They have links pointing to all their individual store pages on the locations subdomain already. Google knows that subdomain exists, and when crawling a larger directory it will find those pages just fine. The internal linking is actually pretty messy to follow. You have location subfolders nested under different subdomains. For the most part, every tab on the menu directs to a different subdomain. They should actually go through their menu and update links, since i'm seeing a lot of 301's....
For a majority of businesses out there, this setup would backfire. Think of how well known the Wendy's brand is, and how large they are. Also think about the overall goal for their site. It's not like Wendy's is trying to get blog posts to rank and drive traffic to the site. How many people are looking for information about their cheeseburgers? They really just care about showing up well in Google Maps so people can get driving directions to the closest store.
For SEO benefit, I would expect that a sub folder would have been a much better decision. However from an architecture standpoint, subdomains seem like a better choice.
Thoughts?
This kind of goes back to my point about access. It's easier to give more restricted access to a subdomain than it is for the full domain, and hope an outside vendor stays within a certain folder. This is enterprise SEO, so a majority of companies in the fast food space are using an outside vendor to manage local pages on the store. Even if they are doing everything in-house, they would restrict access to a certain team within the company.
If done right, there is no difference between hosting pages on a subdomain vs a folder under the main domain. It all comes down to available resources. You need to treat a subdomain like a separate site, so if you have a team dedicated to working on SEO for that subdomain then it can work fine. The reason we typically tell businesses to host under the main domain is because they usually don't have internal resources or the budget to manage two sites effectively.
I think this debate is very different given this is a enterprise franchise store business model, and many other case studies on the topic explored the use of a
blog or resource section of a site within a subdomain or subfolder. To me that is a very critical difference that people need to consider.
The primary goal for locations.wendys.com is to rank in Google Maps. Since the goal is to drive in-store traffic to buy fast food, as long as Wendy's is in the maps they're happy. If you go directly to the site to look for nearby stores, the find.wendys.com subdomain has a much better user experience so it looks like that's managed by a different team.