Wendy's 2010 Annual Report Download - page 22

Item 1A.Risk Factors.
We wish to caution readers that in addition to the important factors described elsewhere in this Form 10-K, we
have included below the most significant factors that have affected, or in the future could affect, our actual results and
could cause our actual consolidated results during 2011, and beyond, to differ materially from those expressed in any
forward-looking statements made by us or on our behalf.
Risks Related to Wendy’s/Arby’s and Wendy’s/Arby’s Restaurants
The impact and results of our announcement that Wendy’s/Arby’s is exploring strategic alternatives for the
Arby’s brand, including a sale of the brand, are uncertain and cannot be determined.
In January 2011, Wendy’s/Arby’s announced that it is exploring strategic alternatives for the Arby’s brand,
including a sale of the brand. There can be no assurance that the review of strategic alternatives will result in any
agreement or transaction, or that if an agreement is executed, that a transaction will be consummated. We do not
intend to disclose developments with respect to this review (whether or not material) unless and until the Board of
Directors has approved a specific course of action or terminated the exploration of strategic alternatives. In connection
with our exploration of strategic alternatives, we expect to incur expenses, including expenses in connection with the
retention of key personnel and consultants. The process of exploring strategic alternatives may be disruptive to our
business. The inability to effectively manage the process and any resulting agreement or transaction could materially
and adversely affect our business, financial condition or results of operations.
Our success depends in part upon the continued retention of certain key personnel.
We believe that over time our success has been dependent to a significant extent upon the efforts and abilities of
our senior management team. The failure by us to retain members of our senior management team could adversely
affect our ability to build on the efforts we have undertaken to increase the efficiency and profitability of our
businesses. The retention of members of our senior management team may be more difficult following Wendy’s/
Arby’s announcement that it is exploring strategic alternatives for the Arby’s brand, including the sale of the brand.
Growth of our restaurant businesses is significantly 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 significantly 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 and Arby’s franchisees could take actions that could harm our business.
Wendy’s and Arby’s franchisees are contractually obligated to operate their restaurants in accordance with the
standards set forth in agreements with them. Each brand 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.
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