Arby’s owner buying Wendy’s in all-stock deal

Wendy’s also has failed to connect with consumers in several advertising campaigns that have been tried since Thomas’ death in 2002 and it has limited success in adding new products and with its breakfast menu. Thomas, always wearing a white short-sleeved shirt and red tie, became a household face when he began pitching his burgers and fries in television commercials in 1989.

“It’s a company that’s sort of lost its way,” said Bob Goldin, executive vice president of Technomic Inc. in Chicago.

Still, even with a slumping economy in which other restaurant chains have seen sales decline recently, there is value, analysts say.

“We’ve always felt Wendy’s had a decent chance of a turnaround in its business,” said John Owens, an investment analyst with Morningstar, citing its new chicken wrap sandwich and the addition of breakfast at many restaurants.

Improved cost controls over food, labor and other expenses should generate $100 million a year in operating profits over time, Triarc said in the statement announcing the deal.

Eliminating duplicate corporate functions and streamlining support services are expected to eventually save $60 million, said Triarc, which operates 3,700 Arby’s restaurants.

Triarc also said expansions for both brands are planned for the U.S. and overseas and that the company will look at a dual-concept unit in high-cost real estate markets. Triarc said it will also change its name to include the Wendy’s name.

Wendy’s deferred comment to Triac, which had nothing further to say right away.

Several lunchtime customers at a Wendy’s in Columbus wondered how Thomas would have reacted to the news, were he still alive.

“I think he’s probably rolling over in his grave right now,” said John Knape, 36. “But it’s business, and that’s what you need to do to survive, right?”

The deal caps two chaotic years for Wendy’s in which it has sold or spun off operations, slashed its corporate staff and had its wholesome image tarnished by a woman who falsely claimed she found part of a finger in her chili.

Farber said the family didn’t think much of Peltz’ and Triarc’s tactics.

“They came after them (Wendy’s) and came after them and came after them. They spun Tim Hortons off, they did this, they did that. They did everything they asked but it wasn’t enough.”

Thomas opened his first restaurant in a former steakhouse on a cold, snowy Saturday in downtown Columbus on Nov. 15, 1969. He named the chain after his 8-year-old daughter Melinda Lou — nicknamed Wendy by her siblings.

Wendy’s, based in suburban Dublin, operates about 6,600 restaurants in the United States and abroad. It trails McDonald’s and Burger King Holdings Inc. in the burger business.

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