Wendy’s is set to close hundreds of locations across the United States, just a year after a significant reduction of 140 stores. Interim CEO Ken Cook shared this news during a quarterly earnings call on November 7, informing investors that the fast-food chain would be shutting down a “mid single-digit percentage” of its restaurants. With approximately 6,000 locations still operating, this closure could translate to between 240 and 360 outlets, with an investor estimating around 300 closures.
Cook explained that the decision to close certain locations is driven by their performance, stating, “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.” The strategy aims to address underperforming locations, which may involve improvements to technology or equipment or transitioning struggling restaurants to new operators. In some cases, it will lead to complete closures.
The anticipated closures are set to begin in the fourth quarter of this year, although Wendy’s has yet to release a specific list of the locations affected. This announcement comes in light of Wendy’s recent sales struggles, with a reported 4.7% decrease in same-store sales and a 2.6% downturn in global systemwide sales for the third quarter.
In an effort to strengthen the brand, Wendy’s is making these difficult decisions to enhance overall financial performance. The company aims to transform its operations and focus on profitability, which could provide a pathway for rejuvenation in the fast-food market. While the closures may raise concerns, they could also lead to a more robust and streamlined Wendy’s brand in the future.