Wendy's orders Coke
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August 24, 1998: 10:34 a.m. ET
Fast food chain tells franchisees to stop serving Pepsi under new pact
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NEW YORK (CNNfn) - Serving up an icy send-off for soft drink competitor PepsiCo Inc., Wendy's International Monday selected Coca-Cola Co. as its supplier of choice for the transition into the 21st century.
Under terms of the deal, details of which weren't disclosed, Wendy's agreed to use Coke as its exclusive supplier for the next 10 years and said franchisees no longer will be able to choose either Coke or Pepsi products in their stores. Franchise stores that serve Pepsi have been ordered to switch to Coke.
Pepsi, which has taken Wendy's to court before, has said publicly it has no plans to go down quietly. The company said it is preparing a sizable counter-offer to stay in the game.
Wendy's spokesman Denny Lynch said the company isn't surprised by Pepsi's statement. But, he said, Wendy's new relationship with Coke goes beyond dollars and cents.
According to Lynch, it is part of a long-term partnership of marketing and service.
Atlanta-based Coke (KO) has supplied the roughly 900 Wendy's company-owned stores in the U.S. and most of its 3,700 franchise stores for years. However, PepsiCo has persuaded some Wendy's franchisees to switch to Pepsi.
Pepsi (PEP) was the primary soft-drink supplier to Wendy's in the 1970s and early 1980s, but lost that status after the company began buying up fast-food chain competitors, including Pizza Hut, Taco Bell and KFC.
At the time, Wendy's tried to replace Pepsi with Coke, but agreed to compromise in an out-of-court settlement after Pepsi filed suit.
Last year, PepsiCo spun off its fast-food chains as a separate, publicly held company.
There are more than 5,200 Wendy's restaurants worldwide and 1,500 Tim Hortons restaurants in Canada and the U.S., with combined sales reaching nearly $6 billion. Wendy's merged with Tim Hortons, the second-largest quick service restaurant chain in Canada, in 1995.
Shares of Wendy's (WEN) were up ¼ at 21-3/4 early Monday on the New York Stock Exchange.
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PepsiCo
Coca-Cola
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