How Wendy's is breaking its bad-luck streak with breakfast

Perhaps the third time is the charm?

Wendy’s is rolling out a breakfast menu in 2020 for the third time over the past few decades, despite disappointing results in the past.

This time, however, the Dublin, Ohio-based fast food franchise believes that breakfast will end up accounting for 10 percent of the burger chain’s daytime sales, which would make Wendy’s breakfast a $1 billion business in the U.S., according to Restaurant Business Online.

The move likely stems from the fact that Wendy’s biggest competitors, McDonald’s and Burger King, have long since successfully implemented breakfast menus. Wendy’s executives claim that doing the same wouldn't take away anything from their existing business and would generate new sales.

“We’re absolutely confident this is going to work,” CEO Todd Penegor told investors on Friday.

Previous attempts to add breakfast to Wendy’s menus were ultimately too expensive, with the equipment costing nearly $10,000 per location, said Kurt Kane, president of the company's U.S. business. A region-by-region launch rather than a national rollout compounded the challenges, according to Restaurant Business Online.

“We didn’t have scale behind it,” Kane said. This time, the company will be going nationwide right out of the gate, with heavy promotion and advertising.

“We’ll put full media power behind the breakfast,” Kane said, while adding that the increased national advertising will build breakfast sales quickly.

The chain has included its franchises, which make up 95 percent of Wendy’s U.S. restaurants, in preparations for the launch, he added.

Restaurant Business Online reports that Wendy’s breakfast menu will be centered on drive-thru customers instead of those dining in, as most breakfast buyers order on their way to work. Kane said breakfast test-runs at 300 Wendy's locations this year haven’t resulted in any financial losses.

Wendy’s will also be paring down its breakfast-item ingredients from 45 to 18, with no new equipment required and as few as three employees needed.

Instead of licensing another brand’s coffee, Wendy’s will develop its own blend,and most of the new menu will consist of breakfast sandwiches, many of which will use existing products such as the “Breakfast Baconator.”

Wendy’s, which generated $9.4 billion in sales last year, says that it will not serve breakfast all day like some of its fast-food competitors, to avoid doing too much at once.