Wendy's sells Baja Fresh: back to the beef, and breakfast

The concept of focusing on the "meat" of a business may be both a cliche and an overly carnivorous metaphor, but that doesn't make it any less true. And Wendy's is taking the cliche very literally in today's news, announcing it will sell Baja Fresh and refocus on its core hamburger business.

The renewed focus on burgers makes sense, but Wendy's International (NYSE:WEN) bought Baja Fresh only four years ago for $275 million and will be selling for barely more than 10% of that figure, $31 million, to a consortium of investment firms. That's a pretty miserable return.

Hopefully, however, the sale will allow management to spend some time getting introspective. First, there's the sagging brand. I'd agree that, as QSR Magazine's Sherri Daye Scott says, the brand image is struggling. Wendy's used to be known for its higher quality and spicier menu options compared to other fast food restaurants, and now I can barely tell the difference. When was the last time you felt the yearning for an ice-cold Frosty? In high school (I'll admit), I'd have a few a week. I haven't tasted one for years.

Then there's the menu. Why doesn't Wendy's have breakfast? We've already determined that (yes) fast food customers -- and even many of the health nuts out there -- love breakfast. The restaurant has plans to expand its test to the rest of its outlets this year. Also, Wendy's will be adding a double-melt hamburger, along with more "indulgent" sandwiches.

A lot of this sounds very derivative, picking and choosing from the successes of its competitors' strategies. I don't have a problem with that! Wendy's stock was up $1.39 today, 4.12%, to $35.11 on anticipation of good news.

[Photo diana connolly.]