Wendy’s uses mapping software from Calif. firm Esri to pick new locations

At the Wendy’s corporate headquarters in Dublin, Ohio, real estate director John Crouse is swimming in data about the company’s almost 6,000 fast-food restaurants nationwide.

Crouse and one other colleague are responsible for building and analyzing maps of Wendy’s locations and the surrounding areas. They rely on a geography-based data program to quickly comb through large volumes of information — decades of sales records, demographic descriptions of nearby residents, and other data points — to predict how much a restaurant might take in annually at sites in the United States.

Once Crouse researches a potential site, he submits it to an internal committee; if the location is approved, engineering and construction can proceed.

Wendy’s is one of the latest companies to make use of software from a Redlands, Calif., company called Esri. Esri specializes in mapping various kinds of data — much of it culled from publicly available data sets — to help people visualize relationships, patterns and trends.

Especially since the economic downturn in 2008, many large corporations have been looking to such software — known as “geographic information systems” — to better direct their limited real estate budgets, according to Wayne Gearey, senior vice president for location intelligence at commercial real estate firm Jones Lang LaSalle.

“It’s just starting to become industry standard for [corporate] real estate decisions,” said Gearey, who uses Esri and other mapping services, such as MapInfo’s and Google’s, for his clients.

Retailers are especially concerned about moving to places with ample potential employees, he said. “Once, in retail it was, ‘Where is my customer?’ ” Gearey said. “Now it’s about business operations.”

Mapping software has saved Wendy’s about $750,000 over the past two years that the company said it would have spent on various analytical and market research services.

For instance, Esri’s maps pull Census data to shade neighborhoods based on their average income. This helps Wendy’s determine where customers and employees are likely to be.

“We look where more income is, or less income, and where areas are more concentrated with family households, rather than empty nesters,” Crouse said, though he noted that this is just one element of the decision-making process.

The Wendy’s human resources department is using mapping data to learn about wage requirements and available workers, he said.

“If you’re in a more affluent area, it’s going to be a little tougher to find” employees, Crouse said.

In any location, Wendy’s also considers which other businesses could be co-tenants — for instance, he said, “You’re not going to expect the Wendy’s to be sitting next to Macy’s or Nordstrom, necessarily.”

Even after the location is built, the company is beginning to use demographic data to adjust operations to the local customers, he said.

In relatively high-income areas, industry data suggests that affluent customers “tend to spend more per transaction, in some cases, but they may not come as often,” Crouse said.

Crouse is also beginning to use Esri to map customer complaints. “We know [where] the customers are coming from . . . you can strategize around how to work with the operator — whether it’s a company-[owned] or franchise-[owned] — to correct that problem.”

At some franchise-owned restaurants, for example, owners come up with their own hospitality tactics — such as having staff walking around the restaurants to engage customers, perhaps offering to get them water or help in some other way. While “those are things that are really hard to quantify,” linking them to consumer satisfaction could help the company share best practices with franchise owners across the United States.

Crouse also uses Esri simply to track sales at individual locations. “If our forecasting model said it was going to be a $1 million location, but in reality it is a $750,000 location . . . did the model just miss the mark, or is it an operational problem?”

In many cases, Crouse hypothesized, “You can really pinpoint that it’s the operations. It’s about working with the restaurant itself — it could be as simple as a manager change.”

Mohana Ravindranath covers IT and small business for the Washington Post and its weekly Capital Business publication.
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