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Wendy's has rejected a buyout offer from its former chairman and one of its largest franchisees, opting to put its faith into a revitalization plan put forth by the company's new CEO Bob Wright.
The struggling fast-food chain also said on Thursday that it has agreed to buy up to 163 restaurants from the franchisee Meritage Hospitality Group, unless a better offer comes forward out of bankruptcy court.
Nelson Peltz, Wendy's largest shareholder who spent 17 years as the company's chairman until 2024, offered to buy the company for $7.35 per share, or $1.4 billion. His group includes mega-franchisee Greg Flynn and a pair of investment groups.
But an independent committee of Wendy's board members rejected the proposal, saying that it "substantially undervalues Wendy's standalone prospects and long-term earnings potential."
The company adopted a shareholder rights plan, also known as a poison pill, that gives shareholders additional stock if someone buys 15% or more of Wendy's shares without company approval. If someone already owns more, their purchase of additional stock would also trigger the agreement.
"Our confidence rests firmly in Bob Wright's proven track record of seasoned industry leadership, including restaurant business turnarounds," Wendy's Chairman Art Winkleblack said in a statement. "We believe in Bob and his executive team's ability to execute on the plan they recently presented to our franchisees at the 2026 Wendy's convention."
Wendy's made these announcements on a day in which it said same-store sales fell 5.7% in the U.S., and 2.2% internationally. The 5.7% same-store sales decline came on top of a year-ago decline of 4.7%, making it the third straight quarter of double-digit two-year comparable-store sales declines.
But company executives did say traffic improved throughout the quarter, though it remained down.
Wright, a longtime former Wendy's executive, was hired earlier this year to turn things around. On Thursday, he announced a revitalization plan called "Dave's Way."
In a statement, he said that the company has tested improvements to its menu, marketing, and its digital business. "I'm encouraged by how quickly our system has aligned around Dave's Way," Wright said in a statement. "Dave's Way brings our areas of focus in one integrated strategy with a clear objective: growing customer traffic and market share while strengthening restaurant profitability."
Steve Cirulis, the company's CFO, said that the company has $414 million in cash and $174 million in free cash flow to date, which should position the company to invest behind the plan.
He also said that improvements in breakfast could "unlock up to $200 million in restaurant-level EBITDA across the system," referring to earnings before interest, taxes, depreciation, and amortization.
That breakfast strategy is "location specific," after tests yielded "significant profit improvement." In other words, breakfast will be optional for franchisees. The company said stores that opted not to sell breakfast saw improved results during the rest of the day.
The plan also includes a portfolio optimization. The company will acquire some restaurants and will work to transfer other restaurants to "well-capitalized, high-performing operators."
It appears to be starting with Meritage, the Michigan-based operator that filed for bankruptcy this year and is in the process of closing 60 locations. Wendy's has agreed to acquire up to 163 locations. Meritage is also working to sell stores in other markets.
Wright told analysts on Thursday that he has been in "constant contact" with franchisees on the plan. "I can't emphasize enough just how important they are to our success," he said. "Our franchisees are committed to the Wendy's brand, aligned to our strategy, and they continue to make smart investments to grow their business and Wendy's."
