Wendy's 2013 Annual Report Download - page 16

Consumer concerns regarding the nutritional aspects of beef, poultry, french fries or other products we sell,
concerns regarding the ingredients in our products and/or cooking processes used in our restaurants, or concerns
regarding the effects of disease outbreaks such as “mad cow disease” and avian influenza or “bird flu,” could
affect demand for our products.
Consumer concerns regarding the nutritional aspects of beef, poultry, french fries or other products we sell,
concerns regarding the ingredients in our products and/or cooking processes used in our restaurants, or concerns
regarding the effects of disease outbreaks such as “mad cow disease” and avian influenza or “bird flu,” could result in
less demand for our products and a decline in sales at company-owned restaurants and in royalties from sales at
franchised restaurants.
Increased use of social media could create and/or amplify the effects of negative publicity and adversely affect
sales and operating results.
Events reported in the media, including social media, whether or not accurate or involving Wendy’s, could
create and/or amplify negative publicity for Wendy’s or for the industry or market segments in which we operate.
This could reduce demand for Wendy’s food and could result in a decrease in guest traffic to our restaurants as
consumers shift their preferences to our competitors or to other products or food types. A decrease in guest traffic to
our restaurants as a result of negative publicity from social media could result in a decline in sales and operating results
at company-owned restaurants or in royalties from sales at franchised restaurants.
Growth of our restaurant businesses is dependent on new restaurant openings, which may be affected by factors
beyond our control.
Our restaurant businesses derive earnings from sales at company-owned restaurants, franchise royalties received
from franchised restaurants and franchise fees from franchise restaurant operators for each new unit opened. Growth
in our restaurant revenues and earnings is dependent on new restaurant openings. Numerous factors beyond our
control may affect restaurant openings. These factors include but are not limited to:
• our ability to attract new franchisees;
• the availability of site locations for new restaurants;
• the ability of potential restaurant owners to obtain financing;
• the ability of restaurant owners to hire, train and retain qualified operating personnel;
• construction and development costs of new restaurants, particularly in highly-competitive markets;
• the ability of restaurant owners to secure required governmental approvals and permits in a timely manner, or
at all; and
• adverse weather conditions.
Wendy’s franchisees could take actions that could harm our business.
Wendy’s franchisees are contractually obligated to operate their restaurants in accordance with the standards set
forth in agreements with them. Wendy’s also provides training and support to franchisees. However, franchisees are
independent third parties that we do not control, and the franchisees own, operate and oversee the daily operations of
their restaurants. As a result, the ultimate success and quality of any franchise restaurant rests with the franchisee. If
franchisees do not successfully operate restaurants in a manner consistent with required standards, royalty payments to
us will be adversely affected and the brand’s image and reputation could be harmed, which in turn could hurt our
business and operating results.
Our success depends on franchisees’ participation in brand strategies.
Wendy’s franchisees are an integral part of our business. Wendy’s may be unable to successfully implement the
strategies that it believes are necessary for further growth if franchisees do not participate in that implementation. Our
business and operating results could be adversely affected if a significant number of franchisees do not participate in
brand strategies.
12