Thomas was also mindful of the growth potential for his 30-year-old brand, compared to his competitors. “I want to build restaurants in almost every area where we have an opportunity to do so,” he said, noting that Wendy’s, with 5,500 restaurants, was underpenetrated, especially compared to McDonald’s 12,000–plus domestic locations. He talked about focusing on U.S. markets and his goal of adding just more than 500 restaurants during the coming year. As it turned out, Wendy’s would add about 250 units systemwide that year, and a little more than 200 the following year. Today, at about 6,600 total units, underpenetration remains both a challenge and an opportunity for the company.
By the time of that second interview, two of this magazine’s most important industry reports, The QSR 50 and The Drive-Thru Study, had gained traction. The Wendy’s name consistently appeared near the tops of both. “The bottom line,” said Thomas, “is taking care of the customer.” But, he added, that went two ways, comprising not only customer service but also training and rewarding employees. “We didn’t realize [when Wendy’s started] you’ve actually got to tell a young person who’s new to the job how to do even the small things, like clean the tables or mop a floor,” he said.
He talked, too, about the importance of store-level productivity and how good training, performance initiatives, and rewards led to bottom-line success. “We put a clock in our [drive-thru] window to measure the time between when the food was ordered and delivered,” he said. “Instead of making that a negative, we made it a positive, … rewarded people when they got the job done faster and more accurately.” Indeed, Wendy’s Service Excellence initiative propelled the company to the top of The Drive-Thru Study, where it would make an impressive three-year run.
But years have passed, and lately that performance has not been so consistent. Same-store sales have been down, and commodity costs have risen. Wendy’s has been later to the table with strategies that work for today’s markets, in areas like pricing, advertising, and promotions. And as this issue goes to press, Triarc Cos., parent to Arby’s, is offering $37 to $41 a share to buy the company.
As the ownership question plays out, the company is moving ahead with operations initiatives, expanding its new breakfast program to 75 more restaurants after a test in 160 sites and five markets. If the program stays on track, breakfast will be on the menu in more than 30 percent of Wendy’s North American restaurants by the end of this year, which will allow the company to compete with peers like McDonald’s, Burger King, and Chick-fil-A for the consumer dollars that are flowing into that fast-growing early morning daypart.
What struck me most about that first interview with Thomas 10 years ago was his completely unpretentious personality. Of course, I had not known him before he was successful, but it seemed safe to assume that success had not changed him. This multi-millionaire chief executive pronounced “specifically” as “pacifically,” and “spaghetti” as “p-sgetti,”—and it did not matter. And was it my imagination, or did he sound just a tiny bit nervous, too?