False claims made against Wendy’s could have ruined their reputation, but they successfully fought to protect it.
In 2005, Wendy’s was faced with an all too common crisis in the restaurant industry when a woman made a fake claim that cost millions of dollars in sales and could have damaged their reputation severely.
Anna Ayala reported finding a piece of a finger in her bowl of chili from a Wendy’s restaurant in California and the company faced the threat of an extremely large lawsuit. Although the claim ended up being just a hoax in attempt to receive money, Wendy’s CEO Jack Schuessler reported that whole scheme still ended up having a significant impact on their sales, reputation, and employees.
In an interview with Ron Insana for the USA TODAY, Schuessler commented on their loss: “We’re figuring 2.5% of sales, or about $15 million from March 23 through the end of April. But besides that, it’s the pride you have in your company. These were independent franchisees that got caught in the middle. The employees had fewer hours because of fewer sales.”
Schuessler also reported that paying Ayala to keep quiet about the supposed incident was never an option. The company focused more on upholding the reputation that they had already earned rather than giving in to what Ayala wanted. Although the claim could have been seriously damaging, Wendy’s as a corporation was open and honest with the public about the incident.
The corporation conducted a thorough investigation to ensure that the claim was a fake. Schuessler said that employees at the franchise where the finger was claimed to be found were tested via polygraph and the whole restaurant was thoroughly inspected. According to Schuessler, he knew it was obviously a fake claim when the polygraph results came back and it was clear that no one was missing any parts of their fingers.
Coming back from any crisis is always a challenge, especially when it immediately affects a company’s business. In response to this instance, several Wendy’s locations in the San Francisco Bay area spent a weekend in April after the incident giving away free frosties as a way to try to encourage customers to return to the restaurants. Because Wendy’s was openly honest about the situation with the public and the media, there was little damage done to the famous restaurant chain’s reputation.
Schuessler also took the whole thing to be a learning experience, which is the best thing that could be done in any crisis situation. “And the lesson is you’ve got to be on your guard, but even with that, this thing is so fragile that one has to be able to respond. One has to have a set of core values in order to respond, because there’s no playbook that’s been written for events like these,” said Schuessler.