For Bob Wright, coming back to Wendy’s was personal

Bob Wright spent two decades at Wendy's. He called its turnaround his "personal mission." | Photo: Shutterstock

When he was asked to return to Wendy’s to become its CEO, Bob Wright did not make the decision alone.

“This was the type of decision my wife and I made,” he said in an interview. “She’s been with me every step of the way. We’ve been together for 35 years. We met in the restaurant business, and taking on a challenge like this is a family affair. It’s not just one person.”

Wright spent 12 years with Domino’s, working in operations, before he went to Wendy’s in 1998. He would rise to chief operating officer, before that position was eliminated in a 2019 restructuring. He went to Potbelly and turned that brand around until its sale to the convenience store chain RaceTrac last year.

He was brought back to the company several months after the unexpected departure of Kirk Tanner, who left to take the CEO job at Hershey’s. His hiring brought some needed stability to a company that has been rocked by change over the past two-plus years. “I’m absolutely delighted to be back,” he said.

But he also makes no bones about the task ahead of him. Same-store sales have declined for seven straight quarters, including a 5.9% decline in the third quarter. One of the chain’s largest franchisees, Meritage Hospitality Group, is in bankruptcy. The company’s stock lost two-thirds of its valuation over the past five years.

Its longtime former chairman and largest shareholder, meanwhile, implied that the chain’s debt level could soon become a problem in making a lowball, $1.4 billion offer for the company.

That’s a brutal situation for a brand built by Dave Thomas, one that proved a large fast-food chain could make fresh beef burgers to order without sacrificing speed.

“From the time I arrived, I fell in love with the culture, the brand, and certainly what Dave had created,” he said. “I understood the power of a brand built uniquely.”

“I see it as a personal mission,” he added. “It fits for me personally, to want to do something like this at this stage of my career. I’m really proud of Dave’s legacy.”

(Read more on Bob Wright’s turnaround plan.)

Fixing this won’t be easy. The fast-food sector is struggling with a host of issues, from consumers pressured by inflation to rising use of GLP-1s and their associated impact on appetites.

Wright in his first two earnings calls has provided a blunt assessment of the situation. His Dave’s Way revitalization strategy includes a selection of strategies common in such plans, including improvements to the food, value, marketing, and operations. It also includes “system optimization,” which is also common in franchise comebacks, but features potential financial assistance for operators, including the prospect of Wendy’s buying locations.

That will be important. With traffic weak across a broad section of the industry, many lenders have backed off providing financing, which has created challenges for many operators. For those that took out loans coming out of the pandemic, the result is creating a capital access challenge. That could make this turnaround plan particularly challenging.

Bob Wright| Photo courtesy of Wendy's

Wright recently presented this plan to franchisees, and on the call said that operator surveys taken before and after that presentation demonstrated a big jump in sentiment, which Wright believes is a sign that the ideas have legs. Wendy’s will have a tough time getting that strategy across the finish line if it doesn’t have buy-in from the franchisee base.

“We restored the optimism and we restored some confidence, and we don’t take that lightly,” he said. “We’ve got to keep earning it.”

Wendy’s does have some green shoots. The company has changed its marketing, focusing on its made-to-order burgers and its fresh beef. It provided some temporary value, a Dave’s Single combo for $7.99. Same-store sales improved sequentially during the quarter, providing some quick wins that are crucial in any turnaround plan.

The company also reached a deal with Meritage to buy 163 restaurants, while it works with the operator to sell other locations.

“When you’re in a turnaround situation, the prioritization, quite candidly, are the things you can see action on sooner rather than later,” he said. “The ones we have a bias toward are low-investment, high-return, and the highest combination of wins at this time because we’re in a dog fight to get our system as healthy as fast as we possibly can, or healthier.”

Restaurant Business Editor-in-Chief Jonathan Maze is a longtime industry journalist who writes about restaurant finance, mergers and acquisitions and the economy, with a particular focus on quick-service restaurants.

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