Wendy’s turnaround effort will include additional restaurant closings, but the company’s new president and CEO said future shutdowns will be more targeted than in the past.
Bob Wright delivered dismal second-quarter earnings on Friday for the fast-food operator, which saw global systemwide sales drop 6.5%, driven by an 8.2% decline in the United States, partially offset by 3.4% growth in international. U.S. same-restaurant sales decreased 7% and international same-restaurant sales dipped 2.3%. And the company said it doesn’t expect things to get better the rest of the year.
“Recommitting to quality is essential to rebuilding our competitive advantage. Customers recognize it, franchisees believe in it, and it’s at the heart of what Dave Thomas built.”
Wendy’s has done several rounds of restaurant closings in the past few years, shuttering hundreds of locations in what Wright described as part of widespread corporate programs. It has closed a net 245 U.S. restaurants year to date.
“Will there be additional closures?” Wright said. “I’m sure there will be additional closures ... [but it will be a] targeted approach that we would use, when we’re working with franchisees, to help get their portfolios healthy — not as a matter of programmatic closing just to shrink the brand. ... If the trade area has moved on and it is a financial drag on that portfolio, then we’re going to support the closing of that location for the health of the system.”
Burger King has been boosted by the reimagining of its Whopper and reported an 8.5% rise in same-store sales for the quarter ended June 30 this week. Meanwhile, top burger chain McDonald’s is struggling along with Wendy’s. The rising cost of beef and customer sensitivity to price has taken a toll.
Wright told Wall Street analysts on the earnings call that the food quality has slipped at Wendy’s, a problem that needs to be addressed. The chain is also lacking innovative offerings that excite customers, he said.
Wright, who did a previous stint as Wendy’s head, came back as CEO in May, replacing Ken Cook. Wright had been at Potbelly Sandwich Works, where he turned the business around.
Wendy’s issues “include quality degradation, challenges around our value offerings, inconsistent operations and marketing that is not driving customers to our restaurants,” according to Wright.
“Wendy’s has always been known for quality, fresh, never-frozen beef, hamburgers made to order, bacon cooked in our restaurants, and fresh produce prepared daily,” he said. “But over time, we’ve drifted away from some of the standards that made Wendy’s distinctive. Recommitting to quality is essential to rebuilding our competitive advantage. Customers recognize it, franchisees believe in it, and it’s at the heart of what [Wendy's founder] Dave Thomas built.”
Wendy’s has more than 7,000 restaurants worldwide. Its franchisees are under pressure because of declining sales, according to Wright.
“When it came to closures, I think what you heard in some previous quarters was closures addressed more as a program for the system,” he said. “And you’ll see us take a much more targeted approach. We’re going to come alongside our franchisees if they need our help.”
Wendy’s withdrew its 2026 financial outlook on Friday, saying that the company’s new leadership is developing a plan to revive the business and make the best use of available funds.