Wendy’s Future Outlook
The following transaction report displays how the market is responding to the current deals while highlighting recent closings throughout the country. The report also includes specific highlights on sale leasebacks, three of the top operators, and the overall sentiment regarding Wendy’s moving into 2024.
How is Wendy’s Performing?
Wendy’s has been on an upward trajectory regarding sales performance over the last 12 months. President and Chief Executive Officer Todd Penegor recently stated in Wendy’s Q2 2023 earnings call, “We continued to drive significant profit expansion, supported by strong same-restaurant sales momentum, resulting in an over 200 basis point year-over-year increase in U.S. Company-operated restaurant margin. During the quarter, our breakfast and late-night dayparts delivered outsized growth, and we sustained our digital strength. We also continued to make progress against our development goal, with 80 global restaurant openings year to date. With the results we delivered in the first half of the year and the significant runway remaining for each of our strategic growth pillars, I am confident we will deliver our short and long-term outlook, driving meaningful global growth in 2023 and beyond.”
Recent Wendy’s News
Global Next Gen New Global Restaurant Design Standard
- Delivery Pick-Up Window: A window dedicated to delivery drivers and grab-and-go orders. There will also be designated parking for this window.
- Dedicated Mobile Pick-Up: Pick-up parking spots for delivery drivers will also be designated for mobile orders. Thus allowing an employee to walk the order out to the car.
- Reimagined Kitchen: A new gallery-style kitchen design, which runs from the front to the back of the restaurant, increases efficiency and oversight for the crew.
- Next Generation Technology: These new stores will ‘come alive’ through AI. Cutting operators’ costs by using AI to take orders for the drive-thru. Along with that, there will also be new technology expediting the cooking process.
Operators to Highlight
HAZA Group
The largest Wendy’s Franchisee (HAZA Foods), which predominantly operates within Texas, Louisiana, and Ohio, among other states, has been one of the most well-known operators within the brand. They continue to show their dedication to growing the brand by developing new stores, upholding Wendy’s core values, and constantly delivering excellent service across their operations.
Meritage Hospitality Group
Meritage Hospitality Group (MHGU), a publicly traded company, has committed to the brand of Wendy’s by promising all their locations to be reimaged within the coming years. Something that all landlords want to hear; along with that, they have been very active in finding new markets to expand and develop new Wendy’s locations. In the past 9 months, Meritage has acquired almost 70 established sites nationwide.
Flynn Restaurant Group
Flynn recently made the headlines by signing a new master franchise agreement with Wendy’s company to develop 200 locations in Australia by 2034. This isn’t what caused Flynn to be the number one rated franchisee of 2023; they have invested in growing the other brands they operate, such as Arby’s, Pizza Hut, Applebee’s, and Taco Bell, just to name a few. Their approach to how they operate each individual location, along with their 100% staffed guarantee, has caused them to keep operations moving in a direction that will only keep them atop the best Franchisees throughout the country
Sale Leasebacks
A sale leaseback is a real estate transaction that acts as a financing tool in which an owner-operator sells their real estate to a buyer and remains the occupier of the real estate and operator of the business through a simultaneously executed lease.
Extracting 100 percent of the property’s equity, sale leasebacks allow the seller to use the liquidated capital to reinvest back into the company through financing renovations, operations, and expansions. Once the property is sold, the transaction further benefits the seller’s business with a reduction in interest expense and removes the fixed asset with its associated liabilities from the balance sheet.
