Wendy's 2008 Annual Report Download - page 50

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Restaurant Margin: Fourth Quarter 2008
Wendy’s . . .............................. 11.7%
Full Year 2008 2007
Arby’s ................................... 16.1% 19.7%
Restaurant count: Company-owned Franchised Systemwide
Wendy’s restaurant count (a):
Restaurant count at September 29, 2008 ................ 1,404 5,221 6,625
Opened since September 29, 2008 ...................... 6 32 38
Closed since September 29, 2008 ....................... (5) (28) (33)
Net purchased from (sold by) franchisees since
September 29, 2008................................. 1 (1) —
Restaurant count at December 28, 2008 .............. 1,406 5,224 6,630
Arby’s restaurant count:
Restaurant count at December 30, 2007................. 1,106 2,582 3,688
Opened in 2008 ...................................... 40 87 127
Closed in 2008 ....................................... (15) (44) (59)
Net purchased from (sold by) franchisees in 2008 ........ 45 (45) —
Restaurant count at December 28, 2008 .............. 1,176 2,580 3,756
Total Wendy’s/Arby’s restaurant count at
December 28, 2008............................. 2,582 7,804 10,386
2008 2007
Company-owned average unit volumes: (in millions)
Wendy’s—North America ..................................... $ 1,452.9 $1,436.7
Arby’s—North America ....................................... $ 966.9 $1,016.0
(a) Wendy’s data, other than average unit volumes, is only for the period commencing with the September 29,
2008 merger date through the end of the fiscal year.
2008 Compared with 2007
Sales
Our sales, which were generated primarily from our Company-owned restaurants, increased $548.9
million, or 49.3%, to $1,662.3 million for 2008 from $1,113.4 million for 2007. The increase in sales is
primarily due to the Wendy’s Merger which added 1,406 net Company-owned restaurants to the
Wendy’s/Arby’s restaurant system and generated $530.8 million in sales during the fourth quarter. Excluding
Wendy’s, sales increased $18.1 million, which is attributable to the $80.0 million increase in sales from the 70
net Arby’s Company-owned restaurants added since December 30, 2007 and substantially offset by a $62.0
million decrease in sales due to a 5.8% decrease in Arby’s Company-owned same-store sales. Of the 45 net
restaurants acquired from franchisees, 41 are in the California market (the “California Restaurants”) and were
purchased from a franchisee on January 14, 2008 (the “California Restaurant Acquisition”). The California
Restaurants generated approximately $36.0 million of sales in 2008. Same store sales of our Arby’s Company-
owned restaurants were primarily impacted by the effect of deterioration of economic conditions in 2008 which
resulted in decreases in consumers’ discretionary income, reduced consumer confidence in the economy,
continued discounting by our competitors, and high unemployment levels. As a result of these factors, we have
experienced an escalating decline in customer traffic and lower sales volumes. In addition, when compared to
the prior year, Arby’s executed marketing campaigns that were not as effective in reinforcing consumers’
perception of our value position in the QSR marketplace.
42