Wendy’s fourth quarter wasn’t expected to be a home run. The chain struggled throughout 2025 as it navigated a bevy of leadership changes. In October, interim chief executive officer Kenneth Cook implemented a Project Fresh turnaround plan that included the targeted closure of about 5% to 6% of its U.S. system, or about 300 U.S. restaurants.
The company was also lapping a strong Q4 2024 from its successful SpongeBob collaboration.
However, probably nobody expected -11.3% in same-store sales to close out 2025. That is a steeper decline, by the way, than during the COVID quarter of Q2 2020, which was -4.4%.
During the company’s earnings call Friday before market, Cook outlined the details and progress of that Project Fresh plan, noting that the company is working with urgency to turn recent trends around.
The comprehensive plan checks all the boxes of running a restaurant — operational improvements, menu enhancements, relevant marketing, system optimization, digital growth, and franchisee profitability, and Cook said he is encouraged by the progress made so far. Wendy’s trough was in October, when the plan was first introduced, and the company’s performance has sequentially improved since with the exception of January’s weather disruption from Winter Storm Fern.
“We’ve learned a great deal. We’ve invested in deeper data and insights on our customers, and we’ve improved our restaurant-level performance,” Cook said. “We now have a clear picture of what needs to improve in our marketing and operations, and how to optimize the store footprint within our system. Project Fresh is our strategy to clearly address these issues, and we are implementing it with urgency.”
Wendy’s considers 2026 to be a “rebuilding year,” with global comparable sales expected to be flat.
The chain’s “urgency” will be focused on restoring relevance by improving messaging that “connects with customers in socially and culturally relevant ways.” This includes more targeted communication with customers and more investments in social media and streaming platforms. Cook said Wendy’s has also strayed a bit from its quality and value positioning and is bolstering its marketing calendar this year to include eight windows.
“We’ve established a more disciplined programming structure to ensure a steady stream of new news that keeps the brand top of mind and supports higher customer frequency,” he said.
The calendar will be focused on everyday value as opposed to short-term promotions. In January, for instance, Wendy’s expanded its Biggie deals to include $4, $6, and $8 price points. The permanent platform was designed to give customers more choices and generate incremental occasions, such as snacking.
“One learning from 2025 is we swung the pendulum too far toward limited-time promotions instead of everyday value,” Cook said. “We expect the consumer to remain challenged throughout 2026, which means it ends up being a share game. So, launching the Biggie deals platform was important for us. It provides customers value they can rely on every single day.”
Wendy’s will also push the gas on its core equities, including burgers. Cook noted that the chain didn’t have a single burger innovation in 2025, which will change this year. A new Cheesy Bacon Cheeseburger hits restaurants next week. The chain is also upgrading its chicken sandwiches later this year, including classic and spicy versions. It’s also introducing a chicken snack wrap, an increasingly popular item at quick-service chains. Cook said the company will be making “quality upgrades” across the menu.
“A very small portion of our customers are considered adventurous eaters. These people want unique flavor profiles, kind of extreme innovation. They represent a very, very small percentage of our total (so) we shouldn’t focus on them,” he added. “Some of the collaborations we did were focused on this segment and weren’t broadly appealing enough to move the needle. We’re going to move away from that.”
On the operations side, Wendy’s is pulling pages from its company-owned restaurants, which outperformed the rest of the system by 310 basis points in Q4. The company has enhanced its training programs, implemented a new learning management system, and is partnering with franchisees to extend the performance management strategy across their restaurants. Wendy’s is also expanding its field operations team in 2026.
In addition to the 5% to 6% expected closures, Wendy’s is also optimizing its system by allowing franchisees to opt out of breakfast if their market doesn’t fit well with the daypart. Cook said a large majority of the system will remain in breakfast, however.
“While many restaurants perform well at breakfast, we recognize it may not work in every restaurant,” Cook said. “To strengthen franchisee profitability, we’re providing more flexibility around operating hours for the morning daypart, which allows them to reallocate resources toward their greatest potential for growth across dayparts.”
Along these lines, Cook said Wendy’s has ramped up its communication in general with franchisees as the company executes Project Fresh.
“We have significantly increased how frequently we’re communicating with franchisees,” he said. “That’s critically important. Franchisees are appreciating the flexibility we’re giving and us working hand-in-hand with them to improve overall franchisee economics.”
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