Difficult times tend to foster changes in corporate leadership, and the last 12 months prove the rule for restaurants. We counted more than three dozen announcements of power transfers at restaurant chains during 2016, and that doesn’t include the second switches at Smashburger and McAlister’s Deli.
But it does extend to changes at chains small (The Melt, Granite City, True Food Kitchen) and large (McDonald’s, Chili’s, Wendy’s, Ruby Tuesday). Here are four shifts at the top that are particularly packed with drama.
1. McDonald’s: Chris Kempczinski for Mike Andres
You have to wonder how the news was received in the executive suite and boardroom. After showing results from a turnaround that many thought would require more time, the industry’s humbled sales giant learned a key architect in the comeback had decided to call it quits. Mike Andres, president of the all-important U.S. operations, said he would retire at year’s end.
Even by corporate-speak standards, on which McDonald’s could write a textbook, the burger giant was effusive in praising Andres.
“Mike has been relentless in his commitment to building a better brand,” CEO Steve Easterbrook said in the press announcement. “From significant strides in food quality to meaningful customer initiatives like all-day breakfast and forging an even stronger partnership between U.S. operators and the company, his commitment to our customers is unmistakable."
But it was just as gushing in heralding the appointment of Kempczinski, EVP of strategy, business development and innovation until Jan. 1. Corporate noted in the Aug. 31 announcement that Kempczinski would work with Andres for the four months to ensure a smooth transition.
2. Starbucks: Kevin Johnson for Howard Schultz
Even with all the digressions into social causes and politics, Howard Schultz has still been the straw stirring the drink at Starbucks. What happens now that he’s shifting his focus to one avenue of growth, the company’s high-end Reserve business?
And will he be more successful in surrendering the CEO’s title this time than he was when he ceded it to Jim Donald in 2000—only to reclaim the job eight years later in dramatic fashion? He contended at the time that Starbucks had drifted from its mission, the guiding principle that Schultz had crafted. Will he be truly willing to give up the helm now?
That’s only part of the drama surrounding the transfer of power, which doesn’t take place until early April. What will Johnson be like as a CEO? His background is in technology, which has been an undeniable growth engine for Starbucks. Will the digitization of the coffee experience accelerate? When does it start to erode what Schultz has termed a coffee culture?
Stay tuned for this one.
3. Wendy’s: Todd Penegor for Emil Brolick
A long lead time didn’t make the change at the top any less dramatic for Wendy’s, one of the quick-service sector’s best-performing brands in recent years. The burger chain has been flying high since Emil Brolick took control in 2011 as CEO, the job that had eluded him under prior management, prompting a defection to Taco Bell.
Brolick sharpened the chain’s focus on quality, revamping its signature burger, ending flirtations with breakfast and deli sandwiches, and aiming to outstrip customers’ expectations of what they could expect from a fast-food outlet.
Everything was going well when Brolick announced in October 2015 that he would retire in March, ending his high-profile run. His designated successor was Todd Penegor, CFO for the prior three years. Wendy’s operations-steeped culture has been suspicious of financial types in the past, but Penegor had the bona fides: His father had been a single-store Wendy’s franchisee, and he’d literally grown up with the company.
Penegor, who took over in May, has largely continued down the path Brolick had lit. For instance, he was quick to counter speculation that Wendy’s would diversify into new concepts and meal occasions. A Japanese restaurant brand called First Kitchen would not be exported to the United States, he told the Wendy’s hometown paper, and breakfast was not a priority, despite the spotlight it was getting from other quick-service chains. But he has indicated he’ll step up international expansion.
4. Which Wich: Ric Scicchitano for Jeff Sinelli
Whenever a chain’s founder relinquishes day-to-day responsibilities, there’s a flash of foreboding. Will the proud and dedicated parent be able to let go? Will the incomer find a way to make changes without looking disrespectful of long-held practices and beliefs? Will business considerations trump cultural concerns and traditions?
Members of the Which Wich team say they’re more enthused than worried. Which Wich said Sinelli brought in its first-ever president to accelerate franchise growth. Scicchitano also brings serious food chops to the job, having worked for years on the menu of Corner Bakery since graduating from the Culinary Institute of America.
Meanwhile, they say, Sinelli will be there to serve as the conscience of the brand and the culture that’s evolved along with it.