Big burger chains continually compete to be the most preferred fast food restaurant among consumers and investors. In recent years, McDonalds and Burger King have been the biggest competitors in the fast food industry, but Wendy’s – a once well established fast food chain that has gradually reestablished itself through a combination of menu changes, new advertising campaigns, and real estate upgrades – is poised to make the burger war a three-way fight.
STOCK OF THE YEAR
Wendy’s recently gained valuable publicity when it was announced as Yahoo Finance’s Stock of the Year. Though the value of a corporation’s stock is typically less stable than the value of the investment real estate that its franchises occupy, what makes Wendy’s attractive to stock brokers also makes it attractive to real estate investment gurus. The following things that make the chain a solid investment in terms of stock and real estate are factual, not speculative.
MENU CHANGES
In the past year, Wendy’s did what few burger chains have done outside of creating healthier sandwiches: change the breading on signature menu items. In 2013, new on Wendy’s menu were a bacon cheeseburger on a pretzel bun, a chicken sandwich on the same bun, and various sandwiches on brioche rolls and flatbreads. The restaurant even began serving its classic Frosty beverage in an optional waffle cone. These menu changes grabbed consumers’ attention.
NEW ADVERTISING
When its founder, Dave Thomas, was still alive, Wendy’s had a figurehead who made its commercials distinctive. Consumers liked Dave Thomas’ personality, and when died in 2002, Wendy’s commercials weren’t the same without him. Today, Wendy’s has rebranded its commercials around “Wendy’s Girl” Morgan Smith Goodwin. As with Dave Thomas, when Goodwin appears on the TV screen, you instantly know you’re watching a Wendy’s commercial.
REAL ESTATE UPGRADES
Like many burger chains, Wendy’s is remodeling its franchises to change their greasy spoon atmosphere to a casual cafe environment. In terms of real estate investing, the remodeling effort has two pluses: it gives the franchises a much-needed facelift, and the facelift results in old materials being replaced. Commercial properties that have are remodeled often have lower maintenance and utility expenses, which gives the tenant more net operating income.
THE FUTURE OF WENDY’S
Like many fast food chains, Wendy’s experienced sluggish same-store sales for several months in 2013. However, the chain’s commitment to new menu items helped boost its sales near the end of the year and figure to have it entering 2014 on a high note. If you are looking to make a solid investment in real estate to kick off the New Year, be sure to contact Westwood Net Lease Advisors about Wendy’s properties that are available in the areas you are interested in investing.
