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Two, struggling fast-food burger chains made personnel changes involving presidents, with one president out, and another in. And both illustrate the problems companies have when they change management too much.
Early in the week, Wendy’s announced that its U.S. president, Pete Suerken, stepped down to go back to his old job. The company is replacing him with a chief operating officer, but it’s clear that Suerken came in to bring stability to a brutal domestic market. He’s done that.
The fast-food chain has struggled in recent years with major, annual changes in management dating back to early 2023. The company is now on its fourth CEO since then. And it has twice eliminated its U.S. president position. All that change is playing a clear role in Wendy’s struggles right now, because it’s hard to develop marketing and operations plans when you know who will be steering the ship in a few months.
What Wendy’s really needs is the same management team for several years.
Jack in the Box, meanwhile, may be demonstrating a path to reduce friction from such changes.
Like Wendy’s, the San Diego-based chain has had a revolving CEO door in recent years. When we talked with Mark King recently, he acknowledged the stress caused by such change and vowed to stick around a while. We didn’t know the plan involved Taylor Montgomery.
The chief brand officer with Taco Bell is going to step in as Jack in the Box’s president and will work alongside King over the next 12 months before, presumably, he is named CEO. That is still change, but it ensures that the future CEO and the current acting CEO are both on the same page regarding strategy and other issues.
Boards at struggling companies routinely face pressure to inject their businesses with energy or find a strategy that works, which often leads to a change at the top. But then they get impatient for change, or hire the wrong person, and that can make things worse. And then it gets tougher to bring people in because the perception of the job declines.
Finding the right leader is crucial. Giving them time to execute their plan is just as important.
This week’s financial news
Restaurant chains have been pushing for more digital sales in recent years. But they should not do so at the expense of hospitality.
McDonald’s “bad trade” on value last quarter cost the company a lot of money in lost sales from low-income consumers. Indeed, customers are quick to punish chains that raise prices on value offers.
We enjoyed writing this story about Kate Meier, a mother of three chefs who is now making aprons and working to make life easier for restaurant workers.
Lots of beverage news: Starbucks is laying off more workers. 7 Brew is hitting Walmarts. Taco Bell is doing energy. And shoutout to Sonic for skipping the pumpkin spice. Not everybody needs to sell the same stuff.
Hey, remember Boston Market’s first India location? Yeah about that …
Wendy’s decline may put the chain into the hands of Nelson Peltz.
Franchising is great, until it’s not.
High gas prices are good for neither restaurant nor diner.
Number of the week
This graphic shows Wendy’s and McDonald’s customers by income bracket. Both companies have lost a lot of low-income consumers, which has made life more challenging for both chains.
Quote of the week
“You need to be able to throw a line and help them stay on their feet. I feel like it’s so critically important just to make sure that people can live with dignity as they face some of these challenges.” -Kate Meier, founder of the Help the House Foundation.
On the blog
I wrote about value, low-income diners, Wendy’s, and franchising. Check out all my blog posts on The Bottom Line.
On the podcasts
On A Deeper Dive I spoke with Michael Haith about Teriyaki Madness and Franchising. On The Week in Restaurants we talked about Wendy’s, bagels, and more Endless Shrimp.
For questions, comments or story ideas, send me an email at jonathan.maze@informa.com. And follow me on Twitter at @jonathanmaze. And also LinkedIn. And TikTok.