Same economy. Same consumer. Same quarter. McDonald's surged +6.8%, Tim Hortons posted its 19th straight win, and Wendy's collapsed −11.3%. The fast food value war didn't create losers — it revealed them.
In the fourth quarter of 2025, three fast food companies faced the same inflation-weary consumer, the same rising costs, and the same competitive pressure. What they did with those conditions produced one of the widest performance divergences in QSR history.
McDonald's posted U.S. same-store sales growth of 6.8%, beating Wall Street estimates by nearly three points.[5] Its Grinch Meal promotion delivered the highest single sales day in company history. Systemwide sales hit $139 billion. The company announced plans to open 2,600 new restaurants in 2026.[6]
Tim Hortons quietly extended its streak to 19 consecutive quarters of positive comparable sales in Canada, outperforming the Canadian QSR industry by nearly two points. Revenue climbed 10.6% to $1.14 billion. Cold beverage sales surged 8.6% — the highest Q4 cold mix on record. The brand resumed net restaurant growth in Canada for the first time since 2021.[8]
Then there was Wendy's. U.S. same-store sales fell 11.3% in Q4.[1] The company announced it would close 300 to 358 restaurants — 5% to 6% of its domestic footprint — in the first half of 2026.[2] Interim CEO Ken Cook called 2026 a “rebuilding year” and admitted the company had misread its customers: it had swung too far toward niche limited-time promotions instead of everyday value.[3]
The 18-point gap between McDonald's and Wendy's isn't a story about a bad quarter. It's a diagnostic cascade — a textbook case of how strategic choices compound across every dimension of a business, and how the same economic headwinds that crush one company can be harnessed by another.
“Learning from 2025 around value, we swung the pendulum too far towards limited-time price promotions instead of everyday value.”
— Ken Cook, Interim CEO, Wendy's[3]
First wave of closures signals structural trouble. Value-conscious consumers begin shifting to competitors offering clearer everyday deals.[2]
Wendy'sPermanent value architecture with $5 and $8 meal deals. McDonald's absorbs part of the cost to win back low-income consumers — a deliberate strategic bet that competitors don't match.[6]
McDonald'sDesigned to attract younger consumers, the niche partnership underperforms in both sales and traffic. Company later admits promotions aimed at “adventurous eaters” don't resonate with its core customer base.[1]
Wendy'sBreakfast food sales up 3.5%. Cold beverages up 8.6% in Q4 — highest cold mix on record for the period. Brand continues its “steady and durable” approach without dramatic pivots.[8]
Tim HortonsNew combo deals across breakfast, lunch, and dinner. CFO confirms U.S. franchisee cash flow grew year-over-year despite heavier value investment.[6]
McDonald'sTurnaround strategy unveiled to “revitalize the brand, reignite growth, and accelerate profitability.” Signals mass closures are coming. Franchise community braces.[4]
Wendy'sHighest single sales day in McDonald's history. 50 million pairs of Grinch socks sold globally. Combined with Monopoly, it drove the widest comparable guest count gap to competitors in recent history.[5]
McDonald'sWendy's operational contraction is the origin event. But the cascade doesn't stop at store closures — it traces through revenue, quality, employee, and customer dimensions, each amplified by the competitive success of McDonald's and Tim Hortons in the same market.
| Dimension | What Happened | Cascade Effect |
|---|---|---|
| Operational (D6)Origin Layer | Wendy's closing 300–358 U.S. locations in H1 2026 (5–6% of footprint). Project Fresh restructuring launched. McDonald's simultaneously opening 2,600 new stores with $3.7–3.9B capex.[2][5] System Restructuring | Opposing footprint trajectories: −358 vs. +2,600. Wendy's redeploying capital to fewer, stronger locations while McDonald's scales aggressively. |
| Revenue (D3)L1 Cascade | Wendy's U.S. same-store sales fell 5.2% for full year 2025; Q4 dropped 11.3%. Closures will drag adjusted EBITDA $15–20M. McDonald's revenue climbed 10% to $7.01B; systemwide sales hit $139B.[1][5] Revenue Divergence | McDonald's EPS beat by 3%. Wendy's guided flat 2026 systemwide sales and called it a “rebuilding year.” Tim Hortons revenue +10.6%.[8] |
| Quality (D5)L1 Cascade | Wendy's admitted zero hamburger innovation in 2025. Takis collab flopped. McDonald's Grinch Meal set all-time record; Monopoly drove 500M+ games played. Tim Hortons innovated with cracked eggs, Biscoff drinks, cold beverage surge.[1][5] Menu Strategy | McDonald's Grinch Meal = highest sales day ever. Wendy's now pivoting to Cheesy Bacon Cheeseburger and new chicken sandwich to restore core relevance.[3] |
| Customer (D1)L2 Cascade | McDonald's gained share with low-income consumers through value leadership. Loyalty users reached 210M globally, up 19%. Wendy's lost traffic and admitted its core customers weren't planned visitors — highlighting brand relevance gap.[5][1] Value Perception | McDonald's achieved highest quarterly guest count gap to competitors in recent history. Wendy's launching Biggie Deals ($4/$6/$8) to rebuild trust.[3] |
| Employee (D2)L1 Cascade | 300+ Wendy's locations closing displaces franchise workforce across suburban and small-town America. McDonald's hiring for 2,600 new locations globally. Tim Hortons expanding U.S. footprint at fastest rate in a decade.[2] Workforce Displacement | Closures concentrated in secondary suburban and small-town locations where franchisees saw steepest sales drops. Employment gap widens between expanding and contracting chains. |
| Regulatory (D4)L2 Cascade | Tim Hortons faces tariff headwinds on coffee commodities. Wendy's navigating franchise law implications of mass closures — lease exits, negotiated terminations, labor obligations.[9] Franchise & Trade | Lower direct impact, but franchise regulatory exposure increases as closures accelerate. Tim Hortons absorbing commodity cost pressure while maintaining franchisee EBITDA ~CAD 295K.[9] |
The diagnostic power of this case comes from the natural experiment: three QSR brands operating in overlapping markets, facing the same macro headwinds, executing fundamentally different strategies.
Absorbed cost of $5/$8 deals. Invested in buzzy promotions (Grinch, Monopoly). Built 210M loyalty users. Bet that winning traffic share in a downturn compounds into long-term market dominance. Result: highest guest count gap to competitors in recent history.
Leaned into core strengths: breakfast, coffee, Canadian identity. Innovated within lanes (cold beverages, cracked eggs, Biscoff). Didn't chase trends or panic. 19 consecutive positive quarters. Expanded cautiously into U.S. and PM daypart.
Chased niche audiences (Takis collab). Zero hamburger innovation in 2025. Overindexed on limited-time promos at the expense of everyday value. Lost core customer who visits unplanned. Now rebuilding from a contracted base.
| Metric | McDonald's | Tim Hortons | Wendy's |
|---|---|---|---|
| Q4 2025 Same-Store Sales | +6.8% | +2.8% | −11.3% |
| Q4 Revenue | $7.01B (+10%) | $1.14B (+10.6%) | Below prior year |
| 2026 Store Trajectory | +2,600 new | Net growth resumed | −300 to −358 |
| CEO Signal | “Value leadership is working” | “Strength and durability” | “Rebuilding year” |
| Key Bet | Scale + value + loyalty | Core identity + category expansion | Project Fresh turnaround |
“McDonald's value leadership is working. By listening to customers and taking action, we have improved traffic and strengthened our value & affordability scores.”
— Chris Kempczinski, CEO, McDonald's[5]
McDonald's built permanent value structures (McValue platform, Extra Value Meals) while absorbing costs. Wendy's ran temporary price promotions. The distinction between value as identity and value as tactic produced an 18-point same-store sales gap in one quarter.
Wendy's own consumer research revealed most visits are unplanned — yet it chased “adventurous eaters” with a Takis collab. Tim Hortons stuck to breakfast and coffee. McDonald's doubled down on affordability for price-sensitive diners. Both winners knew who they were serving.
Tim Hortons generated no viral moments, no record-breaking promotions, and no dramatic pivots — just 19 consecutive quarters of positive comps. In a sector obsessed with buzzy campaigns, the steady hand may be the most undervalued strategy.
Wendy's closed 240 locations in 2024 and is closing 300+ more in 2026. Each closure removes a customer touchpoint, displaces employees, and weakens franchise economics — a self-reinforcing diagnostic spiral that's harder to reverse than to start.
Most organizations see competitive pressure as external. The 6D Foraging Methodology™ reveals how strategic choices cascade across all six dimensions — and why the same headwinds create winners and losers.