Wendy’s Is Not Doing So Well: Revenue Falls as Chain Continues to Sell Restaurants

Wendy’s revenue continues to fall as it sells more restaurants to franchisees

Like many big fast food chains, Wendy’s is struggling.

As Wendy’s continues to lighten its load by selling off restaurants, the fast food chain is experiencing a dip in revenue.According to The Wall Street Journal, Wendy’s is following in the footsteps of brands like McDonald’s and Burger King: by selling more restaurants to franchisees, there would ostensibly be a more stable cash flow. As a result of this adjustment, revenue has fallen 3.2 percent, to $489.5 million.

Wendy’s has said that by 2017, the corporation will only directly own five percent of its total branded restaurants. That means that 95 percent of Wendy’s cash flow will come from franchisee royalties and rental fees, as opposed to direct consumer profits.

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According to Wendy’s CEO Emil Brolick, this new shift in franchisee ownership is a result of the $15 minimum wage increases across the country, which have created a “war on talent.” Fast food franchisees have been forced to raise wages, which cuts hours and jobs, according to Brolick.