Eleven years after closing down its 18 Argentine outlets leaving 800 employees redundant, US fast-food chain Wendy’s is set to reopen in Buenos Aires after signing a franchise deal with local company Desarollos Gastronómicos.
Planned for launch later this year in the capital, the long-term aim is for Desarollos Gastronómicos to open 50 franchises over the next 10 years.
Desarrollos Gastronómicos, which belongs to the D&G investment fund, owns and operates 181 Havanna Cafés and franchises in Argentina and eight other Latin American countries. The deal with Wendy’s was completed late on Wednesday night.
Talking about the fast-food chain’s return, Wendy’s chief executive Roland Smith said yesterday: “‘Argentina is the latest example of the meaningful progress that we are making in the acceleration of our international expansion efforts.”
Since 2009, the chain has finalized long-term franchise deals in the Middle East and North Africa as well as in Singapore, Turkey and Russia.
D&G is headed by Chrystian Colombo, a Cabinet chief during President Fernando de la Rúa’s administration, and former Citibank bankers Guillermo Stanley and Carlos Giovanelli. Stanley spoke to the Herald about the fund’s venture.
“Wendy’s approached us as we run the Havanna Café franchises and it is the most important coffee chain in Argentina so that was an important issue, going forward, for Wendy’s,” said Stanley.
Grilling square-shaped hamburgers is not D&G’s first foray in fast food. Last October, the fund said it was bringing back Pizza Hut, another US franchise which has closed down its Argentine restaurants twice in recent years.
Looking ahead, Stanley added: “We are looking for an appropriate place to open up and will start working with Wendy’s people with regard to the provinces and suppliers.”
Figures weren’t available as to how much is being invested in the chain, according to Stanley. “We don’t have much idea of what the figures will look like as we don’t know whether we are going to buy or rent space as yet. We are in the early stages of putting together the investment fund, although we will have more investors coming into it.” Locations for the first outlet are being mooted, with a shopping mall or prominent downtown corner the likely choices.
Adding another 50 outlets to a global chain that already owns more than 10,000 is dipping a toe in Latin American fast-food ocean, however, Wendy’s is also pursuing opportunities in Brazil where Havanna already operates. The US firm will be hoping to recuperate the US$3.2 million due to the 2000 recession which Clarín reported it lost at that time.
News of Wendy’s return brought mixed views on the ámbito.com website. One poster suggested “boycotting them. No one should go” in support of the 800 employees made redundant overnight in November 2000. Another suggested it was a positive sign, saying “it’s normal for multinationals to return to a developing country to invest what they disinvested during the crisis years.”
First published in the Buenos Aires Herald in January 2011.