I love food, especially if it is fast. We had fast food in India, but not to the United States of America’s frequency or relevance. It is true, America is the birthplace of fast food, and McDonald’s is a flagship example used to explain the relevance of fast food. McDonald’s is a domestic powerhouse, a symbol of American influence to help execute soft power. “McDonald’s has over 31,000 restaurants in 118 countries, employing more than 1.5 million people” . McDonald’s is also an American company that is listed on the New York Stock Exchange. Now it was incredibly baffling to me to think that a fast-food company was listed on the stock exchange, but it made even more sense as to why it should be. McDonald’s specializes in “Quality, Service, Cleanliness and Value” ; words prescribed by McDonald’s Corporation founder Ray Kroc. McDonald’s is a massive global operation, with the challenge of executing a vision without deviating from those specific principles. The granularity available to suit the different regions highlights the company’s durability and longevity. The story of McDonald’s itself has murky plot twists, but ignoring them and isolating the company in the NYSE would indicate that the company has been a steadfast performer over the decades. As of November 8, 2020, If an individual had purchased and held the stock from 10, 20, or 30 years ago, the price return would have been over 150%, 500%, and 2500%, respectively .
MCD hovers at the $200 price range as a stock, which is too high for me. Other fast-food companies such as Jack in the Box, Taco Bell, Popeyes, etc. are listed in the stock exchanges. The one company that gravitated me with their quality food and service is Wendy’s, WEN. To me, WEN has consistently delivered with their food and service, especially during this pandemic. Drive-thru’s across the nation have transformed into kiosks or this portal that magically produces the food we crave and desire. The line can be severely long sometimes, but the desire to get quality food for a value price is something we all crave from time to time.
WEN has never disappointed me with their quality. While there have been discrepancies in my mobile order and what I received, human error can always exist, and the mistakes were immediately rectified if notified. It has served me good food, at a value price and investing, in the company was a no-brainer. Adhering to “Warren’s principle on Retained Earnings,” WEN highlights a positive trend in retained earnings in the last five years, has a strong dividend history, and has approximately 70% institutional ownership .
WEN currently has over 6000 in the United States and Canada combined  and lacks the global portfolio that MCD sustains. What it might lack in brand scale, it makes up in a different brand. Even though “Quality” is the focus and the primary color is the same, WEN is in stark contrast to MCD. A Google Trend comparison of the search item from 2013 to now of “wendys near me” and “mcdonalds near me” shows that even though WEN does not perform as MCD, it is relatively steady compared to the fluctuations of MCD.
I assume that this is because once a consumer understands where their closest fast-food franchise of choice, the frequency at which the terms are search again would reduce. In that train of thought, MCD locations’ scale almost makes it impossible for it to attract new consumers in the United States. The steady search rate of WEN potentially highlights how there are consumers, still seeking their products. While WEN might never dethrone, MCD, who wants it to. WEN just performs, and the brand created by Dave Thomas may sustain for generations to come.