- Wendy’s has begun a redesign of its organizational structure at the corporate level in order to support its long-term growth strategy, boost efficiency and streamline its decision making, the company announced Friday.
- As part of that reorganization, the company eliminated the role of president, U.S., and chief commercial officer and Kurt Kane, who held that position, will leave the company, according to an SEC filing. Separate from the organizational restructure, Leigh Burnside, the company’s SVP, chief accounting officer and CFO U.S., has resigned from her position to become CFO of another restaurant company.
- Other companies, including McDonald’s and Starbucks, have begun restructuring and job cuts as well. Starbucks previously eliminated the position of COO.
Prior to this restructure, Wendy’s executive team included two business leader presidents with a lot of autonomy, and these positions served the U.S. business well, Wendy’s CEO Todd Penegor said. But the company decided it needed to operate as a global brand with a unified operating approach to drive domestic and international growth, he said.
“As you take some layers out of the organization, it allows us speed of decision,” Penegor said. “It’ll drive efficiency. It’ll drive productivity. Ultimately the way resources would be reallocated and focused is around driving traditional new restaurant development without any distractions and things that we chased during the course of the past year.”
Now, the company must ensure structural savings are long lasting, he said. The corporate redesign is expected to lead to relatively flat general and administrative expenses in 2023 and 2024 versus 2022, per the press release.
The company has also reviewed several investments it has made over the past few years, and is evaluating how it can reallocate some of these resources toward traditional unit growth and other strategic initiatives. These past investments include testing around Reef Kitchens, hamburger stands, which appeared in Walmart stores in 2021, and Frosty carts, Penegor said.
Wendy’s only has 50 Reef units open split between the U.K., Canada and the U.S., which is far less than its original plan to open 700 across these regions by 2026. The company said last year that it slash 550 Reef units from its pipeline due to low unit volumes. Now, Wendy’s will put its resources behind traditional unit development, driving digital demand, improving operational excellence and building on momentum in its breakfast daypart.
“We want to make sure we got a dedicated focus to drive the U.S. development plan and drive the international development plan with most of our time and energy effort on traditional new units with our Global Next Gen 2.0 design, which we’re really excited about,” Penegor said. Last year, Wendy’s unveiled this new prototype, which includes a delivery pickup window, mobile order parking spaces, in-store shelving for digital orders and a redesigned kitchen.
In light of the corporate restructure Nelson Peltz, CEO and founding partner of Trian Fund Management, Wendy’s largest shareholder with 19% of shares, said in a Friday SEC filing that his company is no longer pursuing a purchase of the fast food chain. On May 24, 2022, Trian previously advised Wendy’s board to explore and evaluate the possibility of Trian buying the company.
“Trian believes that the Company is well-positioned to deliver significant long-term value for shareholders and looks forward to continuing to work with the Board and leadership team to do so,” Peltz said in a press release.
Wendy’s executives said they would provide additional details on this redesign during its full-year earnings report on March 1. Suzanne Thuerk, who is currently VP of accounting, will be appointed chief accounting officer effective Jan. 20, replacing Burnside, according to Wendy’s SEC filing. Burnside will remain with the company until then to support Thuerk’s transition. Thuerk has been with the company since March 2014. The company did not indicate if anyone will fill the CFO U.S. position that Burnside is also vacating.