ATLANTA Wendy's/Arby's Group Inc. said Tuesday it had signed a deal with a Saudi Arabian franchisee to open the company's first dual-branded restaurants, a strategy that officials said would be an important part of international growth and may be tested in some U.S. markets.
The agreement with Al Jammaz Group calls for the opening of 135 co-branded Wendy's and Arby's units over the next 10 years in nine countries in the Middle East and North Africa. A subsidiary of the company, Specialized Catering Services Est. of Dubai, will build the first co-branded unit in Saudi Arabia early next year. Al Jammaz Group currently operates more than 200 stores of various franchised brands in the region.
“We are pleased to enter into a franchise relationship with Al Jammaz, a company that has the proven leadership, resources and foodservice experience to grow our two quality brands throughout the Middle East and North Africa,” said Roland Smith, president and chief executive of Wendy’s/Arby’s Group. “We believe dual-branded restaurants will generate higher sales volumes and better return on investment, making this approach particularly compelling to our international franchisees.”
Wendy’s/Arby’s spokesman Bob Bertini said there are no dual-branded units in the United States, but that the strategy is one of several the company may test in early 2010.
“We are targeting the test — and I stress the word 'test' — of dual branding in the United States in 2010,” Bertini said. “We see it as a longer-term opportunity in the U.S., particularly in markets with high real estate costs.”
Bertini added that an international growth strategy focused on dual branding was not a test run of the tactic’s viability in the United States.
“We see dual branding as a way to move forward internationally,” he said. “Right now the vast majority of our international units are Wendy’s restaurants. Those operators will continue to develop Wendy’s units under their current agreements. We’ll introduce Arby’s with dual branding where it makes sense.”
Wendy's/Arby's Group Inc. was formed last September when Wendy's International Inc. merged with Arby's parent company, Triarc Cos. Inc. Between the two brands, Wendy’s/Arby’s Group operates or franchises more than 10,000 restaurants in the United States and 24 foreign countries and territories.
Contact Mark Brandau at [email protected].