Wendy's Costing Methods

4208 Words Dec 21st, 2012 17 Pages
UVA-C-2206

WENDY’S CHILI: A COSTING CONUNDRUM
What happens to a successful company when it loses its founder, senior chairman, advertising icon, and beloved leader? That was the question being asked about Wendy’s
International, Inc., in January 2002 after Dave Thomas, 69, passed away from cancer. In the words of Jack Schuessler, the company’s chairman and CEO, “Dave was our patriarch. He was the heart and soul of our company.” Without him, the company would never be the same. However, Dave
Thomas left behind a legacy about values, ethics, product quality, customer satisfaction, employee satisfaction, community service and shareholder value that provided a solid foundation on which to continue the success the company had
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Wendy’s chili was prepared daily using an original recipe. It was slow-simmered for from four to six hours and served the following day. Each eight-ounce serving contained about a quarter pound of ground beef. The same beef patties were used in making chili as were served as hamburgers. Although it was sometimes necessary to cook beef patties solely for use in making chili, most of the meat for Wendy’s chili came from “well-done” beef patties that could not be served as “hot ’n’ juicy” old-fashioned hamburgers. These “well-done” hamburgers were refrigerated and used in making chili the following day.
Wendy’s french fries were prepared from high quality potatoes and were cut slightly longer and thicker than those served by most other quick-service hamburger chains. The company used specialized fryers designed to cook the inside of these bigger potatoes without burning the outside.
Wendy’s Frosty Dairy Dessert was a blend of vanilla and chocolate flavors that was too thick to drink through a straw. It was served with a spoon to be eaten as a dessert, but some customers ordered a Frosty in place of a soft drink. Whether served as a dessert or as a dairy drink, the Frosty was a distinctive and popular menu item.
Initial Growth
The first Wendy’s restaurant opened in Columbus, Ohio, in November 1969. The second
Wendy’s opened in 1970, restaurants three and four opened in 1971, and restaurants five,
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