Wendy's 2010 Annual Report Download - page 136

WENDY’S/ARBY’S GROUP, INC. AND SUBSIDIARIES
WENDY’S/ARBY’S RESTAURANTS, LLC AND SUBSIDIARIES
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(In Thousands Except Per Share Amounts)
(24) Transactions with Related Parties
The following is a summary of transactions between the Companies and their related parties:
2010 2009 2008
Strategic Sourcing Group agreement (a) .................................. $5,145 $ — $ —
Wendy’s Co-op Agreement (b) ........................................ — 15,500 —
Subleases with related parties (c) ....................................... (346) (213) (227)
Interest income on revolving credit facility (d) ............................. (463) (4) —
AFA dues subsidy (e) ................................................ 2,635 — —
Advisory fees (g) .................................................... 2,465 5,368 —
Charitable contributions to the Dave Thomas Foundation for Adoption (o) ...... — — 1,000
Charitable contributions to Foundation (p) ............................... 500 500 500
(Wendy’s/Arby’s)
Advisory fees (f) .................................................... $1,000 $ — $ —
Services Agreement (h) ............................................... — 3,500 9,500
Sublease income (i) ................................................. (1,632) (1,886) (1,633)
Executive use of corporate aircraft (j) .................................... (120) (613) (3,028)
Sale of helicopter interest (k) .......................................... — — (1,860)
Equities Account (l) ................................................. — — 38
Withdrawal Agreement (m) ........................................... — (37,401) —
Liquidation Services Agreement (n) ..................................... 441 239 —
Distributions to co-investment shareholders (q) ............................ — (795) (2,014)
Transactions with Purchasing Cooperatives, Foundation, and AFA
(a) On April 5, 2010, the Wendy’s independent purchasing cooperative Quality Supply Chain Co-op (“QSCC”)
and the Arby’s independent purchasing cooperative (“ARCOP”), in consultation with Wendy’s/Arby’s
Restaurants, established Strategic Sourcing Group Co-op, LLC (“SSG”). SSG was formed to manage and operate
purchasing programs which combine the purchasing power of both Wendy’s and Arby’s company-owned and
franchised restaurants to create buying efficiencies for certain non-perishable goods, equipment, and services.
In order to facilitate the orderly transition of this purchasing function for the Companies’ North America
operations, Wendy’s/Arby’s Restaurants transferred certain contracts, assets and certain Wendy’s/Arby’s
Restaurants purchasing employees to SSG in the second quarter of 2010. Wendy’s/Arby’s Restaurants had
committed to pay approximately $5,145 of SSG expenses, which were expensed in 2010 and included in
“General and administrative,” and was to be paid over a 24 month period through March 2012. We made
payments of $2,000 in 2010.
Should a sale of Arby’s occur as discussed in Note 1, under the change of control provisions in the agreement that
established SSG, the activities of SSG would be wound up. In the wind up process, the assets, personnel and
functions of SSG would be transferred to QSCC and ARCOP as such parties and Wendy’s/Arby’s Restaurants
agree. In contemplation of a possible sale, the parties are in discussion regarding the dissolution of SSG and
transferring SSG’s assets, personnel and functions to QSCC and ARCOP.
(b) During the 2009 fourth quarter, Wendy’s entered into a purchasing co-op relationship agreement (the “Co-op
Agreement”) to establish QSCC. QSCC manages food and related product purchases and distribution services for
the Wendy’s system in the United States and Canada. Through QSCC, Wendy’s and Wendy’s franchisees
purchase food, proprietary paper and operating supplies under national contracts with pricing based upon total
system volume.
QSCC’s supply chain management facilitates continuity of supply and provides consolidated purchasing
efficiencies while monitoring and seeking to minimize possible obsolete inventory throughout the Wendy’s North
America supply chain. The system’s purchasing function for 2009 and prior was performed and paid for by
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