Case Analysis: Profitability of Wendy's Chilli.

Essay by apinkroseUniversity, Bachelor's September 2005

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Dave Thomas, the founder of Wendy's restaurant, opened his first restaurant on November 15, 1969 in Columbus, Ohio. Dave was born in Atlantic City, New Jersey on July 2, 1932. He was adopted at six weeks old by Rex and Auleva Thomas. Dave moved from state to state with his father when his mother passed at the age of 5. At the age of 12, Dave obtained his first job at a restaurant in Knoxville. Thus, he began his love for the restaurant business. At the age of 15, Dave dropped out of high school to work full time in the restaurant business. While working full-time at the Hobby House restaurant, Dave met Colonel Sanders, the founder of Kentucky Fried Chicken (now KFC). In 1962, Dave was offered the opportunity to turn around four failing Kentucky Fried Chicken restaurants in Columbus, Ohio. Utilizing his past experience, Dave turned the restaurants around, sold them back to KFC, and immediately became a millionaire all at the age of 35.

He then co-founded Arthur Treacher's Fish and Chips.

Dave again capitalized on his experiences in restaurant management when he decided to establish his own restaurant. Since hamburgers were his favorite food, Dave decided to start a restaurant that would serve a quality hamburger without a 30 minute waiting period. Named for his eight year old daughter, Dave started Wendy's. In order to focus on quality and remain competitive, the menu was limited to four basic products excluding beverages. The product line included hamburgers, chili, french fries, and Wendy's Frosty Dairy Dessert.

Wendy's hamburgers patties consisted of ¼ pound of 100 percent pure domestic beef, served as a square shaped patty rather than a round shaped patty, and served "hot 'n juicy" in accordance with individual customer orders. The french fries were...