Industry News | December 1, 2004

Baja Fresh to Close Some Stores

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Baja Fresh will close a total of 15 to 18 underperforming stores in the fourth quarter, parent company Wendy's International announced.

"The store closings are decisive initiatives to position Baja Fresh for stronger performance," chairman and chief executive officer Jack Schuessler said. "Baja Fresh has been successful in California and in East Coast markets such as Washington, D.C., and Baltimore, but has had mixed results in other markets and declining overall comparable sales during 2004. We expect these new initiatives to improve the results at Baja Fresh."

Baja Fresh president Bill Moreton said the concept has implemented the first wave of a number of planned initiatives that will occur over the next 18 months.

"Many of the brand's issues are attributable to store-level operations," Moreton said. "We have already realized benefits in our gross margins from key initiatives such as store-level controls for theoretical food and labor costs. We are beginning to leverage the enterprise's resources with a shared-services approach in supply-chain management, information technology, and accounting.

"Another focus has been on our menu, which we are changing to meet consumer trends, simplify operations, and improve service times. Menu improvements beginning on November 9th included several new products, such as chipotle glazed and chile lime chicken salads, as well as four new kids' meals, which come with apple sauce and rice as side dishes, and a choice of juice or soda."

Baja Fresh has also developed and implemented a new, more disciplined site-selection process and slowed its development rate to focus on operations. As previously announced, Baja Fresh plans to open approximately 40 combined company and franchised stores in 2004. This compares to 74 and 61 total stores opened during 2003 and 2002, respectively.

Finally, Baja Fresh has started phase one of a store redesign program, which features softer lighting, a warmer décor, and a revised seating plan that includes family-style seating with booths.