Wendy's Beats Estimates For Quarterly Results; McDonald's Franchise Settles Workers' COVID-19 Lawsuit; McDonald's To Require Its US Office Workers To Get Vaccinated

By Dave Simpson
Wendy's Beats Estimates For Quarterly Results; McDonald's Franchise Settles Workers' COVID-19 Lawsuit; McDonald's To Require Its US Office Workers To Get Vaccinated

Wendy's Co has beaten estimates for quarterly results and raised its forecast for annual sales, betting on its revamped breakfast menu to attract more customers after the easing of pandemic-related dining restrictions.

Shares in the company, which increased its quarterly cash dividend by 20% to 12 cents per share, rose more than 3% in premarket trade.

Reduced restrictions on travel and restaurant capacity and reopening of offices have also boosted sales at other major US restaurant chains, including McDonald's Corp, Starbucks Corp and Chipotle Mexican Grill Inc.

Wendy's benefited from the breakfast menu it launched last year as well, which includes the crowd-favorite Baconator burger. The hamburger chain will boost its annual advertising spend by $10 million as it looks to draw more customers to its breakfast offering.

Dublin, Ohio-based Wendy's also said restaurant services provider Reef Kitchens would open and run 700 delivery kitchens, over the next five years, that will offer Wendy's products across the United States, Canada and the United Kingdom following a pilot in Canada.


The move comes at a time when most major US fast-food restaurants have been doubling down on their digital business as people shifted to online ordering during the health crisis.

Wendy's forecast global system-wide sales growth between 11% and 13% in 2021, compared with its previous range of 8% to 10%. It also raised its earnings per share forecast to between 79 cents and 81 cents from 72 cents to 74 cents.

US same-store sales for the second quarter ended July 4 rose 16.1%, above estimates of 15.3%, according to IBES data from Refinitiv.

Excluding items, the company earned 27 cents per share, compared with estimates of 18 cents.

McDonald's Franchise Settles Workers' COVID-19 Lawsuit As US cases surge

The above news coincides with news that a McDonald's Corp franchise in Oakland, California, has agreed to take steps to protect workers from COVID-19 to settle a 2020 lawsuit claiming managers gave employees dog diapers and coffee filters to use as face masks.


The franchise said in the settlement announced that it will provide employees with paid sick leave, masks and gloves, maintain social distancing, regularly disinfect surfaces and require workers with COVID-19 symptoms to stay home.

The franchise will also establish a worker safety committee, requiring the owner and managers to meet monthly with employees to discuss ways to maintain a safe workplace.

Fight for $15 and a Union, a labour organising group that is involved in the lawsuit, said that the safety committee is the first of its kind and will create a national model for giving more leverage to workers.

The company denied wrongdoing, and it is not clear if the settlement included a financial component.

The Oakland franchise's operator, Michael Smith, said in a statement that the restaurant began implementing the measures outlined in the settlement more than a year ago.


"We will continue to take all necessary steps to ensure that our stores remain as safe as possible," Smith said.

Last week, McDonald's agreed to implement various protective measures at a corporate-owned restaurant in Chicago to settle a lawsuit claiming the company had created a "public nuisance" by failing to take steps to protect workers.

McDonald's denied wrongdoing in that case. The company has said that it has implemented dozens of safety measures at US restaurants and required franchises to do the same.

McDonald's said in a statement that it is "confident that any outlier conduct like that alleged in these complaints does not reflect what has broadly happened and continues to happen across 14,000 US McDonald’s locations."

"We've worked closely with leading public health authorities, with global suppliers, and with the Mayo Clinic to enhance over 50 safety procedures in restaurants and have sourced over 111 million pieces of personal protective equipment to support crew safety," the company said.


McDonald's To Require Its US Office Workers To Get Vaccinated

The Oakland franchise settlement comes amid a surge in COVID-19 cases in the United States due to the spread of the highly contagious Delta variant. An increasing number of companies are requiring workers to be vaccinated, or considering doing so, in response to the increase.

McDonald's Corp has said that it will require its US-based office workers to be vaccinated against COVID-19 and will delay a return of employees to its offices until at least October.

The company joined New York Stock Exchange and NBCUniversal in adopting a vaccination policy as a result of the resurgence of COVID-19 cases in the United States due to the Delta variant.

In recent weeks, major companies including Alphabet Inc's Google, Uber Technologies Inc and Facebook Inc said that all of their US employees must get vaccinated to step into offices after new guidance from US Centers for Disease Control and Prevention (CDC) that requires fully vaccinated individuals to wear masks.

McDonald's said in an internal note obtained by Reuters that it is pushing back office reopening to October 11 from September 7 to allow employees time to get vaccinated.

The company said that the vaccination requirement does not apply to employees of McDonald's restaurants, whether corporate-owned and franchised.

The New York Stock Exchange said that it will require anyone accessing its trading floor at 11 Wall Street to be fully vaccinated against COVID-19 as of September 13, according to a memo to the floor community seen by Reuters.

NBCUniversal will require US based-employees returning to its office to be fully vaccinated, the Comcast Corp-owned media company said, adding that the company will require employees to provide vaccination status details.

The company also said that it is delaying its large-scale return to no sooner than October 18.

News by Reuters, edited by Hospitality Ireland. Click subscribe to sign up for the Hospitality Ireland print edition.