frozen burger patties. Wendy's offers two different hamburger patties, a "Junior" 2.25 ounce (63.8 gram) patty and its "Single" 4 ounce (113.4 gram) patty. 4 ounce patties are sold in single, double, and triple sizes whereas the junior patties sell in single and double patties. The previous size of two ounces per junior patty was altered to 1.78 ounce size in 2007 to save on expenses from rising food costs. They then raised the patty size up to 2.25 ounces when Wendy's Hot and Juicy hamburgers were introduced. In August 2011, the Junior Double Stack was discontinued and the new Cheesy Cheddarburger was introduced. Originally, Wendy's had only two kinds of chicken sandwiches, fried and grilled. The spicy chicken sandwich started out as a promotional sandwich. It was later put on the menu full-time in 1996 due to its popularity and the fact that compared to most promotional sandwiches, it was much simpler to make. The same condiments as the standard breaded chicken sandwich were used for the sandwich. In...
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