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Wendy’s Sees Best Growth Since 2005

Some of Wendy’s initiatives seem to actually be working. They have modernized their design and led a good marketing campaign around the pretzel bacon burger. I’d be feeling better if I was a franchisee.

  • Wendy’s (WEN) says company-owned same-store sales increased 3.2% in North America during Q3 and franchise-owned stores improved 3.1%.
  • The two-year stack for same-store sales was 5.9% to mark the best growth since 2005.
  • The restaurant operator improved its margins with a favorable sales mix and lower paper and beverage costs factoring in. (PR)
  • Company-operated North America restaurant margin was 15.6 percent, compared to 13.9 percent last year. The margin improvement was due to a favorable sales mix, with lower paper and beverage costs, partly offset by a 100 basis-point increase in commodity costs.

From a press release:

CEO says “Our Image Activation program, which started in 2011, has accelerated over the past two years, producing increased traffic and higher sales,” Brolick said. “We have developed a standard ultra-modern design with optional upgrades that provide investment flexibility to meet the needs of our diverse system. We are confident our solutions will work for 85 to 90 percent of our franchisees.”

The Company is offering an incentive program to qualified franchisees commencing Image Activation restaurant reimages during 2013. About 100 of these restaurants are currently in various stages of active process, and the Company believes most of them will be open or under construction by the end of 2013.

In addition to the expected 2013 increase in Image Activation new builds and reimages, the Company continues to expect further acceleration in Image Activation reimages for both Company-operated and franchise restaurants during 2014.

About Ryan Knoll

Attorney and advisor with an interest in franchising. Feel free to email me comments and questions on the "Contact Us" page.
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