• Investment Required
• Investment Level: $ 125 K
• Training and Support: Yes

Whether this represents a long-term policy or recent market adjustment is of great concern to current and prospective Wendy's franchise customers.  Some see it as a prelude to the business being sold to another vendor, with the most likely candidate being Yum Foods, a division of Pepsi Cola, and the corporate parent of Taco Bell, Kentucky Fried Chicken and Pizza Hut; by boosting per store profits, and efforts on supporting existing franchises, rather than expansion, this would make Wendy's more appealing to a merger partner.

One sign that this may not be the case is that Wendy's isn't dramatically increasing the number of corporate owned stores; they're focusing on picking up stores in regions that are underperforming and bringing them back up to par.  This is a hopeful sign for future Wendy's franchise buyers, as it means that when Wendy's recovers from the current down credit market, franchise opportunities will likely open again.

Wendy's historical support for future franchise holders has ranged from sub par to superb, depending on how its corporate governance is run. It falls behind the franchise support offered to Quiznos, or the multi-branding and heavy advertising push that Yum Foods mobilizes in support of its brands, but does meet the basic requirements.

Wendy's market differentiation, when compared to other franchises in its menu space is strong, but the "basic hamburger" model is a crowded retail space, and future expansion and growth of Wendy's franchise business opportunities will be dependent upon carving market niche space out for itself.  That's not impossible, as Carl's Jr./Hardee's has shown, which has differentiated itself on being a "high end" burger joint, without becoming a labor intensive sit-down restaurant.  It's not as clear if Wendy's is going to go for this direction, but it's clear that selling in the "commodity burger" industry is causing the company to reconsider its growth plans.

Just because Wendy's isn't granting new franchises doesn't mean they can't be acquired; buying existing franchises is not unheard of.  When considering this as an avenue towards becoming a Wendy's franchise holder, look at demographics, and likely demographic trends.  If a franchise is being sold, it's very likely underperforming, or a victim of demographic shifts, or poor support from its franchising parent, and due diligence will be required to turn it around.

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