Wendy’s names new COO, closes field offices

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Wendy's

Operations overhaul: In September the company made major changes to its operations division that included “transitioning from separate leaders of company and franchise operations to a single leader of all U.S. restaurant operations,” the company said in a regulatory filing.

Deepak Ajmani, previously the company’s senior vice president of company restaurant operations, is now the U.S. Chief Operations Officer. He will oversee both company and franchise operations and report to Kurt Kane, president, U.S. and chief commercial officer.

“The person who previously led franchise operations is no longer with the Company,” the chain told NRN when asked about the eliminated position.

The realignment also includes the planned closure of some field offices as “we have found that people can be just as effective working remotely,” CEO Todd Penegor told investors.

“There are a handful that are closing in North America, and employees who were based out of those offices will continue to work remotely,” the company told NRN when asked about the number of field office closures.

The restructuring plan, which includes severance costs, is expected to cost $7 million to $9 million. The company declined to share layoff details with NRN.

Placer.ai

Traffic improving: The company said its new breakfast menu, which launched in early March, is driving frequent visitors to restaurants after getting off to a slow start. Higher check averages are also being driven by family meals ordered at dinner and digital orders.

The company did not disclose traffic numbers. According to data firm Placer.ai, foot traffic at Wendy’s was down 29.2% and 27.7% year-over-year in August and September, respectively. In October, visits were down 24.4% compared to last year, same month. During the peak of the pandemic, when the country was in lockdown in April, visits were down 57.2% in April.

“Should this pace continue, Wendy’s could be positioned to return to growth by early 2021,” said Placer.ai, which tracks and analyzes retail and restaurant foot traffic.

Nancy Luna

New growth: To take advantage of current real-estate opportunities, the company has deployed a conversion task force to look at various markets. Penegor said it is “important to have a portfolio” of different restaurant designs that can easily fit into a variety of trade areas, which is why the company is looking at a drive-thru-only design. No more details were provided.

Wendy's

Franchisee strength: The company said breakfast is providing a sales and profit layer lift that restaurants didn’t have previously. As such, franchisees are on firm financial footing now and have paid back fees that were deferred in the second quarter as part of the company’s COVID-19 relief package.

Getting all those deferrals repaid is a “real testament” to the brand’s ability to bounce back during the ongoing health crisis.

“If you look at the health of the franchise system, by and large, it's very strong,” Penegor said.

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