Wendy’s Re-Imaging Perks Up Sales

Here’s a wake-up call for any operators still putting off store remodeling and re-imaging. It’s a winning strategy for Wendy’s.

During the company’s second-quarter earnings call on Aug. 9, Wendy’s CEO Emil Brolick said early results indicate re-imaged stores are spurring foot traffic and reviving sales. He reported that same-store sales in North America increased 3.2% for the company during the quarter.

The Columbus, Ohio, chain opened 10 prototype restaurants in 2011, scoring an average sales boost of more than 25%. “Based on the strong sales increases, we have generated at our reimaged restaurants, we are planning to accelerate Image Activation in 2013 and are targeting 50% of company-operated restaurants for re-imaging by the end of 2015,” Brolick said.

This year, Wendy’s expects to reimage 50 company stores and build an additional 17 stores with the new image. Brolick said the chain’s North American franchisees will open 40 of the newly imaged units. Wendy’s long-term corporate strategy, he told investors, is to slightly reduce the number of company-operated restaurants. The first franchised re-imaged store opened in Hershey, Pa., in early July; a new company store with an urban design just debuted in Orem, Utah, and also has shown significant sales increases.

Overall, Wendy’s opened 13 new units during the quarter; it closed 19 underperforming units. Franchisees closed another 28 stores.

As of July 1, Wendy’s had 6,547 restaurants worldwide; 354 of those units are operated by franchisees. The company also has more than 600 restaurants under development agreements outside of North America.