Dive Brief:
- Wendy’s is reallocating capital — starting with $20 million from its development initiatives — to store-level improvements and marketing in hopes of improving its average unit volume in the United States, the chain announced Thursday.
- The emphasis on U.S. AUV is part of a strategic plan called Project Fresh, which the chain’s leadership said was intended to strengthen the brand, increase profitability and return to growth.
- Wendy’s Project Fresh follows two consecutive quarters of same-store sales declines and considerable turnover in the chain’s CEO position in recent years.
Dive Insight:
Wendy’s difficulties with sales growth and its stock price — which has declined by more than half since late 2024 — pushed the chain to undertake this strategic repositioning. Chairman of the Board Art Winkleblack said the company’s leadership was “dissatisfied with the current valuation of the Company and have been working to put the Company on the right path to create value for our franchisees, employees and shareholders.”
Project Fresh will hinge on improving the brand’s image. To that end, Wendy’s has hired Creed UnCo, a brand consultancy led by former Taco Bell and Yum Brands CEO Greg Creed “to assist in transforming our marketing effectiveness based on data-driven, needs-based customer segmentation analyses,” according to the press release.
More effective marketing could help with another strategic goal of the program: increasing its average unit volume. Wendy’s AUV was about $2.3 million for company-owned and $2.1 million for franchised locations in 2024, according to the chain’s franchise disclosure document. While this is higher than competitors like Burger King ($1.6 million) and Jack in the Box ($1.9 million), it is still far behind McDonald’s nearly $4 million AUV, according to the chains’ respective FDDs.
To support AUV growth, Wendy’s will shift resources toward optimizing labor and operating hours. The brand is also investing in additional training, equipment, technology and simplifying processes, according to the press release.
Some of the capital necessary for those investments in AUV will come from the Build-to-Suit program — a roughly $100 million program meant to increase density in underdeveloped trade areas — with Wendy’s reallocating $20 million this year and more next year. Wendy’s is working with a financial advisor to identify other potential pools of capital it can use to juice AUVs.
However, Wendy’s does not seem to be pulling back on its international expansion.
“Internationally, capital will continue to be deployed efficiently to sustain strong net unit growth and we remain encouraged by our growth trajectory, recent market entries and our significant international opportunities,” the press release states.
In the U.S., Wendy’s has focused on menu innovation and marketing initiatives — though the sheer volume of promotional opportunities diluted its brand messaging over the summer, interim CEO Ken Cook said in August. Wendy’s said it would simplify its marketing calendar through the last months of the year to avoid straining operations. On the menu side, the brand recently launched its chicken tenders, the latest major QSR to add the menu item in 2025.
