Wendy's: POS Upgrade May Help Performance, But We'll Still Have To Cook The Food

Wendy's plans to finish a long-overdue upgrade to POS systems in all its restaurants by June, after suffering downtime due to poor reliability from aging hardware in some of the chain's 6,600 stores.

That's not a big surprise—POS hardware refreshes happen all the time. It's how the news came to light: a Wall Street analyst who took the opportunity of an earnings call on March 1 to complain that his breakfast at Wendy's took too long because it was freshly cooked.

"I don't know if it's an appropriate forum for this, but I mean the issue has just been the fact that the product basically had to be cooked," said JPMorgan Chase analyst John Ivanhoe. "And so when you have a great, high-quality menu, there's a lot of variety, and to really focus on the freshness of it, in some cases by definition means having the product ready when the customer actually arrives."

After Wendy's CEO Emil Brolick apologized (because that's what CEOs do when an analyst's quick-serve breakfast isn't quick enough), CFO Stephen Hare deftly steered the topic to the flexibility and useful performance data that would come from the POS upgrades (no, he couldn't quantify the 50- or 100-basis-point benefit from them that Ivanhoe was looking for, but "I think what's clear from the ones we've already put in is that we do get significantly less calls into the help desk," Hare said).

Hare wisely didn't point out that there's a disconnect between freshness and variety on one hand and "having the product ready when the customer actually arrives" on the other (because that's not what CFOs say to analysts).

But maybe there's an opportunity here for Wendy's. Once the new POS systems are all installed, the chain might be able to integrate a smartphone app that would let an analyst order breakfast and pay for it remotely on the way to the store.

That way, when the freshly made breakfast items have been sitting, bagged and ready, on a steam table for 15 minutes waiting for him to arrive, he'll have a whole different set of questions to ask next year.

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