November 1st 2024.
Fast food giant Wendy's has recently revealed its plan to close 140 locations in the US by the end of 2024. However, this doesn't mean that the chain is slowing down - they also have plans to open a similar number of new restaurants in the same time frame. According to CEO Kirk Tanner, the decision to shut down these restaurants was made due to their outdated facilities and underperforming locations.
During an earnings call on Thursday, Tanner stated that the affected restaurants were not meeting the company's expectations and were performing well below the average. To put it into perspective, Wendy's Chief Financial Officer Gunther Plosch shared that the average volume unit for the chain is around $1.1 million. This move is part of Wendy's efforts to maintain their brand's reputation and provide a better experience for their customers.
However, Wendy's is not disclosing the list of the 140 locations that will be closing. This announcement comes after the company had previously revealed the closure of 100 restaurants back in May. But despite these closures, the fast food chain is still expecting to have a similar number of total locations. In fact, they have plans to open 250 to 300 new restaurants this year.
As of late September, Wendy's had around 6,000 locations in the US alone. According to Wendy's spokesperson Heidi Schauer, they are expecting to have a net unit growth of about the same number of closures as openings by 2024. This means that they are anticipating a relatively flat growth in terms of their total number of locations.
Wendy's, which was founded in 1969 in Columbus, Ohio, is famous for its square-shaped hamburger patties. The chain has conducted a thorough review of each individual restaurant to ensure that they are meeting their standards for sales and profitability, as well as delivering the Wendy's brand experience to their customers. According to CEO Kirk Tanner, the overall state of Wendy's system is "incredibly healthy".
It is worth noting that Wendy's is not the only company that has adopted this strategy of closing underperforming locations while opening new ones. Convenience store chain 7-Eleven recently announced the closure of 444 locations in North America, but they also have plans to open 600 others in a fast-casual food store format.
Despite the challenges faced by the fast food industry, Wendy's remains optimistic about their future growth. This is in contrast to their competitor McDonald's, which is currently dealing with an E. coli outbreak linked to their Quarter Pounder burgers. As of Thursday, there have been 90 reported cases of customers falling ill. In comparison, Wendy's executives are confident in the health of their operations.
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