Fast-Food Franchises Spice Things Up to Win Over Fans

McDonald’s, Burger King, and Wendy’s are constantly battling for the same type of customer, which leads to relentless innovations. Who’s winning right now?

Jan 25, 2014 at 10:00AM

McDonald's (NYSE:MCD), Burger King Worldwide (NYSE:BKW), and Wendy's (NASDAQ:WEN) have all announced new initiatives recently. While Burger King and Wendy's have gone the limited-time-offer route in regard to menu items, McDonald's has just launched its #CheersToSochi social media campaign.

McDonald's is a much larger company than Burger King and Wendy's, all of which operate primarily on a franchise model. McDonald's has 35,000 locations across more than 100 countries, serving an average of 69 million customers per day. Burger King has 13,000 locations across 91 countries, serving an average of 11 million customers per day. Wendy's has 6,500 locations across 28 countries. There is no recent estimate for how many customers Wendy's serves per day.

Due to McDonald's massive geographical exposure and brand strength, Burger King and Wendy's must come up with creative ways to drive new and repeat business. Both of these companies have added to their menus. These items are likely to drive more customers through their doors, but one of them has a likely edge. 

In this corner: Spicy Chicken Sandwich
Burger King's Original Chicken Sandwich has been a big hit for 30 years. According to NPD Group, it's the best-selling chicken sandwich in the United States in the fast-food space. Therefore, Burger King is sticking with it. However, BK is now offering a new twist, the Spicy Chicken Sandwich. It's the same as the Original, but with cayenne pepper and other spices added to the breading, with the usual shredded lettuce and mayonnaise -- all on a sesame seed bun.

The Spicy Chicken Sandwich is available on Burger King's "2 for $5 Menu," along with the Original Chicken Sandwich, BIG KING, and Alaskan Fish Sandwich. The menu is available through March 2. The Spicy Chicken Sandwich alone costs $3.79.

First, ask yourself if you would take advantage of any of these offers. This is a good indication of what the average consumer thinks. Next, ask yourself if anyone you know would. If the answer is no, then Burger King hasn't done enough to drive consumers to its restaurants. If you're not a fan of Burger King, but you're well aware that millions of people enjoy fast food, then think about which restaurant an on-the-fence consumer would choose between Burger King and Wendy's based on recent offerings.

And in this corner: Spicy Chipotle Crispy Chicken Sandwich
The Spicy Chipotle Crispy Chicken Sandwich at Wendy's, as well as the Spicy Chipotle Jr. Cheeseburger, costs just $0.99. If today's economic environment features a value-conscious consumer, then they're more likely to opt for this spicy chicken sandwich versus the one Burger King offers. Based on the price differential, it's also possible for Wendy's to steal customers from Burger King.

Both of Wendy's limited-time-offer sandwiches (no end date determined yet) come with melted pepper jack cheese and jalapenos. According to its press release, Wendy's went this route partially because of Technomic's 2013 Flavor Consumer Trend Report, which indicated that 54% of U.S. consumers prefer spicy food over mild food.

The Spicy Chipotle Crispy Chicken Sandwich is on the "Right Price Right Size Menu." The low prices for these menu items might make you think that this initiative isn't good for the bottom line -- and you would be somewhat correct. But take into account that Wendy's uses this approach to get people into its restaurants. Then, its menu also offers several higher-priced options, which some customers take advantage of.

Burger King and Wendy's both seem to present good potential with their limited-time spicy chicken offerings, especially Wendy's based on its upselling strategy. But these initiatives are still small in comparison to McDonald's most recent initiative. 

#CheersToSochi
McDonald's CheersToSochi campaign allows fans to send tweets to their favorite Olympic athletes or teams using the #CheersToSochi hashtag on Twitter. These tweets show up in the Athletes' Village in Sochi on a display. The athletes will then have an opportunity to print their favorite, or most motivational, tweet on a ribbon for their wrist. They might also tweet back. 

This is McDonald's most recent initiative in its 38-year relationship with the Olympic Games. The following athletes are encouraging people to take advantage of this program because it will lead to motivation and support from back home: Patrick Kane (U.S. hockey), Drew Doughty (Canada hockey), Shani Davis (U.S. speed skating), and Patrick Chan (Canada figure skating). 

This is a unique approach by McDonald's, and it could pay off in a big way. It might act as a way for McDonald's to connect better with some millennials, which is a generation it's highly focused on. Also keep in mind that despite McDonald's having been associated with the Olympics for 38 years, every time the Olympics is held in a new location, it improves brand recognition there. McDonald's might be a massive company and very mature, but there are still many new customers to win over.

The Foolish takeaway
If you're looking to invest in a stable fast-food restaurant that continues to grow at a methodical pace while finding ways to increase its brand's global exposure, then you might want to consider McDonald's. If you would prefer to invest in a restaurant that is outmaneuvering its peers in the form of menu innovation and upsells, then you should consider Wendy's. Please do your own research prior to investing. 

Big secrets can lead to massive profits 
Do you hate your bank? If you're like most Americans, chances are good that you answered yes to that question. While that's not great news for consumers, it certainly creates opportunity for savvy investors. That's because there's a new company that's revolutionizing banking, and is poised to kill the hated traditional brick-and-mortar banking model. And amazingly, despite its rapid growth, this company is still flying under the radar of Wall Street. For the name and details on this company, click here to access our new special free report.

 

Fool contributor Dan Moskowitz has no position in any stocks mentioned. The Motley Fool recommends Burger King Worldwide, McDonald's, and Twitter. The Motley Fool owns shares of McDonald's. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.

 


Compare Brokers