I’m not sure what to make of this. How can it be cost effective to sell their bakery? That means paying someone else to make their buns. You’d think 6500 restaurants would keep one bakery busy. Dumping 640 restaurants out of 6,515. That’s 9.8%.
Are they cannibalizing themselves to stay afloat? Are they in need of short term cash to cover operating cost? Most important, will I soon lose my favorite burger?
Wendys has always been a much better alternative to Mickey D’s and Booger King. Wendys and Sonic are my go to places.
Maybe other with business backgrounds better understand the situation.
They’re selling company owned restaurants to franchisees. That shifts the costs to those franchisees while Wendy’s still reaps profits from them. They must see that central management isn’t working well for them. They simply closed up a bunch of stores several years ago because they weren’t performing. Wendy’s hasn’t been trying to get a store at every major intersection the way some chains do, they concentrate on profitable stores in high population density areas. I doubt they’re going away altogether soon but you might end up traveling further to find one.
ETA: And they’ve probably found a third-party baker will cost them less than maintaining their own.
I always admired Dave Thomas’s abilities. He owned quite a few successful KFC franchises. Sold them all and then started Wendys. This was at a time that McDonalds and Burger King already had a firm grip on the market. Dave built Wendys up quickly. Seemed like it happened within ten years they were in every city and town.
I’d hate to think they are floundering. I know lately they seem to be imitating McDonalds. Trying to taste like them. That’s a mistake. Wendys always had their own unique taste.
Several Wendys near me don’t serve breakfast. They gave up the fight. They don’t open until just before 11.
The cynic in me wonders if this is related to the labor situation and the minimum wage pushes. I wonder if the areas where they are being sold are be ones where a franchise owned small employer might have different(potentially more profitable) rules than a massive corporation with tens of thousands of employees.
My guess wrt the bakery is that they’ll continue to use it, just buying the bread from the new owners instead of operating it themselves. Could end up saving money, especially if the new owners bring other clients on board and invest in economies of scale, something that would be hard to do in-house.
OTOH it could backfire hard. I’ve seen it happen with similar outsourcing projects.
I recall on Undercover Boss White Castle owner, Dave Rife, a great-grandson of the founder of White Castle worked a shift at their bakery. The bun line will never be the same LOL
I guess its pretty common for these burger chains to have a bakery. Run it themselves or have an exclusive contract with one.
As far as the closing of the bakery, it makes complete sense. You really should only produce products yourself in which 1) you have some core competency or proprietary advantage, and/or 2) there aren’t enough suppliers to compete for your services, and/or 3) You have a unique need and cannot rely on a 3rd party.
This move takes out the fixed costs of running a bakery. There are plenty of other suppliers who could easily produce the buns that Wendy’s needs.
I was think more that they are going to use one of the giant conglomerates that has individual plants nationwide. They can probably produce and deliver for less than Wendy’s can. It’s all automated equipment so they can easily handle small runs of the type needed for Wendy’s in a locality.
Ruken’s point is important, they don’t have to use just one bakery, or keep using the same bakery year after year, they can choose the bakery that gives them the best value for their product.
A while back I moved and noticed that 3/4th of the Wendy’s in my area were closed. It’d be a shame if such a good fast food restaurant was in such dire straits.
Wendy’s didn’t do breakfast at all (save for a few locations at airports and the like) before 2007 (though they tested breakfast, unsuccessfully, back in 1985).
Even though they technically now offer breakfast “nationally”, and had planned to have it in all stores by 2009, even now, 8 years after launching that breakfast menu, there are apparently still quite a few franchisees who don’t offer it. Clearly, it’s been a struggle for them as a company to figure out.
I really find it hard to believe that Wendy’s is making all its buns in one single bakery in Zanesville Ohio. If so, the transportation costs must be killing them. They’d have to air freight them all over the country daily.
I don’t know, but I suspect that that one bakery is only supplying restaurants within a hundred miles or so of Zanesville Ohio. I bet that restaurants in California, for example, are already getting their buns from a different source, whether it is a different company-owned bakery or an unaffiliated contractor.
The specialty Burger places are hurting all the burger franchises. We have a place locally called David’s. They grind their meat fresh every morning for their 4 locations. Potatoes are peeled and sliced fresh daily for their fries. They use the freshest tomatoes and lettuce. They even lightly season their meat with some salt and pepper!
I don’t mind paying $4 extra for a great tasting premium burger. I don’t eat burgers daily anymore. I want a good burger on the days I treat myself. Why settle for a reheated McDonalds or Wendy’s burger? Thats been sitting around for thirty minutes?
Word. The big chain burgers are pretty much universally as far from a home-made burger as anything can be that’s made from roughly the same ingredients. IIRC, Wendy’s changed their burger and fry recipes a couple of years ago and although I still go there occasionally, I liked the previous versions better. Maybe others feel the same way.
Also, not to hijack, but I’ve been musing on what seems to be a general decline in the big chains and I wonder how much has to do, like so many things, with aging infrastructure. Fast-food restaurants seem to get very hard use: between all the customers tramping though and all the revoltingly smelly grease that inevitably builds up, they’re pretty much only worthy of being demolished after 15-20 years or so. Having to either tear down and rebuild, or sell up and move to a new building, may be too much for some franchisees unless they’ve planned and saved for that eventuality. I could be wrong on that.
Wendys and Sonic are my go to places.