Wendy’s has faced its share of traffic setbacks in 2025, as many have in the category. Its U.S. same-store sales declined 3.6 percent in Q2 and were sliding between 5–6 percent in July as Q3 got underway. The brand credited its misjudgment of consumer trends and a 100 Days of Summer effort that proved overly complex.

Interim CEO Ken Cook, who elevated to the role last month following the departure of Kirk Tanner to Hershey, said Wendy’s expected better patterns in 2025 and, in turn, responded with a programming lineup built to take advantage. Poor weather and weak spending, however, led to March being “the biggest decline in consumer sentiment in recent history,” Cook said in Q2. Frosty sales were up 30 percent, year-over-year, but other offers, like the $3 Baconator and $1 drink at breakfast, didn’t drive incremental sales as Wendy’s hoped, and a Takis collaboration started off strong before tailing. It proved more a trial than frequency play.

Wendy’s responded by simplifying its marketing calendar and stopping some broad $1 promotions. In the back half of the year, it will shift to more targeted app discounting. Largely, expect Wendy’s to drive news around chicken and beverages.

But amid redirects and executive changes (Pete Suerken also replaced long-time leader Abigail Pringle as U.S. president in July), growth has been a developing blueprint for Wendy’s stretching back to last year. And there are a few pieces to it.

The brand in late 2024 informed investors it was going to slim its portfolio and shed lower-performing units in hopes of lifting systemwide average-unit volumes. That led to net closures of 78 in Q4 and 97 across the fiscal year to close with 5,933 U.S. stores compared to 6,030 in the prior year. Globally (international increased from 1,210 to 1,307), Wendy’s was flat—entering 2024 with 7,240 restaurants and leaving at the same figure.

A photo of Wendy's FreshAI at the drive-thru.

Wendy’s automated voice ordering system at the drive-thru has driven sales in early tests with relevant recommendations.

Wendy’s painted this move as one intended to set up future expansion. These openings were expected, in some cases, to push twice the volume of closing units. Outdated restaurants, management explained, were averaging $1.1 million per store compared to the larger average of $2.1 million. They were also generating operating margins well below Wendy’s mean.

The chain put 2–3 percent global systemwide sales growth on its 2025 projection and net unit expansion between the same range. If so, Wendy’s would report its most restaurant builds in the last 15 years. The company noted it could envision “another couple thousand” domestic locations.

Wendy’s added it would invest about $70 million through its “build-to-suit” program that tries to minimize financial barriers by offering support through startup phases, including site selection and construction. For new and existing operators, Wendy’s said build-to-suit fuels faster development and enables operators to focus on running stores versus some of the collateral that accompanies growth.

Broadly, operators are supposed to see a levered return in about three-and-half years. Without incentives, it’s closer to six for Wendy’s. In plain terms, the company co-invests in new restaurants with franchisees in exchange for higher royalty and rent payments—a point geared toward expanding the pool of franchisees to build from within.

At Wendy’s investor day in March, Tanner outlined a road to 1,000 net new Wendy’s globally by 2028, placing it at 8,100–8,300. This figures a long-term view of 3–4 percent new unit growth. From 2025 to 2028, Wendy’s wants to tack on 700 net new international locations or an 11 percent net growth CAGR as well. Canada, which has 438 stores (one restaurant for every 80,000 Canadians), about $1 billion in revenue, and a fully integrated supply chain across the country, leads the map. But by 2028, Wendy’s projects to add 300 locations in Asia Pacific and the Middle East, 150 in Europe, 125 in Latin America, and 125 in Canada.

A closer, stateside target for Wendy’s is to grow by a net of 300 domestic stores through 2028 (30 percent of the global plan). The chain said there is currently one location for every 56,000 Americans. It suggested McDonald’s was closer to every 36,000.

Wendy’s Next Gen model is tech forward, including kiosks.

And alongside incentives, Wendy’s wants to dot the map with Global Next Gen builds (part of the premise behind accelerating underperforming closures). Nearly 300 of these have opened in the past two years. It’s a digital-first prototype with dedicated lanes and windows for delivery and mobile orders and an energy-efficient model that reduces use by an estimated 10 percent. It also offers flexibility in real estate selection; Wendy’s can open new restaurants on plots as small as a quarter of an acre. Redesigned kitchens equipped with productivity upgrades contribute to operational efficiency, too, leading to higher profitability and shorter payback periods, the company said.

Digital advances range from self-order kiosks to digital menuboards to FreshAI in U.S. drive-thrus. The latter, Wendy’s said, is the industry’s first generative-AI powered drive-thru assistant. Launched in 2023 through an expanded partnership with Google Cloud, first at four corporate Ohio units and then to 30 stores across two states, the technology was in about 100 locations las February, with goals to reach 500–600 in 2025. Wendy’s said the voice-enabled AI was improving accuracy and driving labor efficiency. Once proven at 500, the company added, it can begin making a bigger case.

Wendy’s in Q2 said the platform was getting smarter and improving drive-thru experience with unique menu recommendations for orders, taking into account factors such as seasonality and popular items in the area. It’s one of the reasons same-store sales at company-operated locations outpaced the U.S. system (a 300-basis-point gap to negative 0.7 percent).

Management noted it’s begun using market analysis tools to find low-performing restaurants and swap them with high-potential restaurants (potentially with the AI). The overall closure number could stretch as high as 140.

Wendy’s said roughly 80 percent of its largest franchisees are engaged in new development plans. Also, it expects to double the net growth of company-operated locations to “serve as a role model for its operational standards, expansion playbook, and the benefits of the Global Next Gen design.” Wendy’s closed 2024 with 381 company-run stores, down 22, year-over-year after being flat the previous two calendars. Per Wendy’s recent FDD, however, 11 company store openings are slated for 2025, including five in Florida, three in its homebase of Ohio, and single stores in Colorado, Illinois, and Rhode Island.

The company will spend an average of $115 million on annual CapEx between 2025–2028 to achieve these ambitions—50 percent on development, 30 percent on digital capabilities, and 20 percent elsewhere.

Regarding more recent results, Wendy’s opened 44 new stores globally in Q2, including 21 in the U.S. and 23 international across 14 countries. During the quarter, it signed fresh agreements to build 190 restaurants outside the U.S.—170 in Italy over the next 10 years and 20 in Armenia over the next five and finished Q2 with 5,967 U.S. stores and 1,367 international outlets. Wendy’s wants to have 2,000 international stores by 2028.

Wendy’s on Wednesday provided a first-half look, which included opening 118 stores globally. Even despite recent sales challenges, it reiterated guidance on the company’s Q2 earnings call to increase global units by 2–3 percent in 2025 while building a larger pipeline.

“The progress we’ve made halfway through 2025 is only possible with the dedication of our franchisees and restaurant teams. Our mutual pursuit of excellence fuels our growth and the powerful partnerships we continue to build. As we welcome new franchisees who align with our vision, our focus remains the same: providing our fresh, famous food to local communities and fostering meaningful connections within them,” Tatiana Lambert, vice president, U.S. CDO, said in a release.

In the U.S., 15 states saw new openings from March 31 to June 29 as 21 stores hit markets.

Getting deeper into this store movement, Wendy’s domestic base grew by 56 and 36 locations net in 2022 and 2023, respectively, before sliding back 97 in 2024. The chain was No. 5 on this year’s QSR 50 at $12.554 billion in U.S. systemwide sales and average-unit volumes of $2.098 million. With burgers, Wendy’s was ahead of Burger King ($10.98 billon and $1.639 AUV on retraction of 77 stores) and distant to McDonald’s ($53.469 billion, $4.002 million AUVs, and growth of 102, year-over-year). Full burger breakdown here.

U.S. growth last year included 102 openings, three terminations, and 174 that ceased for “other reasons.” Again, as noted, this final figure was a significant elevation as Wendy’s worked to optimize: it was 56 in 2023 and 35 a year earlier.

Wendy’s FDD also revealed there are 167 projected new franchised outlets for 2025, and 25 agreements signed without an outlet opened (numbers not inclusive of closures).

Unpacking performance, here’s a look at company versus franchise sales last year:

And for non-traditional franchises. “Transportation” includes airports, train stations, bus stations, and ferry stations. Last year, most “transportation” sites were airports. “Fuel” covers gas/c-store combinations, highway service plazas, and travel centers/truck stops, some of which support a traditional menu and drive-thru. “Food Courts” span hospitals, malls, and universities/colleges. “Military” is inclusive of restaurants at military bases.

By market type:

And further on the new builds. This chart reflects average weekly gross sales since inception for traditional franchises opened in 2023 and 2024.

This looks at traditional company units open and operating continuously for at least 52 weeks as of December 29:

Lastly, Wendy’s showed ROI for franchise growth:

The investment to begin operation of a Wendy’s Restaurant varies depending upon whether the property is purchased for cash, financed or leased, as well as other factors, but, excluding real estate, normally ranges from $1.523.957 million to $2.992 million (excluding real property costs).

SOURCE: QSR Magazine