Wendy’s just reported arguably the worst quarter in its history, or at least this century, and it wasn’t terribly surprising.
The fast-food chain’s same-store sales fell 11.3%. The company itself said it was within its expectations and largely blamed the problem on a combination of factors, notably marketing that was “front-weighted” toward the early part of 2025.
The company reminded analysts that it was closing about 5% to 6% of its restaurants, or about 300 to 350. But it also said this: It is working with franchisees “to better align operating hours to demand, particularly for the morning daypart.”
“While many restaurants perform well at breakfast, we recognize it may not work in every market, as certain markets have customer dynamics that do not support a thriving breakfast business,” Interim CEO Ken Cook told analysts. In short, some franchisees will ditch the morning.
That makes sense. Wendy’s was built and expanded into much of its current size without breakfast. Operators who built the locations necessarily worried about ease of access to their new restaurants while commuters are on their way to work, which is an underappreciated explanation for the success of McDonald's breakfast. And if operator profits are taking a beating then franchisors need to find ways to improve them—especially after a quarter like that one.
“The large majority of the system is going to stay in breakfast,” Cook said. “We’re not pulling out.” He called it “a common-sense decision.”
Still, giving franchisees flexibility to get rid of the daypart is a slippery slope. If enough operators decide not to do it, then the company can’t market the daypart as effectively. And consumers question whether a typical location serves breakfast, then they will be less likely to go. Such flexibility might be good for franchisees struggling to make a profit, but it can be damaging to a brand’s long-term plans.
This is a reminder of just how difficult the morning daypart is to do, particularly at scale, and at a brand that existed long before starting it.
Restaurant chain executives are Lotus Eaters when it comes to breakfast. The temptation to start serving breakfast and generate the quick sales growth while establishing a long-term legacy at the brand is immense. Many executives have tried this. In Wendy’s case, several CEOs did so.
But once they get into it they realize just how difficult the daypart is, and they can often underinvest in the other dayparts as they try to make it work.
A lot of major chains have discovered this.
Subway, thinking the ubiquity of its restaurants would work in its favor, tried breakfast nearly two decades ago. It has long ago pulled back on the daypart to only those restaurants in which it performs well. Taco Bell, which has struggled to get its breakfast working for an appreciably long time, gave operators permission to end the daypart in 2024. Portillo’s, the fast-casual chain, didn’t even get past the testing phase.
Breakfast is the most habitual of dayparts. Consumers have routines in the morning and, because they’re often in a hurry or on the go, are more reticent to break them.
A restaurant chain getting into breakfast and then marketing the hell out of it can get curiosity seekers. But the true test of the daypart is to get into those routines. That means brands need long-term plans to make it work. Those plans should also include strategies for dealing with locations that do not have the access or local consumer base to support the daypart in the first place.
But maybe the best strategy when it comes to breakfast is just to not do it in the first place. No matter how tempting it is.