WEN: STORIED WENDY’S FAMILY SELLING OUT

There may be one other restaurant analyst covering Wendy’s that attended an analyst meeting held by the late Jim Near. 

 

Background

 

Mr. Near worked at Wendy’s for twenty-one years and was appointed COO by the founder of Wendy’s, Dave Thomas, in 1986 to help turn the then-ailing restaurant chain around.  At that point, the restaurant was suffering from failed attempts to launch breakfast as well as declining morale within the Wendy’s system.  In 1989, Near was named CEO of Wendy’s and the legacy of his six-year tenure was encouraging Dave Thomas to become the face of the company; advertisements featuring Thomas became highly successful.  Near and Thomas died in 1996 and 2002, respectively, and the company has struggled to replace the considerable impact they both had, individually, on the business.

 

 

Getting Out

 

On June 11, 2012, Wendy’s International, Inc. completed the purchase of 30 Wendy’s restaurants in the Austin, Texas area from David and Jason Near, two sons of Jim Near, for $19.8 million in cash.  Wendy’s International agreed to lease the real estate, buildings and improvements related to 23 of the acquired restaurants from the Sellers and to assume the leasehold interests in the real estate, buildings and improvements related to the other 7 acquired restaurants.

 

The Near family has been involved with Wendy’s since 1974 when Jim Near purchased his first Wendy’s franchise.  There could be numerous reasons why the family is selling but we believe that it could be a sign of the times given the family’s deep ties to the chain.  Beyond Jim Near’s intimate involvement in the evolution of the company, his son David Near was named as Chief Operations Officer of the Wendy’s brand in 2006 by then-CEO and President Kerrii Anderson.

 

 

Conclusion

 

Part of the Wendy’s turnaround efforts will be centered on the company buying back stores from underperforming franchisees who cannot afford to carry out the reimaging program.  We see it as a possible negative that one of the most significant families in the company’s history is selling out.  It’s certainly a headline that the folks in Dublin would like to have avoided.

 

 

Howard Penney

Managing Director

 

Rory Green

Analyst


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