Wendy's doesn't have a permanent CEO yet, but it is working with a former CEO to help with a brand revitalization.
The fast-food chain said Thursday it has hired Creed UnCo, a consulting firm led by former Taco Bell and Yum Brands CEO Greg Creed, to help with a brand revitalization. Creed's company will work to improve Wendy's marketing effectiveness "based on data-driven, needs-based customer segmentation analyses to improve relevance, ease and distinctiveness of the Wendy's brand."
The effort is part of "Project Fresh," a new strategic plan that will shift resources at the company to improve unit volumes and store profitability.
"Wendy's board of directors and management team are dissatisfied with the current valuation of the company and have been working to put the company on the right path to create value for our franchisees, employees and shareholders," Art Winkleblack, Wendy's chairman, said in a statement. "We are confident that Project Fresh will position Wendy's as the industry leader, one that guests love, franchisees are proud to operate, teams are excited to be part of, and creates significant value for our shareholders."
The plan comes as Wendy's sales and its share price have taken a hit. Same-store sales have declined in each of the past two quarters, including a 3.6% decline in the second quarter—a number well behind primary competitors McDonald's and Burger King.
Kirk Tanner, hired last year, left to take a job as CEO of The Hershey Co., leaving CFO Ken Cook, who himself was only hired late last year, to become interim CEO. Wendy's stock price is down 50% over the past year.
Wendy's will reallocate resources to improve average-unit volume growth in the U.S. The company said it plans to optimize labor and operating hours to improve franchisee profitability.
The company also said it will focus on improving operations, with investments in its restaurants to improve the customer experience. Wendy's investments will focus on hospitality, digital and equipment efficiency, labor, technology, training and simplified processes.
Wendy's will reduce its spending on a "build-to-suit" program by $20 million this year and likely more next year. Under that program, Wendy's builds restaurants and sells them to franchisees to spur unit growth. The reduced spending signals a shift in focus away from unit growth toward improvements in unit volumes. Wendy's will reinvest those funds in technology and marketing.
The company is also working with a financial adviser on other opportunities to "optimize its capital allocation."
Winkleblack added that Wendy's is "carefully evaluating internal and external" CEO candidates "to ensure the strongest leadership to guide the company through its next phase of growth."
"The board will take the time necessary for this process and is targeting completion by the end of the year," he said.
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