Wendy's 2011 Annual Report Download - page 8

Business Segments
The Wendy’s Company and Wendy’s Restaurants manage and internally report their business geographically.
The operation and franchising of Wendy’s restaurants in North America (defined as the United States and Canada)
comprises virtually all of our current operations and represents a single reportable segment. The revenues and
operating results of Wendy’s restaurants outside of North America (including through our joint venture in Japan) are
not material.
References herein to The Wendy’s Company corporate (“Corporate”) represent The Wendy’s Company parent
company only functions and their effect on the Company’s consolidated results of operations and financial condition.
See Note 28 of the Financial Statements and Supplementary Data included in Item 8 herein, for financial
information attributable to our geographic areas.
The Wendy’s Restaurant System
Wendy’s is the world’s third largest quick-service restaurant company in the hamburger sandwich segment.
Wendy’s is primarily engaged in the business of operating, developing and franchising a system of distinctive
quick-service restaurants serving high quality food. At January 1, 2012, there were 6,244 Wendy’s restaurants in
operation in North America. Of these restaurants, 1,417 were operated by Wendy’s and 4,827 by a total of 454
franchisees. In addition, at January 1, 2012, there were 350 franchised Wendy’s restaurants in operation in 26
countries and territories other than North America. See “Item 2. Properties” for a listing of the number of company-
owned and franchised locations in the United States and in foreign countries and United States territories.
The revenues from our restaurant business are derived from three principal sources: (1) sales at company-owned
restaurants; (2) sales of bakery items; and (3) franchise royalties received from Wendy’s franchised restaurants.
Wendy’s is also a 50% partner in a Canadian restaurant real estate joint venture with Tim Hortons Inc., a
quick-service restaurant chain specializing in coffee, baked goods and homestyle lunches. The joint venture owns
Wendy’s/Tim Hortons combo units in Canada. As of January 2, 2011, there were 105 Wendy’s restaurants in
operation that were owned by the joint venture.
During the second quarter of 2011, Wendy’s became a 49% partner in a joint venture for the operation of
Wendy’s restaurants in Japan. This joint venture opened its first restaurant in December 2011.
Wendy’s Restaurants
Wendy’s opened its first restaurant in Columbus, Ohio in 1969. During 2011, Wendy’s opened 20 new
company-owned restaurants and closed 15 generally underperforming company-owned restaurants. In addition,
Wendy’s purchased 18 restaurants from its franchisees. During 2011, Wendy’s franchisees opened 69 new restaurants
and closed 56 generally underperforming restaurants. In 2009, 71 franchised restaurants were closed in Japan at
year-end upon the expiration of the related franchise agreement.
The following table sets forth the number of Wendy’s restaurants at the beginning and end of each year from
2009 to 2011:
2011 2010 2009
Restaurants open at beginning of period ..................... 6,576 6,541 6,630
Restaurants opened during period .......................... 89 78 63
Restaurants closed during period ........................... (71) (43) (152)
Restaurants open at end of period .......................... 6,594 6,576 6,541
During the period from December 29, 2008, through January 1, 2012, 230 Wendy’s restaurants were opened
and 266 generally underperforming Wendy’s restaurants were closed.
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