Wendy’s North America systemwide same-store sales increased 2.3% in the second quarter, ended July 3, 2011, President-CEO Roland Smith reported this morning. Average check increased 1.4% in the quarter; transactions rose 0.9%.
Now free of Arby’s drag, The Wendy’s Co. appears energized about strengthening the Wendy’s brand. Most of what was discussed on today’s analyst call—coffee, breakfast, burgers, chicken, remodeling—covered territory discussed in the March call, however. The biggest news was “Redhead Roasters,” the name for the upgraded coffee platform Wendy’s is adding to the menu in tandem with breakfast. A new Iced Coffee will be on the menu soon as the first manifestation of the upgrade.
The company’s challenge now is to get all its franchisees to share its excitement about future opportunities. The Wendy’s Co. reportedly has filed suit against one franchisee for failing to make the needed investments (about $20,000 per store in grill enhancements) for the October national introduction of the Dave’s Hot ’n Juicy Cheeseburgers line, which has provided a sales boost in test.
To ensure operator buy-in with next year’s breakfast rollout, Wendy’s is offering low-cost loans to help with the $25,000 per-unit investment (new toasters and such). The company has promised to have 1,000 units—including 600 franchised stores—offering breakfast by year-end. To help reach that, Wendy’s Co. is offering “early adopters” a partial deferral of royalty payments that can be used to fund local breakfast advertising.
Wendy’s in Manhattan will add breakfast this quarter, Smith promised. Wendy’s intends to test baked goods such as muffins, sweet rolls and bagels for the breakfast menu, which Smith once again forecast will add $150,000 per store in sales.
The company repeated plans to introduce the “Gold Chicken” upgrade program for that menu category in 2012. This includes the Bruschetta Chicken sandwich (at left) topped with tomatoes, chopped basil and “balsamic glaze” that has been testing this year.