Wendy's dead in St. Louis

...and in downstate Illinois. The franchisee, who ran some 50-odd stores, was put into involuntary bankruptcy a month ago by some of his creditors. Wendy's itself, the franchisor, apparently couldn't find anyone to take over the stores, so it looks like the assets will be sold off. A thousand people lost their jobs and, judging from the claims they're filing, never got their last paychecks.

I represent one of the creditors in the bankruptcy and am really surprised that Wendy's corporate would just let an entire major metro area go like they've done. Yeah, a corporate spokesperson said they'd be back, but unless there's some secret plan in the works, they'll have to build entirely new stores, start everything from scratch. And they have to lose a ton of goodwill by essentially pulling out of the St. Louis and downstate Illinois area.

It's not like I'll miss them in any culinary sense, but they're a major player in fast food and I think they screwed this one big time.

Thats sad to hear. You have to feel sorry for the everyday worker. I'm sure corporate is working to put the pieces back together, they have too much to lose. Chow Jim

Yes, seems the workers always get the shaft in these situations. Something very similar happened a couple of years ago in our area with Ground Round. Folks came to work on payday to find 50 or 60 restaurants locked. There was some uproar, but I don't recall hearing if they ever got paid.

Most of those locations I know of have been leveled for other chains, now, like Applebees.

Wendy's is still going strong here in Carbondale. Must be a different franchisee.

The problem is that the national headquarters will let an organizational buy all the franchise rights for a given area. Big Boy started that idea decades ago. Anyway, the process is fine IF the franchisee company is well run. But if the outfit screws up, it takes out a big chunk of operations. In Milwaukee, for example, the idiots who owned the local Burger King rights managed to drive themselves into bankruptcy.
HOW THE HELL DO YOU LOSE MONEY ON A HAMBURGER STAND?!?!?!?!?!?!?

sigh....

The situation "Wendy's of St Louis" presented The Wendy's Corporation probably included assumption of a debt load no one wanted. So it might be better if the initial frnachises collapse completely, then a new growth occur.
Yeah, the employees got screwed.

The Ground Round situation was far worse. The corporation controlling all Ground Rounds held a massive teleconference with all their managers nationwide. Once everyone was connected, the suits simply said "As of tonight, the Ground Round is ceasing operation." And then they hung up.

Actually, they severed the connection at their end. The shocked franchisees discovered they were left alone on the phone. Some used the opportunity to set up a temporary organization. They managed to stave off complete closure for a time, but in the end the results were the same.

I think corporate bankruptcy laws should be amended to have real, devastating effects on the suits who abuse them, expecting to dance away with their personal fortunes intact. Declare your company bankrupt and throw a thousand people out of work? Fine. Here's a cardboard box and alley for you to live in. Enjoy!

Looks like they are opening back up again...A fresh "Help Wanted" sign was spotted today in St. Peters,MO. The resturants have been virtually untouched since the demise of the former franchisee.

quote:

Originally posted by DavidEMartin

The problem is that the national headquarters will let an organizational buy all the franchise rights for a given area. Big Boy started that idea decades ago. Anyway, the process is fine IF the franchisee company is well run. But if the outfit screws up, it takes out a big chunk of operations. In Milwaukee, for example, the idiots who owned the local Burger King rights managed to drive themselves into bankruptcy.
HOW THE HELL DO YOU LOSE MONEY ON A HAMBURGER STAND?!?!?!?!?!?!?

sigh....

The situation "Wendy's of St Louis" presented The Wendy's Corporation probably included assumption of a debt load no one wanted. So it might be better if the initial frnachises collapse completely, then a new growth occur.
Yeah, the employees got screwed.

The Ground Round situation was far worse. The corporation controlling all Ground Rounds held a massive teleconference with all their managers nationwide. Once everyone was connected, the suits simply said "As of tonight, the Ground Round is ceasing operation." And then they hung up.

Actually, they severed the connection at their end. The shocked franchisees discovered they were left alone on the phone. Some used the opportunity to set up a temporary organization. They managed to stave off complete closure for a time, but in the end the results were the same.

I think corporate bankruptcy laws should be amended to have real, devastating effects on the suits who abuse them, expecting to dance away with their personal fortunes intact. Declare your company bankrupt and throw a thousand people out of work? Fine. Here's a cardboard box and alley for you to live in. Enjoy!

One serious problem exists that makes all of this possible. As a people we have become supremely selfish. In the comsumer driven world, we want the lowest price. Period. We don't care how the provider comes up with the lowest price, just as long as it is. People gripe & gripe about the lack of service from the airlines. But with few exceptions, what does the traveler want? The lowest price. People talk about how much they hate Wal-Mart..but..how did Wal-Mart get to where it is? By offering the lowest price. People who complain about Wal-Mart are there every weekend buying their week's worth of groceries and $30 DVD players. On the business side, companies are looking for as much profit as possible..there is no feeling that they care for their employees. Few companies are willing to take a little less profit, so that their employees could do a little better. So our own greed and selfishness has done this to us. We want & want & want. We want to consume, and in turn we have consumed our own souls.