NEW YORK — Wendy’s severed another tie that bound it to its old partner, Arby’s, when it announced Thursday that it would move its headquarters back to Dublin, Ohio, from Atlanta.
Wendy’s had been based in Dublin, outside Columbus, until late 2008, when it was bought by Arby’s. It moved its top executives to Arby’s home turf of Atlanta but kept about 400 employees at the Dublin offices on Dave Thomas Boulevard, a street named after Wendy’s founder. The combined company was named Wendy’s/Arby’s Group Inc.
But the combined company decided to sell Arby’s to Atlanta-based private equity firm Roark Capital Group last month, fueling speculation that Wendy’s would go back to its Ohio roots.
The combined Wendy’s/Arby’s had about 400 employees in Atlanta. About 200 will remain to work for Wendy’s in jobs including information technology and accounting while another 120 will work for Arby’s. They won’t be on the same floors as their Wendy’s counterparts.
About 50 positions, including executive jobs, will move back to Ohio, and the rest of the jobs will be eliminated.
Overall, the economic loss to Atlanta is negligible. But losing a corporate headquarters can be a psychological blow for a city, because it usually loses the executives who hold decision-making power and support the local philanthropic scene.
Wendy’s said it will receive about $12 million over the next 10 to 15 years in state and city incentives as it upgrades the Dublin office and adds another 50 employees or more over the next two years.
Incentives can be a way to encourage needed investments in depressed economies. But they’re also criticized by detractors who say they take needed revenue from governments for projects that companies were probably going to do anyway. Some of the Wendy’s jobs will go to employees moving from Atlanta.
Wendy’s said the incentives were key to its decision to pursue the project, which will include a new meeting centre that can hold up to 700 people and expanded room for the research and development team. CEO Roland Smith was joined by Ohio Gov. John Kasich and city officials on Thursday when he made the announcement about moving back to Dublin.
The marriage between Arby’s and Wendy’s was short-lived. It started in 2008 when Nelson Peltz’s investment firm, which already owned Arby’s, decided to scoop up Wendy’s as well. But barely two years later, Wendy’s had become the favourite child and Peltz put Arby’s on the chopping block. The idea was that selling Arby’s would allow Peltz and his team to focus on Wendy’s.
Wendy’s executives plan to open more restaurants overseas, offer breakfast at more locations, and renovate the restaurants to keep pace in an environment growing increasingly competitive as the economy forces people to cut back on eating out.
In striking the deal to sell Arby’s to Roark Capital Group, Wendy’s kept an 18.5 per cent stake in its former partner, which it said signalled its confidence in Arby’s future. Roark also owns Moe’s Southwest Grill, Cinnabon and other restaurants.
Shares of Wendy’s/Arby’s slipped 22 cents to $4.97 in afternoon trading Thursday, a down day for the stock market.