A Wendy’s burger could be more difficult to get for certain people by the time the year 2024 comes to a close. It was only recently reported that the firm intends to shut a significant number of its locations by the end of the year, and it is possible that the closures will have an effect on the Wendy’s that is located in your area.
During an earnings call that took place on October 31st, after the release of the company’s most recent quarterly results, Wendy’s made the announcement that about 140 restaurants would be closing before the end of the year. What are the reasons behind these closures? The President and Chief Executive Officer of Wendy’s, Kirk Tanner, said that the company is aiming to enhance the general health of the network by removing “outdated” stores that are situated in “underperforming trade areas.”
The locations that are being considered for closure have yearly sales that average $1.1 million and have “operating margins that are well below the system average,” according to Tanner. Additionally, he added that “it’s not one particular area” that would be impacted the shutdown of the establishments.
This approach, which involves shuttering restaurants that are not functioning well in order to enhance the chain as a whole, is quite popular in the sector. As an example, competing fast-food franchises like Subway and Burger King have both shut down hundreds of their outlets in recent years for reasons that are comparable to one another.
Tanner, on the other hand, said that the firm intends to replace the outlets that have been closed with “new restaurants at more favorable environments with significantly improved sales and profitability.” In addition, Wendy’s is establishing a substantial number of new sites at a quick pace, despite the fact that it is shutting a significant number of stores this year. In point of fact, Tanner anticipates that the launching of new restaurants will be sufficient to compensate for all of the closures, “making our net unit growth approximately the same as it was the previous year.” As of the conclusion of the previous quarter, the chain had a total of 6,011 restaurants functioning across the United States.
In the future, Wendy’s intends to beef up its growth efforts and forecasts that the number of restaurants it operates will increase by between three and four percent in the year 2025.
“By the conclusion of 2024, we will have opened over five hundred new restaurants over the past two decades and have the confidence they will deliver an elevated growth in 2025 and for years to come,” Tanner said in an interview.
In addition, the business has been revamping a large number of restaurants, with 89% of its locations throughout the world having previously been successfully upgraded. Additionally, the chain sees a longer-term possibility to significantly increase its footprint in the United States.
“When I look at my potential…we still have aircraft in the U.S. to have another additional couple of a thousand restaurants,” Tanner said to reporters.