Case Study:DAVID THOMAS: WENDY'S "DAD"

Title of the Case

Background of the Case

Statement of the Problem(s)

Objectives in Analyzing the Case

Analysis of the Problem

Alternatives

Evaluation of the Alternatives

Recommendation

Answers to Guide Questions : Answer only Question 1 and 4

CASE STUDY DAVE THOMAS: WENDY'S "DAD"6 R. David Thomas, founder and senior chairman of Wendy's International, Inc., has been called many even decided to go pul things in his day, His franchisees, citing his barn- gan to lose its custome storming market tours as a source of inspiration, call suffered. him the "Great Communicator," Most of America Aware that someth knows him as the funny, folksy character on Wendy's tant to relinquish renowned television commercials. Some may even Thomas attempted to recognize him as the lonely boy from his autobiogra who had been drafted phy, Dave's Way. But Jim Near, Wendy's chairman and COO of the con and CEO, sees him as "Wendy's Dad." According to found his savior in Ne Near, "No other chain has an active founder like him and one of Wendy's m leading the way,"6 but Near was less e place I wanted to be, Indeed, few companies can boast a founder as just given manageme well-known and well-liked as Dave Thomas. weren't even giving Ironically, however, such stardom was not among persisted and eventu Thomas' goals. In fact, after years of virtually non- As a condition of a stop work building the Wendy's name, Thomas re- Near insisted that Th tired from day-to-day management in the early spokesperson and a 1980s. "I left the company to people smarter than me and so was born "Da to run," he explained." His charming modesty Although Thomas proved to be a liability, however, for, shortly after his tant, he has thrown departure, franchise problems arose on the heels of role of Wendy's figu the celebrated "Where's the Beef?" television spot next to Near's, Thon that boosted Wendy's up the fast-food charts. "Funny for market visits, pro things happen when people start to make money," vision spots. Thomas high in audience reco Near noted. "It's easy to take your mind off what's vorite of critics. "Wait important. " Many of Wendy's original franchise praised Near. "We ha owners had sold their stores to owners who were not good on TV."68 interested in Thomas' standards of excellence, which The "Wendy's Wil had become integral to the restaurant chain. Other in April 1994, illus owners, assuming the business could run itself, sim- learned to play his ply left their franchises stranded. Some franchiseesPoaltion power Path goal model Transactional leaders Transformational leaders Situationand leadership theory CASE STUDY AVE THOMAS: WENDY'S "DAD" na senior Chairman of even decided to go public. Very quickly Wendy's be- has been called many gan to lose its customer oriented focus and the chain wsees, Citing his barn suffered. ures of inspiration, call Aware that something had to be done, but reluc- lot," Most of America tant to relinquish his hard-earned retirement. Character on Wendy's Thomas attempted to leave the situation to Near. Cible, Some may even who had been drafted in 1986 to become president from his autobiogra and COO of the company. Thomas hoped he had sar, Wendy's Chairman found his savior in Near, a board member since 1981 ly's Dad," According to and one of Wendy's most successful franchise owners, active founder like him but Near was less enthusiastic. "This was the last place I wanted to be," he recalled. "Franchisees had on boast a founder as just given management a vote of no confidence. They as Dave Thomas. weren't even giving them a chance." But Thomas room was not among persisted and eventually Near agreed to take over. years of virtually non- As a condition of accepting the position, though. My's name, Thomas re- Near insisted that Thomas become an active Wendy's agement in the carly spokesperson and ambassador. Thomas consented seople smarter than me and so was born "Dave." is charming modesty Although Thomas may have been initially reluc- er, for, shortly after his tant, he has thrown himself wholeheartedly into the is arose on the heels of role of Wendy's figurehead. Maintaining an office Beef?" television spot next to Near's, Thomas tours the country regularly fast food charts, "Funny for market visits, promotional appearances, and tele- start to make money," vision spots. Thomas' spots have scored consistently e your mind off what's high in audience recognition and he has become a fa- dy's original franchise vorite of critics. "Wait till you see the latest creative," is owners who were not praised Near. "We had no idea that Dave would be so rda of excellence, which good on TV."68 restaurant chain. Other The "Wendy's Wildest Tie Contest," which began we could run itself, sim- in April 1994, illustrates how well Thomas has What Some franchisees learned to play his audience. Prior to the contest, atelevision spot for Wendy's "Spicy Chicken" sandwich featured Thomas sporting what he considered the "wildest tie around." Always the showman, however, Thomas decided to hold a contest to see if anyone could top his exotic neckwear. "If you got an old tie that's looking wilder every year, then send it on in," he said. "If I think it tops mine, I'll give you an entire collection of new designer ties." The winner re- ceived a choice of either a $1,500 neckwear wardrobe, featuring ties by designers such as Armani, Hermes, Nicole Miller, or the cash equiva- lent. Two runner-ups received a $500 collection or the cash equivalent. Such visibility has not only made Thomas a well- known figure, but it has also helped to shoot Wendy's profitability and popularity back up and make it one of Wall Street's favorite restaurants. In 1988, Wendy's posted an unprecedented $5 million loss. By 1994, with the help of "Dave," Wendy's claimed 4,200restaurants worldwide and annual sales near $4 bil. lion, Many people attribute Wendy's astonishing enc comeback to the enthusiasm and energy emanated the by their appointed leader. For Thomas himself, how. ever, the success of Wendy's belongs to those people hou who helped bring it about: his employees. "[I'm] no his body really," Thomas confessed. "I just make ham wit bor burgers for a living."70 Wo bil live cor CASE QUESTIONS pa er 1. Is Thomas an effective leader? If so, what makes per as him effective? If not, why not? 2. Who does Thomas lead? Bl 2. Do you consider Thomas charismatic? Why? inf 4. Are there types of businesses in which Thomas Fi style might be less effective? More effective? gle th Re qu