Wendy's holds the upper hand in the eternal struggle between fast food heavyweights, CNBC's Jim Cramer said Monday.
Posting better-than-expecting preliminary fourth-quarter earnings Monday morning, Wendy's appears fresher than its chief rival—McDonald's— as new offerings and a changing menu carve out a space somewhere between fast food and fast casual, according to Cramer. The optimism comes several days after UBS downgraded Wendy's stock with a "sell" rating, a move that Cramer questioned.
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On Monday, Cramer went further and contended that Wendy's had plenty of room for growth, unlike its rival.
"Why the heck was everyone so negative about this one?" Cramer said on "Squawk on the Street." "I think there are a lot of people that feel that there's no room for them. That's untrue. There's plenty of room."
(Read more: Cramer: Wendy's downgrade and these others make no sense)
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Wendy's represents a "third-way" between McDonald's and fast casual chain Panera Bread, Cramer said, calling it "fresh and juicy." Recently remodeled restaurants are another selling point, Cramer added. In its most recent earnings report, Wendy's attributed its strong fourth-quarter growth to new pretzel bun burgers and other menu items that help it compete with chains such as Chipotle Mexican Grill.
"The one that is stressed out is McDonald's," Cramer said. "McDonald's has to come up with a formula so that people feel it's got fresher products."
Disclosure: Cramer's charitable trust owns shares of Yum Brands, the fast-food company that operates KFC, Pizza Hut and Taco Bell.
—By CNBC's Jeff Morganteen. Follow him on Twitter at @jmorganteen and get the latest stories from "Squawk on the Street." The Associated Press contributed to this report.
