Wendy All Grown Up

Wendy's Redhead Gets a Makeover

By ANNIE GASPARRO And SAABIRA CHAUDHURI

Updated October 12, 2012, 3:37 p.m. ET

       To adapt to the changing preferences of consumer tastes, Wendy's Corporation has remodeled their logo, brick and mortar stores, and menu. In order to compete with the growing fast-casual companies such as Chipotle and Panera, Wendy's has decided to focus on fresh ingredients. Their goal is to find a medium between Mcdonald's and these fast-casual restaurants. Without removing their tradition, the hope is that they can modernize themselves in a intriguing way.

       "The remodeling is extensive—offering features like lounge seating with fireplaces, flat-screen TVs, Wi-Fi and digital menuboards. The process is going slowly, though."

       The company's new approach to their appearance faces some problems however. The Wendy's restaurant change is divided into two segments, the company owned and the franchised operated locations. With the restaurants of 1,425 and 5,122 in each segment respectively, there is a divergence in the capabilities and resources of the two. Understandably so, the franchised locations can not afford the same remodels in the same short period of time like the company operated.  To help bridge the divide the company is offering $10 Million to franchises in incentives for the remodel. 

     Progresses are still being made and the results are still yet to come. The hopes that a friendlier logo, a warmer interior, and a healthier menu will bring in substantial profits. This profits can hopefully counter the second quarter loss announced in August due to expenses and debt. 

    At the end of the day, Wendy's has faced rising commodity costs and failed marketing promotions as of recently. With the new addition of Mr. Bahner, a longtime Procter & Gamble Co. executive, as the new chief marketing executive, Wendy's will hopefully be able to build upon their old tradition values with new marketing promotions that will increase their competitive advantage against the brand names like Mcdonald's and Panera. 

     I think that finding a happy medium fast-food and fast-casual is crucial to the possibilities for success for Wendy's. Although many may believe that fast-food is fast-food it does not matter the name, I find that this is something that Wendy's can build on. 

    People choose Panera and/or Chipotle because it is the healthier decision. Undoubtedly, healthy foods are at the forefront of the food industry right now as consumers are becoming a lot more health conscious and aware of what they are intaking. However, there are still times that it is easier to just grab a Burger King drive-thru burger and fries and be on your way. 

    Genius idea: Combined the two qualities of each form of fast-food and fast-casual, and you will have reached the desirable mean. If Wendy's can withstand the expenses, promote, and utilize healthier and fresher products they will be capable of finding that middle.  I think that this middle can allow Wendy's to regain some of the market share that they have lost to Panera Breads or Chipotles. This in between approach allows them to offer the best of both worlds. 

    The only thing I am not sure about with this concept is the changing of the logo. I understand that it is outdated and pretty stern for a simple fast-food restaurant, but it what they are known as. The tradition of "old fashion burgers" is what got them to have over 6000 locations nationally. I agree change is good and with out a doubt necessary to adapt to the new consumer preferences and taste, but I do not think it is a strong idea to stray to far from who they are and what they were built from. Although, their goal may be to reach new and more modern customers that does not mean they can just forget the old and loyal customers of the past fifty years or so.  If they forget them, they will most likely loss more than they gain.

Topics: Franchising, Market Penetration, Brand Competition

Wall Street Journal "Wendy's Redheaded Mascot Gets Makeover"