Monday, April 09, 2007

What would Dave say?

You wouldn’t tell Lance Armstrong how to ride a bike, or second-guess Warren Buffett’s stock picks. It’d be like telling Barry Bonds how to alienate people. So when Dave Thomas says unequivocally that the addition of even a second frozen drink choice would hurt the Wendy’s quick-service chain by complicating operations, you tend to heed it, even if Dave himself is no longer with us. And yet that’s not what the hamburger chain is doing, as reported Friday. A vanilla version of the brand’s ultra-thick Frosty treat was added to the menu several months ago, and a Frosty Float—a chocolate or vanilla version mixed with soda—was introduced last week. That means four variations are now available, and new coffee-based choices are widely reported to be under development. The chain’s reverence for its founder is evident to anyone who’s had any dealings with the people from headquarters. But in this case, Dave’s words are not being heeded. You have to admire the system’s current leadership for having the courage to do what’s right, even if their gospel says otherwise.

Beverages are the new means of differentiation for the quick-service chains, while continuing to be a huge profit generator. Wendy’s couldn’t afford to sit on the sidelines and watch Burger King, McDonald’s and Jack in the Box give consumers another reason to visit their stores instead of the Place Dave Built. The Frosty is unique; why not parlay that product of distinction into a whole signature line? It makes sense, as Dave would likely agree if he were still with us. Sure, he was convinced that diversifying beyond a lone chocolate-flavored Frosty would be a problem. But that was awhile ago, before the market evolved to what it is today.

But breakfast—well, that’s another story altogether. Because of the chain’s past, tinkering with the morning meal would be like Bill Clinton hiring a few interns. I was covering Wendy’s for Nation’s Restaurant News when it rolled out its first a.m. menu, a collection of omelettes that would have been difficult to deliver within an acceptable timeframe for a sit-down place. Because of the operational issues, it proved a disaster, throwing the chain into a wobble that took years to correct. I can still remember the anger and pain of franchisees, how they felt the home office had forsaken its religion in a lunge for the newfound business that McDonald’s, Hardee’s and Carl’s were snagging with their grab-and-go morning offerings. The problem wasn’t marketing or communications, but operations, plain and simple.

That’s why it was chilling to read Wendy’s announcements last year that it was testing breakfast while already weaving a rollout into its turnaround strategy. The addition of breakfast was a certainty, not a possibility that would be validated or scuttled as a result of the testing. The introduction was a given; the only matter up in the air was how to get there. To quote the great Yogi Berra, it was déjà vu all over again.

Breakfast could supercharge sales for the chain, and there’s no reason it would have to be an operational quagmire. But it would certainly pose more of a risk than the mere addition of a vanilla Frosty to the chain’s one-flavor-fits-all shake line. You just have to hope, for the sake of franchisees and shareholders alike, that Dave’s caution is more of a factor in that endeavor.

No comments:

Post a Comment