When Wendy’s New Zealand operations were sold to US giant Flynn Group mid-last year, there was plenty of speculation about what it would mean for the local fast food business.
Previous owners Danny and Dianne Lendich started Wendy’s in New Zealand in 1988 and went on to open 22 stores throughout the country before selling the business last May for an undisclosed sum.
Greg Flynn, chief executive and founder of Flynn Group, believes the opportunities for expansion here and across the Tasman are aplenty, with new stores, new products, and new investments all on the menu.
Flynn Group operates just under 3000 restaurants in six restaurant brands, including Applebee’s, Taco Bell, Panera, Arby’s, Wendy’s, and Pizza Hut, as well as Planet Fitness clubs and over 100 hotels, equating to roughly $5 billion in annual revenue.
It has almost 75,000 employees across 44 states in the US, Australia and New Zealand, making it one of, if not the largest franchise operators in the world.
“We’ve been growing Flynn Group in the United States for more than two decades, and we’ve enjoyed good success. First focusing on Applebee’s, which we did nothing but Applebee’s for 12 years, and then we spent another 10 years diversifying domestically as a franchise operator,” Flynn said.
“By the time we got to 2022, you know, we had completed that sort of chapter one and chapter two, you know, quest for domestic diversification.”
Flynn said international expansion was the obvious next step, taking the teams, platform, experience and relationship with its brands to new geographies.
Although he acknowledged that expansion was done conservatively, choosing Australia and New Zealand due to shared languages, the rule of law, and the already established relationships Kiwi customers have with American brands.
Flynn said an important factor in purchasing the business was applying a “premier filter”.
“By premier, I mean typically big, you know, they’ve been around for multiple economic cycles, which typically means they’ve been around for 30, 40, 50, 60 years.”
“They’ve demonstrated their appeal in all geographies and across a broad demographic slice. They have scale and they have huge marketing budgets, high brand awareness, high brand love, all of which helps mitigate the risk of the industry. The risk in the industry is very high, but it’s lowest in the arena of the biggest, most successful brands.”
He said that’s what made the Wendy’s New Zealand operation so enticing, and a proposition much easier than starting from scratch.
“Once we came to New Zealand and met the Lendich family, visited the restaurants and met the people, we knew instantly that there was a great cultural fit between our businesses.”
He confirmed that Danielle Lendich is still involved in the leadership team, bringing knowledge and experience.
Flynn said there were no plans to make sweeping changes to the local operations, but he believed Flynn Group’s supply chain, technology, marketing, and data analytics could all add value to the business.
Wendy’s NZ would also benefit from capital investment that a family business couldn’t generate. Flynn Group has an annual revenue of about US$5 billion.
Part of that investment will be in new stores, although the number to be added and their locations were still to be determined.
“We’ll look for new locations, we’re not out to fill the country with too many fast food restaurants, but you know we have heard from the Lendich family and others that there is a constant request for ‘bring a Wendy’s to me’ and we’re open to bringing it to more New Zealanders.”
The biggest growth is expected in Australia, a country Flynn already has some understanding of, having lived there for a year previously.
The business currently has only one location in Australia in Brisbane’s Surfers Paradise, but Flynn reiterated a public announcement to expand the business to 200 stores in the first 10 years.
“We only have one restaurant open in Australia, and it is quite different from any of the restaurants here. The restaurants here frankly are more similar to the 300 Wendy’s we own and operate in the United States.”
The Surfers Paradise location is smaller than most New Zealand stores and is in a high-traffic area.
But the store has a few differences, including more blue branding and liveries, which are expected to be implemented here, as well as a much narrower menu.
The Australian menu also features some experimental products that Wendy’s is trialling, such as hand-breaded chicken tenders not sold anywhere in the US or New Zealand.
Flynn said there is the opportunity for products on the New Zealand menu to cross the ditch that loyal fans have been calling for, including Flynn’s favourite burger, the Mushroom Melt.
With a breadth of industry knowledge, Flynn thinks rapidly changing applications for new technology will seriously change the quick-service restaurant (QSR) category.
Technology has already made changes to drive-thru timers, kiosks, apps and digital menu boards, but artificial intelligence provides a whole new frontier.
“On AI, the most advanced application right now is probably in the drive-through and it’s voice interaction. It’s very good so far, but it’s not perfect. Wendy’s broadly has a test going on for voice AI, and it’s well advanced but it’s not rolled out through the whole system.”
“I anticipate that at some point it will be and it’ll really be a great benefit to the managers and the staff here who can focus on making great food and taking care of their customers’ unique needs and not just being order takers.”
Flynn also believes there are opportunities in the near-term to better utilise customer insights to influence what products are offered and marketed, although the challenge comes with implementing technology at such a fast pace.
For him, Flynn Group’s success is built on the people that make up the business and their ability to adapt to changing trends.
He said keeping a brand relevant required constant reinvention, and re-understanding what people love the brand for but then also how you evolve the brand to grow your appeal with non-core customers.
“I mean, I wake up every day and think, okay, what I need to spend my time on is making sure I’ve got the right team and what it is we need to do that they’re excited and empowered and equipped to do that?”
As to whether Kiwis can expect to see Flynn Group’s other brands like Applebee’s, Arby’s or Panera on our shores, Flynn said fans will have to wait and see.
Tom Raynel is a multimedia business journalist for the Herald, covering small business, retail and tourism.
Wendy's NZ owner Greg Flynn, chief executive and founder of Flynn Group, talks to Tom Raynel about the NZ business and his plans for growth in Australia. Video / Alyse Wright