Franchisees Issue Letter of Dissatisfaction to Wendy's

Sixteen franchise owners who own more than 1,100 Wendy's restaurants or about 24 percent of U.S. franchises, accused the board and senior executives of not heeding franchisees about the sale of the company and improving poor performance.

Carolyn Walkup of the Nation's Restaurant News (registration required) reports that franchise owners wrote a scathing letter on September 8 to Wendy's chairman James Pickett and other board directors.

"Franchisees faulted Wendy’s management for allegedly inadequate product or operational testing and downsizings of items and portions despite the operators’ prior objections. The allegations, including that the franchisor had made incomplete or inaccurate communications that could have been “intentional or simply due to gross neglect or sloppiness.”

"The dissidents claimed that franchisees had been left out of decisions being made by a special committee of directors that is to recommend a strategic direction that could include a sale of Wendy’s."

On Sept. 18 The Wall Street Journal ($$ subscription needed) revealed that a dozen bidders had indeed been pursuing acquisition of Wendy's.

"The franchisees, whose outlets are in various parts of the country, emphasized that the board’s strategic decisions about the company’s fate would have “enormous consequences” for operators, and said that the board “may well reap a very public renunciation long before any sale can be concluded” if it chooses “to ignore the input of the bulk of the franchise community.”

"...The franchisees also urged that the basic pricing structure of the chain’s Super Value Menu not be changed, and they requested that the company not enter into any long-term buying contracts."

Franchisees have expressed that these issues severely impact the value of their restaurants. They fault the company for not listening to the owner-operators on strategic issues.