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"Wendy's International has closed its last Downtown restaurant, at the Fifth Third Center."

So read the opening paragraph of a story in The Columbus Dispatch on Friday, January 4, 2008. (“Wendy's throws in the towel Downtown” by Monique Curet.) Those of us who live and work downtown tend to take particular interest in businesses that open and close in our favorite bit of the city. As a general case, fast food restaurants don't attract much attention for the downtown set—many of us would rather pay eight dollars for a “gourmet” hamburger in a comfortable setting. Wendy's, however, is a special case. Based in the Columbus suburb of Dublin, it's a hometown success story. And the last one downtown is closing.

What we are witnessing is not simply the closing of a restaurant downtown but the looting of a brand that used to mean something. In a world full of fast food Wendy's defied most of the stereotypes, even earning the preferred category description of “quick-service.” In a business where pennies and seconds can mean the difference between profit and loss, Wendy's managed to grow into a global multibillion-dollar business. For as long as I can remember, Wendy's has always been a classier experience than the competition; only when visiting the company's corporate headquarters did I get a view into why. There hung a banner proclaiming the values that the company's founder, Dave Thomas, used to drive the company.

Value 1: Quality is Our Recipe
Value 2: Do the Right Thing
Value 3: Treat People with Respect
Value 4: Profit is Not a Dirty Word
Value 5: Give Something Back

Since the passing of Thomas, who was the star of the company's folksy television commercials, the public identity of Wendy's has been in question. The current lot of ads features people wearing wigs with pigtails meant to be reminiscent of the cartoon drawing of a young redheaded Wendy that graces each of the stores. The ads are presumably meant to be funny but they're sophomoric and absurd. In the ads, the company's primary products are called burgers—something that never would have happened with Thomas as the spokesman. Quality required not cutting corners. Hence, the patties were square and the full word hamburger was always used. The ads are utterly grotesque and an abomination. I hate them. They are terrible and they are destroying the reputation of Wendy's as a place where you could go to get an old fashioned hamburger and be treated with a bit of respect.

Changes to the menu of late have been confusing and turning a trip to Wendy's into a trip to any other fast-food joint. They still call it a Frosty, but with the “vanilla or chocolate?” question that follows it up, we're left with the realization that it's just a fast-food milkshake. Throwing chopped bits of candy in there is now an option; apparently it was too boring the other way.

Suggesting that things are going to get worse for Wendy's before they get better—if indeed better times could ever be ahead for a company that has apparently lost its soul—are the empty-headed remarks of Wendy's spokesman Denny Lynch, who told the Dispatch that the closing of the store is “indicative of Downtown” Oh, how well would have Wendy's stores done downtown if not for being a victim of cruel fate!

Source: City of Columbus

As I am wont to do, I decided to perform a brief examination of the data. I was driven by the reaction that I had to the remarks that the Dispatch attributed to Mr. Lynch: revulsion. I suspected that those pathetic ads weren't just annoying to me, but that they were ineffective. It seemed perfectly absurd that putting a red wig on an actor would be an effective replacement for the real deal, Dave Thomas, doing a simple pitch based on the quality of his product, the experience he offered, and the company that he started. After all, the “Mr. Wendy's” ads were pulled because when confronted with the same challenge, they didn't seem to do the trick.

It seems to me that if indeed a closing is “indicative” of downtown, there would be plenty of other closings—outpacing openings. This would lead to an accelerated surplus of space for lease downtown. After doing some “research”—throwing words at Google—I found the nearby chart showing that vacancy rates in downtown are actually falling, not rising. Furthermore, vacancy rates are lower downtown than they are in suburban areas. (It is worth noting that these figures are still quite high. Nevertheless, they're nowhere near what they were just a few years ago when The Wall Street Journal would point to downtown Columbus as a city with vacancy rates that were among the highest in the country.

In the same Dispatch article, Jeff Mathes owner of Due Amici was quoted as saying that there's “a lot of positive momentum” in the area north of the Statehouse—which includes Gay Street and Due Amici—while south of the Statehouse, including the location of the last downtown Wendy's, “is a ghost town.” In other words, there's a little secret that maybe Wendy's present management would do well to be clued into: Location, location, location!

A second indicator that the closing of Wendy's is “indicative” of downtown would be that other restaurants in the chain would be performing well. On the same day that the Dispatch ran its article, The Wall Street Journal ran another, noting a decline in quarterly sales for the company overall. “Sales,” wrote Andrew Edwards for the Journal, “have gotten notably worse over the last two months.” (How long have those idiotic red-wig ads been running, anyway?) So while performance of the particular restaurant in downtown Columbus might have been worse than elsewhere in the chain, it would appear that declining sales isn't something unique to downtown Columbus.

A third indicator would be comparison of the company's performance against its competitors. I chose McDonald's Corp. and Yum! Brands, Inc. (parent of KFC, Pizza Hut, Taco Bell and Long John Silver's, among others). Comparisons for these three companies can be made using the chart nearby. Wendy's is the blue line with the precipitous drop in stock price in the third quarter of 2006. The only thing that keeps me from saying that the stock “tanked” on that fateful day is that sometimes-annoying intellectual integrity that I have; that huge drop was due to the spin-off of Tim Horton's. Of course, the spin-off was executed to allow the company to focus on its core business, but given the direction that the blue line has continued to take, it seems that maybe that strategy didn't work so well. Even more interesting is how completely both McDonald's Corp. and Yum! Brands, Inc., are trouncing Wendy's. Of the three, only Wendy's is managing to underperform the Dow. Congratulations!

It is with the above facts in mind that I reject without qualification Mr. Lynch's remarks as baseless and, worse, destructive to those of us who have been working to make downtown Columbus a great community. Downtown Columbus has a lot going for it; Wendy's blaming its woes on its community will do nothing to right the course. The outgoing kick at the community is as much a shocking violation of Value 5 as those stupid ads are a violation of Value 3. I humbly suggest the application of Value 2 by taking responsibility for the mess, ending the insults to the intelligence of neighbors, customers, and investors, and doing what worked when Dave Thomas was around: differentiating Wendy's from the others out there. Get back to the real deal: surely there is someone in the company who knows what Wendy's is all about and can draw customers into friendly restaurants placed in convenient locations in vibrant neighborhoods—maybe even in downtown Columbus.

Created by cmcurtin
Last modified 2008-01-06 06:28 PM

Wendy's vs. reality

Posted by mfreeman at 2009-01-27 12:59 AM
Personally, I mourned when the Wendy's at Spring and High Streets closed. I have no way to know what the sales figures looked like there, but it was always packed around lunch time whenever I went there. With AEP, BWC, Nationwide, and the Federal Building so close, I can't imagine that the place wasn't making money. Your charts tend to confirm my hypothesis that there was some other reason for the restaurant closings downtown than what Wendy's management stated. The McD's across the street in the Nationwide plaza is still thriving to this day, years after that Wendy's closed. And seriously, who prefers the food at McD's to that served by Wendy's?

[Except, of course, for breakfast. Wendy's pulled out of the breakfast market many years ago (I remember yummy french toast with warm blueberry compote and a side of bacon in the 80's). While they attributed the failure to the lack of portability of the menu items (it's hard to eat french toast while you are driving), I personally think that it was due to their complete inability to fill drive-thru breakfast orders accurately. (After all, McD's has been making money on those Hotcakes and Sausage platters since the 70's and they are no more portable that what Wendy's was selling.) Finally, in 2006 they (partially) rolled out a breakfast menu once again. Except that this time, it featured a variety of items that no one wanted to actually buy. They are now trying to come up with yet another new breakfast menu ( to be rolled out in 2011.]

The closing of the Wendy's across the street from the old COSI location on East Broad St. (the first Wendy's restaurant) was truly sad, but no surprise given that sales all but disappeared when COSI moved. I don't see a conspiracy theory there. However, the true reason for the Spring/High closing remains a mystery to me.

I was delighted when a close friend was selected by a market research firm to do a taste test at Wendy's last week. What would they be testing? New breakfast items? Something totally new for lunch/dinner? Nope. Just a minor potential retooling of their hamburger. A new patty (too salty and *not* a thicker or higher-quality patty to compete with the McD's Angus) and questions about different size buns, how many pickles did people prefer, and other such silliness. No comments were accepted, just a list of yes/no questions to answer. (What's the point of bringing in people to test the food if you constrain the information they want to provide?) While I prefer the old "Hot n' Juicy" Wendy's hamburger from the late 70's, I can understand why they switched to the less flavorful but healthier and leaner patty. But to change it now after all these years seems silly. If it ain't broke...

They have a habit of this kind of thing. They used to have a great grilled chicken sandwich with honey mustard. Then they "improved" it, gave it a new name, and added a "savory sauce" that was truly horrible. After a while, they got rid of that sauce (by popular demand). But then they changed the sandwich again (no fanfare this time), using stringier, thinner (and consequently drier) chicken breasts. I now go to BK for grilled chicken sandwiches. (On the other hand, they haven't managed to screw up the Spicy Chicken sandwich since it was originally introduced, and I hope it stays just as it is. My sinuses simply couldn't handle living in Columbus without getting cleared out a bit by one of those, which I consider a great over the counter remedy for congestion.)

As for dessert, while I do like the Frosty, they really need some variety. I don't mean more variations of the Frosty either. I miss their big chocolate chip cookies. They have nothing too compare with the Arby's turnovers or the BK Hershey's or Apple Pie, or the McD's Apple or Cherry pie or cookies. Almost every other fast food chain has several types of dessert offerings. Besides, who wants a nice cold Frosty when it is 4 degrees outside? I'd much prefer a cherry turnover or a hot apple pie.

I have heard from contacts in the know on such matters that Arby's management found that Wendy's is far better run than their shop. They have much a better data warehouse and far more sophisticated sales forecasting and other IT systems. However, that is all pointless if they keep screwing up the menu.

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