Wendy’s franchisee confidence is as high as it’s ever been, that’s according to CEO Todd Penegor.
Operators ended 2020 with strong balance sheets and profitability. Wendy’s franchisees have seen that level of profitability continue in 2021, which has allowed the company to invest in technology, reimaging, and unit development.
The burger chain also rolled out a new incentive program earlier this year that rewards franchisees for new restaurant growth, accelerated timing, and multi-year commitments. Meanwhile, its franchise recruitment pipeline has grown significantly.
Wendy’s has roughly 150 new potential franchisees at different stages of the process. This includes more than 20 that are looking into the U.K., a market that Wendy’s will enter for the first time this year. The burger brand also recently signed new development agreements with franchisees to open more than 50 stores in Central Asia by 2030 and to double its footprint in Quebec, Canada.
Wendy's recent push for innovation dates back a few years ago when it launched the Smart 2.0 prototype and created a new global standard. The conversation centred around enhancing the restaurant experience, freshening the look, and connecting digital into the physical space. That meant the integration of the mobile order app, curbside, kiosks, and pickup shelves. As the chain moves forward with unit development, it will do so knowing that COVID has accelerated consumer’s demand for convenience and digital avenues.
Two-thirds of the Wendy’s footprint has been remodelled. Restaurants that have undergone the image activation have seen a 30 basis point improvement or a mid-to-high single-digit lift in same-store sales. The program is expected to finish by 2024.
Chief Development Officer Abigail Pringle explained that in the past, Wendy’s and other quick-service brands felt they were restrained to a traditional four-wall drive-thru. But this is no longer the case as many concepts have turned to non-traditional locations—military bases, universities, hospitals, and even zoos—to unlock growth. As Wendy’s approaches 8,000 restaurants, 30 percent of the units will be non-traditional.
Wendy’s has also opened several ghost kitchens around the world, which allows it to penetrate bigger markets and fill gaps between its traditional outlets.
The strategy is about looking at the trade area and exploring the best way to serve the customer. In some cases, this means a drive-thru only store is the best fit—a design Wendy’s has worked on long before COVID. Pringle said drive-thru only units are in the pipeline and under construction. Some have already opened, like in the Philippines this year. One is coming to the U.K., as well.
“How do we bring [our food] in a convenient way with different access points so we can take out the thinking for our customer and really bring traditional and non-traditional ways, but more importantly, let’s do it at a great and affordable price so that we can really enhance people’s lives,” Pringle said.
“I’m excited about how development and design can really play a role in expanding the brand, and I can’t see any reason why we can’t achieve and even exceed our goals for the long-term."