Wendy's 2011 Annual Report Download - page 7

Item 1.Business.
Introduction
The Wendy’s Company (“The Wendy’s Company”) is the parent company of its 100% owned subsidiary
holding company Wendy’s Restaurants, LLC (“Wendy’s Restaurants”). Wendy’s Restaurants is the parent company
of Wendy’s International, Inc. (“Wendy’s”), which is the owner and franchisor of the Wendy’s®restaurant system in
the United States. As used in this report, unless the context requires otherwise, the term “Companies” refers to The
Wendy’s Company and its direct and indirect subsidiaries, including Wendy’s Restaurants.
As of January 1, 2012, the Wendy’s restaurant system was comprised of 6,594 restaurants, of which 1,417 were
owned and operated by the Companies. References in this Annual Report on Form 10-K (the “Form 10-K”) to
restaurants that we “own” or that are “company-owned” include owned and leased restaurants. The Wendy’s
Company’s corporate predecessor was incorporated in Ohio in 1929 and was reincorporated in Delaware in June
1994. Effective September 29, 2008, in conjunction with the merger with Wendy’s, The Wendy’s Company’s
corporate name was changed from Triarc Companies, Inc. (“Triarc”) to Wendy’s/Arby’s Group, Inc. Effective July 5,
2011, in connection with the sale of Arby’s Restaurant Group, Inc. (“Arby’s”), Wendy’s/Arby’s Group, Inc. changed
its name to The Wendy’s Company. The Companies’ principal executive offices are located at One Dave Thomas
Blvd., Dublin, Ohio 43017, and their telephone number is [phone]. We make our annual reports on Form
10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to such reports, as well as The
Wendy’s Company annual proxy statement, available, free of charge, on our website as soon as reasonably practicable
after such reports are electronically filed with, or furnished to, the Securities and Exchange Commission. Our website
address is www.aboutwendys.com. Information contained on that website is not part of this Form 10-K.
Merger with Wendy’s
On September 29, 2008, Triarc and Wendy’s completed their merger (the “Wendy’s Merger”) in an all-stock
transaction in which Wendy’s shareholders received 4.25 shares of Wendy’s/Arby’s Class A common stock for each
Wendy’s common share owned.
In the Wendy’s Merger, approximately 377,000,000 shares of Wendy’s/Arby’s Class A common stock were
issued to Wendy’s shareholders. The merger value of approximately $2.5 billion for financial reporting purposes was
based on the 4.25 conversion factor of the Wendy’s outstanding shares as well as previously issued restricted stock
awards, both at a value of $6.57 per share which represented the average closing market price of Triarc Class A
common stock two days before and after the merger announcement date of April 24, 2008. Wendy’s shareholders
held approximately 80%, in the aggregate, of Wendy’s/Arby’s outstanding Class A common stock immediately
following the Wendy’s Merger. In addition, effective on the date of the Wendy’s Merger, Wendy’s/Arby’s Class B
common stock was converted into Class A common stock. In connection with the May 28, 2009 amendment and
restatement of Wendy’s/Arby’s Certificate of Incorporation, Class A common stock was redesignated as “Common
Stock.”
Sale of Arby’s
During January 2011, The Wendy’s Company decided to explore strategic alternatives for the Arby’s brand,
which culminated in the sale of Arby’s, in order to focus on the development of the Wendy’s brand. On July 4, 2011,
Wendy’s Restaurants completed the sale of 100% of the common stock of Arby’s to ARG IH Corporation (“Buyer”),
a wholly owned subsidiary of ARG Holding Corporation (“Buyer Parent”), for $130 million in cash (subject to
customary purchase price adjustments) and 18.5% of the common stock of Buyer Parent (through which Wendy’s
Restaurants indirectly retained an 18.5% interest in Arby’s) with a fair value of $19.0 million. Buyer and Buyer
Parent were formed for purposes of this transaction. The Buyer also assumed approximately $190 million of Arby’s
debt, consisting primarily of capital lease and sale-leaseback obligations.
Fiscal Year
The Companies use a 52/53 week fiscal year convention whereby their fiscal year ends each year on the Sunday
that is closest to December 31 of that year. Each fiscal year generally is comprised of four 13-week fiscal quarters,
although in the years with 53 weeks, including 2009, the fourth quarter represents a 14-week period.
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