From innovative design spaces (think drive-thru only storefronts and special locations that serve universities and military bases) to a punch-powered social media presence to an ever-changing yet traditional menu that has maintained and recruited customers for over five decades, it’s clear that Wendy’s knows what it’s doing.
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Per the company’s last earnings report, Wendy’s reported a revenue of $470.3 million in Q3 of 2021, up 4% year over year.
And as the brand sets its sight on growth, its choosing to focus in on what really pumps and drives business and builds community — its franchisees.
“We’ve had a lot of change and evolution in our franchise system over the last five, seven years, we’ve gone through a big effort around what we call system optimization,” Abigail Pringle, Wendy’s President, International and Chief Development Officer tells Entrepreneur exclusively. “We’re a 52-year-old brand, so we’ve had folks that have been in the system for a long time, and we’ve gone through a lot of succession planning. We have next generation franchisees coming into the system, but we’ve also been actively recruiting new franchisees. And we’re now accelerating that.”
A whopping 95% of Wendy’s restaurants are franchised, and now the company is making moves to increase both accessibility for and diversity among franchisees through its new initiative dubbed Own Your Opportunity, which aims to specifically increase Wendy’s ownership among women and people of color.
“We really want to increase the diversity of our franchisees. And so importantly, we have a very intentional focus on bringing more women and bringing people of color and they are definitely not the majority of our profile,” Pringle says. “And we have been increasing it over the last few years. But we think we need to accelerate even further.”
Pringle explains that standard Wendy’s franchisees are people that are “well-capitalized” with a strong “growth mindset” but more importantly, have the leadership profile that fits the Wendy’s MO: investing in the people that they serve (through creating long-lasting careers with training development, fostering a strong and exciting work culture) and representing the communities that their restaurants serve.
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Though Wendy’s hasn’t specifically benchmarked their franchisee profile to date (the company began doing so within the last year) Pringle explains that franchisees are encouraged to self-identify though it’s not a requirement, explaining that women are “definitely more of the exception, not the rule” when it comes to the standard franchisee and that they are “on the minority side.”
With the Own Your Opportunity initiative, the company is taking specific steps to change that.
“One of the big things we saw that was a hindrance was how do we find great women entrepreneurs and how do we narrow the gap in terms of getting them access to capital,” Pringle tells us, explaining that the chain partnered last year with First Women’s Bank, the first women-founded and owned bank based in Chicago. “We’re a mission partner of that bank and they’re helping us find great women entrepreneurs, they’re helping finance some of these new franchisee deals.”
Pringle says that the company has also doubled down on efforts to talk to existing women franchisees through focus groups and networking events in an effort to connect franchisees from different communities with each other and help find a way to attract new female entrepreneurs that would be interested in owning their own little slice of the fast-food titan.
Wendy’s has also changed its financial requirements for interested franchisees in an attempt to make opportunities more accessible to those in underrepresented communities.
“We realized we weren’t very competitive and it really was a high bar in order to be able to come into the system,” Pringle admits. “We can be financially smart and also be more competitive, so we changed our financial requirements.”
This includes changing benchmarks for net worth and liquidity for aspiring franchisees, while also making an effort to increase effort to capital for those interested by creating financing partnerships with major lending partners like City National Bank, Huntington National Bank and Wintrust Franchise Finance.
“They’re really partnering with us to make access to capital much more approachable for candidates who want to build one restaurant and then build two and then build three right over time. And so that’s a really big unlock, I think that will change our ability to recruit more folks,” Pringle says.
Wendy’s has also launched a Build-to-Suit development fund which will take most of the heavy lift off of franchisees who hope to start with the company.
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“We’re putting our own money into this equation,” Pringle tells us. “We actually have a turnkey program where we find the site, we build the location, and we hand over the keys to a new franchisee. And so they have part of the financial requirements, but we also are investing our capital to create an opportunity through building the restaurants. It really does change the game, I think, to be able to say, ‘Gosh, I don’t have a background in development or I’m not sure how to go and buy real estate.’ We’ve done all of that for them and engage and partner with them on that kind of a program.”
The variation in different Wendy’s restaurant design types allows for massive (and seemingly endless) options and opportunity for those looking to open a their own franchise.
Though standard Wendy’s restaurants are most common in the U.S. (which is the company’s biggest market), they’re not the only store design option for franchisees.
“The DNA, the core design and the experience is the same, but the way we bring [Wendy’s] to life can be different in each community. And I think that’s part of better serving the community that we’re in,” Pringle says. “I think that design evolution has changed things. And I think it will open up the door.”
Design evolution certainly helped the company succeed through the pandemic where so many faltered amid restaurant closings due to pandemic protocols and early-day lockdowns.
It’s this success and momentum within the company that has the company in the ideal position to double down on franchisee expansion and to look at the future with an accelerated pace.
“I think that the brand is never been stronger. Our brand is in a really healthy position. In the U.S. we’re now the number two hamburger chain, we are growing market share traffic and dollar share — we are doing that in all other parts of the world,” Pringle says. “We believe that we can grow the brand. There’s a huge opportunity to be able to better serve customers in the communities. We want to be able to grow.”
Wendy’s was up nearly 6% year over year as of Monday afternoon.