R. David Thomas, founder and senior chairman of Wendy’s International, Inc., has been called numerous things in his day. His franchisees, citing his barnstorming market tours as a source of inspiration, call him the ‘Great Communicator’. Most of America knows him as the funny, folksy character on - Wendy’s renowned television commercials. Some might even recognize him as the lonely boy from his autobiography, Dave’s Way. But Jim Near, Wendy’s chairman and CEO, sees him as Wendy’s Dad. According to Near, ‘No other chain has an active founder like him leading the way’.
However, few companies can boast a founder as famous and well-liked as Dave Thomas. Ironically, though, such stardom was not among Thomas’ goals. However, after years of virtually non-stop work building the Wendy’s name, Thomas retired from day-to-day management in the early 1980s. “I left the company to people smarter than me to run”, he described. His charming modesty proved to be a liability, though, for, shortly after his departure, franchise problems arose on the heels of the celebrated “Where’s the Beef ?“ television spot that boosted Wendy’s up the fast-food charts. “Funny things occur when people start to make money,” Near noted. “It’s simple to take your mind off what’s significant”. Many of Wendy’s original franchise owners had sold their stores to owners who were not interested in Thomas’ standards of excellence, which had become integral to the restaurant chain. Other owners, supposing the business could run itself, simply left their franchises stranded. Some franchisees television spot for Wendy’s “Spicy Chicken” sandwich featured Thomas sporting what he considered the “wildest tie around”. Always the showman, though, Thomas decided to hold a contest to see if anyone could top his exotic neckwear. “If you got an old tie that’s looking wilder every year, and then send it on in,” he said. “If I think it tops mine, I’ll give you the whole collection of new designer ties.” The winner received a choice of a $ 1,500 neckwear wardrobe, featuring ties by designers such as Armani, Hermes, Nicole Miller, or the cash equivalent. Two runner-ups received a $ 500 collection or the cash equivalent.
Such visibility has not only made. Thomas a famous figure, however it has also helped to shoot Wendy’s profitability and popularity back up and make it one of Wall Street’s favorite restaurants. In 1988, Wendy’s posted an unprecedented $ 5 million loss. By 1994, with the help of ‘‘Dave,’’ Wendy’s claimed 4,200 even decided to go public. Very quickly Wendy’s start to lose its customer-oriented focus and the chain suffered.
Aware that something had to be done, however reluctant to relinquish his hard-earned retirement, Thomas attempted to leave the situation to Near, who had been drafted in year 1986 to become president and COO of the company. Thomas hoped he had found his savior in Near, a board member since 1981- and-one of Wendy’s most successful franchise owners, but Near was less enthusiastic. “This was the last place I wanted to be,” he recalled. “Franchisees had just given management a vote of no confidence. They weren’t even giving them a chance.” However Thomas persisted and finally Near agreed to take over. As a condition of accepting the position, although, Near insisted that Thomas become an active Wendy’s spokesperson and ambassador. Thomas consented and so was born “Dave.”
Though Thomas might have been initially reluctant, he has thrown himself wholeheartedly into the role of Wendy’s figurehead. Maintaining an office next to Near’s, Thomas tours the country regularly for market visits, promotional appearances and television spots. Thomas’ spots have scored consistently high in audience recognition and he has become a favorite of critics. “Wait till you see the latest creative,” praised Near. “We had no idea that Dave would be so good on TV.”
The “Wendy’s Wildest Tie Contest,” which start in April 1994, describes how well Thomas has learned to play his audience. Prior to the contest, a restaurants worldwide and annual sales near $4 billion. Most of the people attribute Wendy’s astonishing comeback to the enthusiasm and energy emanated by their appointed leader. For Thomas himself, though, the success of Wendy’s belongs to those people who helped bring it about his employees. “[I’m] nobody really,” Thomas confessed. “I just make hamburgers for a living.”
Question 1: Is Thomas an effective leader? If so, what makes him effective? If not, why not?
Question 2: Who does Thomas lead?
Question 3: Do you consider Thomas charismatic? Explain why?
Question 4: Are there type of businesses in which Thomas’ style might be less efficient? More efficient?