Wendy’s CEO Admits Chain Didn’t Prioritize Food Quality

Key Facts

Wright, who took over as CEO in May, told the Wall Street Journal that Wendy’s has prioritized cost savings over ingredient quality and leaned too hard on discounts—moves he said are the reason it lost its No. 2 rank among the biggest burger chains in terms of U.S. sales to Burger King (McDonald’s is No. 1).

He acknowledged the chain has become “over-reliant on promotional activity” and said he plans to shift focus back to the core menu, because “that’s where you deliver intrinsic value for the customer.”

Wright used the interview to roll out what he says is a five-point plan to regain its ranking, targeting food quality, value, operations, store upgrades and digital sales, with Wright saying the menu must be rebuilt “at the ingredient level, at the item level, at the menu-category level.”

The new plan comes as reports indicate Peltz, through his firm Trian Fund Management, is preparing a bid to take The Wendy’s Company private.

Wendy’s has lost more than half of its market value in the last two years, down from a high of around $20 per share in April of 2024 to under $9 on Monday.

Key background

Wendy’s has been losing ground for more than a decade to rivals that invested heavily in its food offerings. Burger King clawed its way back to the No. 2 U.S. burger-chain spot by overhauling its Whopper and renovating locations through a $700 million turnaround plan that utilized a product-first playbook Wendy’s moved away from in favor of deals and cost discipline. Wright’s new strategy includes re-making the brand’s leadership team, and he said a former McDonald’s executive has been hired in the newly created role of chief marketing and customer growth officer.

TANGENT

The turnaround effort runs alongside a separate pressure point: Peltz. Trian Fund Management, a long-standing Wendy’s shareholder with board seats, has been in talks with potential investors about strategic options, including a possible take-private of the company. Peltz first told the Securities and Exchange Commission in February he was evaluating ways to enhance shareholder value, including a plan to have Trian take “control of the company,” and said he thinks its stock, which has fallen significantly over the last year, is undervalued. The potential coalition would be led by Trian, which already owns a 16% stake, and is expected to include Flynn Group, one of Wendy’s largest franchisees, and Abu Dhabi-based BlueFive Capital, according to the Financial Times.

SURPRISING FACT

It was only a few weeks ago that Wendy’s officially fell to Burger King in the ranking of chains in the U.S. by systemwide sales. Wendy’s held the spot for six years but after reporting a 7% slip in domestic same-store sales a few weeks ago, it fell to No. 3. Burger King reported U.S. same-store sales growth of 8.5% in the second quarter.