Cleaning up the Mess

Topic of the Week 13
Crisis Case Study

Although it was a hoax, I still remember the Wendy’s chili crisis like of 2005 like it was yesterday. The catastrophe began when Anna Ayala found a human finger in her bowl of chili at a Wendy’s restaurant located in San Jose, California. When this story was leaked to the media, Wendy’s was forced to act quickly and draw up an effective crisis management strategy in order to soften the oncoming blows they were about to take. Here was their plan according to Public Relations: Strategies and Tactics:
1.Establish that the brand name was not at fault quickly
2. Maintain Wendy’s core values
3. Brief and mobilize employees
4. Build a postincident strategy to enhance Wendy’s brand

Although they did the best they could in this crisis, Wendy’s restaurants lost 20-50% of their business in the San Francisco area and their 6,600 outlets around the nation experienced a large decline in sales.

After 2 months of thorough police investigation, Ayala was found guilty of creating a hoax and grand theft for causing Wendy’s to $2.5 million in revenue. In addition, Ayala was charged 9 years in prison along with steep fines. In order to rebuild their tarnished reputation, Wendy’s rewarded their loyal customers with free Frostie desserts, giving out almost 18 million free treats.

Sadly, Wendy’s reputation was destroyed for a small amount of time because of an enormous lie. After successful image restoration, however, Wendy’s was able to jump back up to one of the most favored fast food chains in America. How did they do it? Wendy’s followed an action plan using the following methods described in Public Relations: Strategies and Tactics:
1. Make progress visible
2. Analyze what went wrong
3. Improve governance structure
4. Make CEO and leadership accessible to media
5. Fire employees involved in problem
6. Commit to high corporate citizenship standards
7. Carefully review ethics policies
8. Hire outside auditors for internal audits
9. Issue an apology from the CEO

For those who aren’t familiar with the Wendy’s Chili Crisis, check out the sketchy Good Morning America interview with Anna Ayala:

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