Wendy’s, Arby’s Join Forces

NEW YORK Arby’s now has an adopted sister — Wendy’s. The No. 3 burger chain, which has been on the block for months, finally found a home at Triarc — which also owns Arby’s. The all-stock deal was valued at a reported $2.34 billion.

Triarc is owned by super-investor Nelson Peltz who has helped revive companies like Heinz and Snapple. Wendy’s can use the help.

The chain has been struggling with both sales and brand image of late. Once perceived to have higher quality food than McDonald’s and Burger King, Wendy’s has often been beaten at its own game. Others have successfully trotted out premium salads and Angus burgers that rival Wendy’s offerings.

Earlier this month, Wendy’s launched its Chicken Go Wraps nationwide. The me-too product follows the successful launch of McDonald’s Snack Wraps.

As its competitors enjoyed sales surges last year, Wendy’s sales were roughly flat at an estimated $7.8 billion in 2007, per Technomic, Chicago. The chain is now the No. 5 quick-service restaurant, as both Starbucks and Subway passed it in terms of sales.

No. 3 Starbucks was up 22 percent to $8.6 billion. No. 4 Subway grew 6.5 percent to $8.2 billion. McDonald’s was up 6 percent-plus to $28.8 billion while Burger King grew 2 percent to $8.6 billion.

Wendy’s has actively searched for an identity since founder Dave Thomas passed away in 2002. The chain has cycled through Mr. Wendy, red wigs and other ideas. In February, it rolled out the “It’s waaaay better than fast food” campaign from Kirshenbaum Bond + Partners, New York.

Paul Kershisnik was named interim CMO in February to oversee the new effort, filling the spot vacated by Ian Rowden, who went to Saatchi & Saatchi.

In 2007, Wendy’s spent $305 million in traditional measured advertising, down 18 percent from $370 million in 2006, according to Nielsen Monitor-Plus. Arby’s typically spends about $150 million on ads per year.

MDC Partners’ Kirshenbaum Bond + Partners and Publicis Groupe’s Saatchi, both in New York, work on Wendy’s. Arby’s is handled by Omnicom Group’s Merkley + Partners in New York.