Thursday, October 18, 2007

Maybe Bobby Bacala would do

Wendy’s best hope may not be Nelson Peltz, Bill Foley or a nameless twentsomething in a pigtailed wig. If the company wants to avoid a pitched two-front war with investors and franchisees, the person it really needs is Paulie Walnuts.

As any Sopranos fan knows, Paulie has his issues, like occasionally beating people into hamburger. But he was also the go-between when warring parties wanted a sit-down. Too bad the folks at Wendy’s apparently weren’t HBO subscribers, because they’ve been focused on sending messages instead of sharing some grappa in the backroom of the Badda Bing. Franchisees are clearly squaring off with the home office, if they’re not looking to buy the company and impose their own strategy. And how’s Wendy’s coping? By sending letters, like the feel-good click here it dispatched to licensees and employees yesterday.

In fairness, it should be noted that headquarters has instituted monthly webcasts with franchisees and employees to keep the whole system apprised of chain activities. CEO Kerrii Anderson also indicated in her letter that enhancements have been made to WeNet, presumably the chain’s intranet.

But neither of those media is face-to-face. Indeed, they tend to be used for one-sided disseminations than a true give-and-take.

What seems to be needed is a war council, where the parties can sit down and work out their differences in the spirit of Dave Thomas. Instead, franchisees and the home office have been using postmen as their proxies, sending letters back and forth. A dozen licensees sent a scathing one to Wendy’s home camp a few months ago, blasting management for lowering the value of their business. The executives denied it, and followed up with yesterday’s assertion that the turnaround is going well.

Does this sound like a system that’s talking?

In her letter, Anderson also noted that meetings were held in August with franchisees specifically to discuss plans for 2008. Why, then, was yesterday’s communication even necessary? Might it have been more of a defense than an explanation of what the home office has chosen to do?

Interestingly, in ticking off Wendy’s achievements during the last year, Anderson cites “enhanced communications” as an accomplishment on par with improving operations or bolstering sales and profits. Clearly the management team felt the need for an upgrade. You have to wonder if executives and franchisees still do, and if both sides are doing their part to ease tensions through conversation.

“We’ve made significant progress in the last 12 months,” Anderson told franchisees and employees. But “we have so much more to accomplish.”

Perhaps maintaining peace with franchisees through a true disarmament sit-down should be item No. 11 on her to-do list. With that problem allayed, the whole system could address the larger issue of bolstering finances, which might even make Nelson Peltz smile.

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