Wendy's 2009 Annual Report Download - page 11

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(3) franchise royalties received from all Wendy’s franchised restaurants; and (4) up-front franchise fees from
restaurant operators for each new unit opened.
Wendy’s is also a partner in a Canadian restaurant real estate joint venture with Tim Hortons, Inc. The
joint venture owns Wendy’s/Tim Hortons combo units in Canada. As of January 3, 2010, there were 105
Wendy’s restaurants in operation that were owned by the joint venture. The Tim Hortons menu includes
premium coffee, flavored cappuccinos, specialty teas, home-style soups, fresh sandwiches and fresh baked goods.
Wendy’s Restaurants
Wendy’s opened its first restaurant in Columbus, Ohio in 1969. During 2009, Wendy’s opened 10 new
restaurants and closed 13 generally underperforming restaurants. In addition, Wendy’s sold 12 Company-
owned restaurants to its franchisees. During 2009, Wendy’s franchisees opened 53 new restaurants and closed
68 generally underperforming restaurants. In addition, 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 2007 to 2009:
2009 2008 2007
Restaurants open at beginning of period. . . . . . . . . . . . . . . . . . . . . . 6,630 6,645 6,673
Restaurants opened during period. . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 97 92
Restaurants closed during period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . (152) (112) (120)
Restaurants open at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,541 6,630 6,645
During the period from January 1, 2007, through January 3, 2010, 252 Wendy’s restaurants were opened
and 384 generally underperforming Wendy’s restaurants were closed.
Operations
Each Wendy’s restaurant offers a relatively standard menu featuring hamburgers and filet of chicken
breast sandwiches, which are prepared to order with the customer’s choice of condiments. Wendy’s menu also
includes chicken nuggets, chili, baked and french fried potatoes, freshly prepared salads, soft drinks, milk,
Frostydesserts, floats and kids’ meals. In addition, the restaurants sell a variety of promotional products on a
limited basis.
Free-standing Wendy’s restaurants generally include a pick-up window in addition to a dining room. The
percentage of sales at company-owned Wendy’s restaurants through the pick-up window was 64.6% and
63.8% in 2009 and 2008, respectively.
Wendy’s strives to maintain quality and uniformity throughout all restaurants by publishing detailed
specifications for food products, preparation and service, continual in-service training of employees, restaurant
reviews and field visits from Wendy’s supervisors. In the case of franchisees, field visits are made by Wendy’s
personnel who review operations, including quality, service and cleanliness and make recommendations to
assist in compliance with Wendy’s specifications.
Generally, Wendy’s does not sell food or supplies, other than sandwich buns and kids’ meal toys, to its
franchisees. However, prior to 2010 Wendy’s arranged for volume purchases of many food and supply products.
Commencing in 2010 the purchasing function was transferred to a new purchasing co-op as described below in
“Raw Materials and Purchasing.”
The New Bakery Co. of Ohio, Inc. (“Bakery”), a wholly-owned subsidiary of Wendy’s, is a producer of
buns for some Wendy’s restaurants, and to a lesser extent for other outside parties, including certain
distributors to the Arby’s system. At January 3, 2010, the Bakery supplied 692 restaurants operated by
Wendy’s and 2,476 restaurants operated by franchisees. The Bakery also manufactures and sells some products
to customers in the grocery and other food service businesses.
See Note 25 of the Financial Statements and Supplementary Data included in Item 8 herein, for financial
information attributable to certain geographical areas.
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