Breakfast at Wendy’s: Fifth Try – #73
The management lesson from Wendy’s actions covered in this BLOG are focused on keeping your product line vibrant and that you create excitement amongst your franchise employees, staff and most importantly the Customer. A bacon breakfast sandwich and a chicken biscuit with a Coffee-flavored-Smoothie just won’t do it, when these items join the 300 Wendy’s Restaurants already serving breakfasts making up the general menu. These Franchise Restaurants are the survivors after Wendy’s dealing with breakfasts was launched at all 5813 nationwide locations in 2012 and abandoning 5513 of these one year later. This was not the first time a breakfast menu was tried by Wendy’s.
The reason for abandonment was given as too electric a mix of healthy and too indulgent options, plus ample competition from Starbuck’s and McDonald’s were seen as problems at the time, analysts said. A Wendy’s spokesperson indicated that the company is confidant in this launch in January. We hope that this launch is successful, but have to ask the tough question, what has changed in the last seven years to make breakfast more attractive to launch now?
It isn’t generating excitement for me to switch from my daily serving of an Egg-McMuffin with hash-brown and a black coffee at McDonald’s. The Wendy’s announcement just doesn’t create any excitement. Even the change in hours is just a very routine statement.
This is the fourth or fifth time Wendy’s has tried to market breakfast as an option for existing and new Customers. Why would Wendy’s want to spend $20 million of franchisee’s money to add more menu items, possibly added equipment and stay open longer hours at its 5813 domestic restaurants? Franchisees are looking at Wendy’s forecasting a swing of one time Per Share Earnings from a positive growth of 3.5% – 7.0% in 2019 to being reduced 3.0% – 6.5% in 2020. In requiring franchisees to add 20,000 employees to effectively launch this program, they will be facing an increase in minimum wages.
In addition, I feel that McDonald’s won’t be sitting back without at least a great promotion, which really adds to the transparency of the impact of this change. As an observer, I can only recommend establishing the Trust within the franchisees that they need. By preparing the short and longer impact for each franchisee and selling the breakfast program not only to establish transparency and trust, but to finally level with its Customer base. The market has changed in the breakfast segment, and to this extent, I sincerely hope that a clear plan exists to allow sharing the win-win info. It has to be shared, but Wendy’s can keep a confidential lockdown on sharing the info due to the competitive situation in the marketplace.