What if closing a part of your business could make you more profitable? That’s exactly what Wendy’s is betting on by closing 140 underperforming locations despite a simultaneous expansion into high-growth areas. This strategy follows a wave of similar closures earlier this year as Wendy’s moves toward “quality over quantity” to protect its brand and boost profits. For small business owners, Wendy’s strategic moves offer actionable lessons on resource optimization, customer experience, and sustainable growth.
Below, we explore how Wendy’s story can inspire your business strategy, helping you make impactful changes that drive profitability and long-term growth.
1. Identify and Let Go of Underperforming Areas
Wendy’s closures aren’t a sign of weakness but rather a strategic choice to focus resources where they yield the highest return. According to CEO Kirk Tanner, each location underwent a “robust review” process, assessing performance metrics and aligning with the company’s long-term vision.
Takeaway for Small Business Owners: Regularly evaluate each part of your business—products, services, or even locations—to see what may be draining resources without enough return. For example, a product line that consistently underperforms could take up resources that would yield higher value elsewhere. Freeing up these resources can allow you to focus on areas that drive growth, increasing profitability and brand strength.
2. Reinvest in Areas of High Potential
While Wendy’s is closing outdated locations, it’s opening new ones in higher-growth areas. Each new store comes with advanced technology, extra pick-up windows, and a streamlined layout to serve modern customers better. This reinvestment is expected to maximize revenue in high-potential markets.
Takeaway: Which parts of your business consistently yield the best returns? These areas deserve priority when it comes to reinvestment. For instance, double down if you have a particular service that resonates with customers or a consistently profitable product line. Consider adding additional marketing or operational resources to amplify what’s already working.
3. Upgrade Customer Experience Where It Matters Most
Wendy’s new store design aligns with customer expectations for convenience, speed, and quality. In the competitive fast-food market, meeting customer needs efficiently and effectively is key. Wendy’s enhances customer experience in high-traffic locations to foster loyalty and repeat business.
Takeaway: Customer experience can set your business apart. Look for ways to improve the experience where it has the most significant impact, like enhancing your website’s usability, updating store layouts, or offering a more streamlined service. Studies show that businesses with excellent customer experience outperform competitors by 4-8% in revenue growth. Minor improvements can add up, creating customer loyalty and driving repeat business.
4. Make Data-Driven Decisions, Not Emotional Ones
Wendy’s decision to close some locations and open others was based on clear performance metrics, not emotion. By analyzing key data points like profitability, foot traffic, and local trends, Wendy’s made objective decisions that support its long-term success.
Takeaway: As a small business owner, it’s natural to feel attached to certain products or services. But letting data guide your decisions can bring clarity. Customer surveys, reviews, and revenue trends can reveal which aspects of your business deserve the most attention. According to McKinsey & Company, data-driven companies are 23 times more likely to outperform competitors in customer acquisition. Use data to ensure your resources are focused on high-return areas, helping your business grow strategically.
5. Stay Flexible to Market Changes
In a shifting market, Wendy’s demonstrated flexibility by adapting its strategy and refocusing on profitable locations while closing those that no longer serve its goals. This adaptability allows Wendy’s to remain relevant to its customers while maximizing efficiency.
Takeaway: Flexibility is a powerful asset in business. When customer preferences or market conditions change, pivoting is crucial. Could experimenting with a new approach to services, pricing, or even packaging create more interest or profitability? Being open to changes allows you to take advantage of new opportunities in your market.
6. Engage Customers by Aligning with Trends and Preferences
Wendy’s recent SpongeBob-themed meal, which quickly engaged customers, shows the value of strategic, on-trend promotions. This limited-time offer attracted new customers and strengthened Wendy’s brand connection with existing fans.
Takeaway: Pay attention to what your customers are excited about. For example, can a seasonal product, nostalgic offering, or a limited-time package appeal to your audience? Data shows that 67% of consumers say they’re more likely to purchase when brands are “in touch” with their interests. Even a small promotion based on customer trends can spark interest, boost loyalty, and increase sales.
7. Focus on Quality Over Quantity
Wendy’s ultimate shift focuses less on the number of locations and more on the quality of each one. This “quality over quantity” approach is a smart strategy for long-term sustainability, building a brand that’s not just everywhere but memorable wherever it is.
Takeaway: Bigger isn’t always better. Rather than stretching resources to expand, focus on elevating the quality of what you already offer. Whether refining a service, investing in a critical location, or enhancing your product’s quality, emphasizing excellence can build brand loyalty and increase profitability.
Final Thoughts and Call to Action
Wendy’s recent strategy shift offers powerful lessons for small businesses that want to stay competitive and profitable. From redistributing resources to making data-driven decisions, these insights can help you position your business for sustainable growth.
Are you ready to explore how these principles can apply to your business? At Slark Consulting Group, we specialize in helping small business owners leverage data, optimize resources, and create customized growth strategies. With our expertise in small business strategy, we can help you identify high-impact areas, streamline operations, and make decisions that support your goals.
Contact Slark Consulting Group to schedule a consultation and start building a strategy that positions your business for long-term success. Plus, if you’d like more informative content like this, subscribe to receive expert insights straight to your inbox.