Wendy’s announced today that it would realign field and home-office operations to channel more resources into developing stores and technology. The restructuring will save the franchisor as much as $25 million near term, executives said.
An additional $5 million cut in general and administrative costs will come from the sale of Canadian stores, they added.
They indicated that the savings would be redeployed in part into adding restaurants and developing technology that connects the chain to consumers.
The move also appeared to be a hedge against escalating costs. CEO Emil Brolick noted that expenses will be jacked up next year by the Affordable Care Act and a continued rise in beef prices, which are already at a record high for the brand.
The savings program was disclosed along with the franchisor’s third-quarter financial results. Same-store sales for the quarter increased year-over-year by 2 percent, “slightly less than our expectations,” Brolick said.
He attributed the decline to a decrease in the drawing power of the chain’s bargain items. Premium products like the BBQ Pulled Port Sandwich delivered sales in line with expectations, Brolick said.