The Wendy’s Co.’s next franchise operator to purchase a group of restaurants comes from within its corporate office: senior vice president of North America operations John Peters.
Peters has formed a partnership with longtime Wendy’s franchisee Rick Holland, and together the two have agreed to purchase 38 company-operated Wendy’s locations in the Phoenix market. In addition, Peters will oversee operations for the 73 current restaurants Holland owns in Arizona, Colorado, Michigan, South Dakota and Ohio.
As part of the shakeup following Peters’ career switch, former Wendy’s executive Bob Wright will return to become chief operating officer in the first quarter of 2014. He will work with Peters during a transition period.
With this latest refranchising move, Dublin, Ohio-based Wendy’s nearly reaches the halfway point of its “system optimization” initiative announced after the brand reported second-quarter earnings in July. The plan included a goal of refranchising 425 units. To date, the company has sold or agreed to sell 210 total restaurants to franchisees.
Wendy’s president and chief executive Emil Brolick noted in a statement that the refranchising initiative, which is on pace to be completed by its deadline of the close of the second quarter of 2014, is meant to bolster the brand’s operating margin and free cash flow, as well as provide a more predictable revenue stream from higher royalty and rent payments.
“This transaction with John Peters will ensure that an important market, Phoenix, will be led by a superb operator and an experienced veteran of the Wendy’s system,” Brolick said.
Peters has worked for Wendy’s for more than 30 years. “We are driving this brand toward a great future,” he said in a statement. “We have a strong product pipeline, the best marketing awareness since the Dave Thomas campaign, a powerful way to connect with consumers through [remodeled] Image Activated facilities, and our restaurant operations continue to improve.”
His replacement, Wright, was most recently president, chief operating officer and interim CEO of Columbus, Ohio-based Charley’s Grilled Subs, a chain of more than 500 restaurants in 47 states. He also served as executive vice president of company and franchise operations for Tampa, Fla.-based Checkers Drive-In Restaurants, following his first stint with Wendy’s, when he held several roles including vice president of operations and training integration.
“We are thrilled about Bob returning to Wendy’s,” Brolick said. “He’s a tremendous leader, has extensive restaurant operating knowledge and possesses valuable Wendy’s brand experience. He will focus on further improvement in delivering the brand promise for customers in all of our North American restaurants, and he will champion our ‘People Activation’ initiative to create ‘A Cut Above’ experience in our restaurants.”
The refranchising program has included several sales of large territories to high-profile franchisees, including the Nov. 20 sale of 54 locations in the Salt Lake City market to a subsidiary of NPC International. NPC kicked off the whole effort with the purchase of 24 restaurants in the Kansas City, Mo., market in June.
Peters and Holland’s partnership is similar to the deal struck in August between longtime Wendy’s franchisee Junior Bridgeman and Detroit Pistons point guard Chauncey Billups to acquire 30 locations in the St. Louis market under a new venture, BB St. Louis Inc.
Wendy’s also sold 24 restaurants in Seattle to longtime franchisee Cedar Enterprises in October. The company said a total of 40 restaurants have been sold to eight franchisees in other markets.
Wendy’s operates or franchises more than 6,500 restaurants in the United States and 28 foreign markets.
Contact Mark Brandau at [email protected].
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