Wendy's to Enter Ecuador - Analyst Blog
March 25 2013 - 1:15PM
Zacks
The Wendy's Company (WEN) recently announced
that it has inked a long-term development agreement with The Eljuri
Group to enter Ecuador. Per the deal, The Eljuri Group will develop
and franchise 20 Wendy’s restaurants in the country.
The terms of the deal were not disclosed. The first two units are
slated to be opened in 2013 in Guayaquil, a coastal city.
The Eljuri Group, being the largest business group in Ecuador,
manages more than 160 companies across different industries. Given
its familiarity with local food habits and a strong presence in the
real estate and hotel food service industry, The Eljuri Group is
deemed a strategic fit for Wendy’s Ecuadorian expansion plan.
Wendy’s is on an expansion spree in the overseas market. The latest
alliance indicates its sustained momentum in the Latin American and
Caribbean region. In this region, Wendy’s already has a presence in
17 countries and U.S. territories.
Wendy’s also has long-term development agreements with
franchisees in the Middle East, North Africa, Singapore, Turkey,
Russia and the Eastern Caribbean region. We believe the company’s
extended global reach bodes well for its financials.
Although the company has signed many franchise development
agreements for international growth, Wendy’s lags behind
McDonald’s Inc. (MCD) and Yum! Brands
Inc. (YUM) in its scale of operations. A wider scale
provides the company’s peers with greater operational strength.
Moreover, all these companies seek to ramp up their operations in
Latin America and the Asia-Pacific region that, in turn, would lead
to heightened competition.
Wendy’s currently retains a Zacks Rank #3 (Hold). Red Robin
Gourmet Burgers Inc. (RRGB), another restaurant industry
stock, is currently performing well with a Zacks Rank #1 (Strong
Buy).
MCDONALDS CORP (MCD): Free Stock Analysis Report
RED ROBIN GOURM (RRGB): Free Stock Analysis Report
WENDYS CO/THE (WEN): Free Stock Analysis Report
YUM! BRANDS INC (YUM): Free Stock Analysis Report
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