Wendy’s Arrives in Singapore

Wendy’s/Arby’s Group Inc. (WEN - Analyst Report), one of the leading quick-service restaurant companies, announced the opening of its first franchise restaurant in Singapore. The restaurant was opened in Lau Pa Sat Festival Market.
 
The company plans to open 35 Wendy’s restaurants in Singapore over the next decade. These restaurants will be opened by the Kopitiam Group, the largest food service management company in Singapore. The company signed the franchise agreement with the Group in May 2009.
 
The opening of restaurants in Singapore marks a significant step taken by the company to increase its presence in other emerging global markets.
 
Wendy's has outlined a multi-year turnaround plan to improve restaurant operating margins, reinvigorate brands, revitalize comparable-store sales and expand internationally. Management foresees strategic growth opportunities for both Wendy’s and Arby’s brands, and believes that there is room for over 8,000 restaurants outside of North America.
 
In 1983, Wendy’s had opened two outlets in Singapore but closed them by 1987.
 
Last week, Wendy’s declared that it will not renew its agreement with Japan’s franchisee, Zensho Co. Ltd, after both the parties failed to reach an amicable solution on the development of Wendy’s brand in Japan. The contract, which expires on Dec 31, 2009, will result in the closure of 71 outlets by the end of the year. However, the company also notified that it is looking for other strategic franchise or joint venture opportunities in the country.
 
Wendy’s faces stiff competition from Burger King Holdings Inc. (BKC), McDonald’s Corp. (MCD - Analyst Report) and Yum! Brands, Inc. (YUM - Analyst Report). However, these quick-service operators are faring better than casual dining restaurant chains, such as Cosi Inc. (COSI - Snapshot Report) and Red Robin Gourmet Burgers Inc. (RRGB - Analyst Report), as cash-strapped consumers trend towards fast-food centers due to cheaper dining options.

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