Wendy's unveils "Dave's Way" plan and rejects $1.4 billion takeover offer

Wendy's reported a seventh straight quarter of declining same-store sales, with U.S. locations down 5.7% in the third quarter ending Sept. 27, lagging rivals such as McDonald’s and Burger King. The fast-food chain said it will pursue a multi-year turnaround plan called “Dave’s Way,” named after founder Dave Thomas, that aims to improve food quality, expand delivery and boost marketing.

"Our objective is clear: grow customer traffic and market share while strengthening restaurant profitability," CEO Bob Wright said on Thursday.

The board also announced that it unanimously rejected a $1.4 billion offer from a group of investors, including former chairman Nelson Peltz, stating the proposal undervalues the company. Board chair Art Winkleblack added, "Our confidence rests firmly in Bob Wright’s proven track record of seasoned industry leadership, including restaurant business turnarounds."

Under the new plan, Wendy's will roll out a fully refreshed menu by 2027, featuring thicker bacon, larger lettuce pieces, creamier Frostys and upgraded salads. Wright said lower-volume items that add kitchen complexity will be removed, and breakfast, launched in 2020, will become optional for franchisees, with some locations already seeing better performance after dropping it.

The chain has closed nearly 300 underperforming restaurants in the United States, marking a second wave of closures in two years. Wright, who became CEO in May after a year-long leadership gap, previously led sandwich chain Potbelly and was hired to address six consecutive quarters of same-store sales decline. He has warned that the brand’s value proposition has slipped and franchisee economics are under pressure.

Wendy's also disclosed plans to acquire up to 163 locations from major franchisee Meritage Hospitality Group, which cited the chain’s sales slump as a factor in its own bankruptcy filing.