THE FUTURE OF WENDY'S EXPANSION IN ARGENTINA (CIRCA 1998): A CASE ANALYSIS
Wendy's, an American fast-food chain, extended its international expansion program to Argentina in 1995. Near the close of 1997, Wendy's had only 11 outlets operating in Argentina. In spite of the fact that the title of the case analyzes in this paper is Wendy's Franchising in Argentina, none of the 11 restaurants Wendy's operated in Argentina in 1997 were franchise operations. Rather, all were company owned and operated restaurants that Wendy's acquired from its joint venture partner in the country ยท Argentinean fast-food chain Pumper Nic.
Near the close of 1997, Wendy's presence in Argentina in terms of the number of restaurants operating, as well as in terms of the company's relative position in the Argentinean market with respect to McDonald's (the American-based world leader in hamburger restaurants), was unsatisfactory from Wendy's perspective. The big policy issue confronting Wendy's in late-1997/early-1998 in relation to Argentina was whether the company should continue its expansion in the country and, if so, how the expansion should occur.
Relevant Issues (Big Issues Surrounding the Question)
A number of relevant issues were associated with the policy question concerning the continuation of Wendy's expansion in Argentina. One important issue concerns Argentina's risk profile [e.g., the level of exposure that a foreign company faces when operating in the country). A second important issue concerns the status of any new Wendy's restaurants in Argentina. Within this context of this issue, the options are (a) company-owned operations (the status of the existing 11 Wendy's operations in Argentina) or (b) franchise operations. The company-owned versus franchise issue affects other issues surrounding the policy question concerning Wendy's continued expansion in Argentina. These additional issues are as follows:
The critical number of ...