Wendy's 2012 Annual Report Download - page 7

Wendy’s is also a 50% partner in a Canadian restaurant real estate joint venture with Tim Hortons Inc., a
quick-service restaurant chain. The joint venture owns Wendy’s/Tim Hortons combo units in Canada. As of
December 30, 2012, there were 105 Wendy’s restaurants in operation that were owned by the joint venture.
During the second quarter of 2011, Wendy’s became a 49% partner in a joint venture for the operation of
Wendy’s restaurants in Japan. As of December 30, 2012, there were two Wendy’s restaurants operated by this joint
venture.
Wendy’s Restaurants
Wendy’s opened its first restaurant in Columbus, Ohio in 1969. During 2012, Wendy’s opened 16 new
company-owned restaurants and closed 32 generally underperforming company-owned restaurants. In addition,
Wendy’s purchased 56 restaurants from its franchisees and disposed of 30 restaurants to franchisees. During 2012,
Wendy’s franchisees opened 85 new restaurants and closed 103 generally underperforming restaurants.
The following table sets forth the number of Wendy’s restaurants at the beginning and end of each year from
2010 to 2012:
2012 2011 2010
Restaurants open at beginning of period ..................... 6,594 6,576 6,541
Restaurants opened during period .......................... 101 89 78
Restaurants closed during period ........................... (135) (71) (43)
Restaurants open at end of period .......................... 6,560 6,594 6,576
During the period from January 4, 2010, through December 30, 2012, 268 Wendy’s restaurants were opened
and 249 generally underperforming Wendy’s restaurants were closed.
Operations
Each Wendy’s restaurant offers an extensive menu specializing in hamburger sandwiches and featuring 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, french fries, baked potatoes, freshly prepared salads, soft drinks, FrostyTM desserts and
kids’ meals. In addition, the restaurants sell a variety of promotional products on a limited time basis. Wendy’s also
offers breakfast in some restaurants in the United States, although Wendy’s announced in January 2013 that it was
discontinuing the breakfast daypart at certain restaurants.
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 65.3%, 65.1% and
64.9% in 2012, 2011, and 2010, 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
operational audits 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, 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. (the “Bakery”), a 100% owned subsidiary of Wendy’s, is a producer of buns
for some Wendy’s restaurants, and to a lesser extent for outside parties. At December 30, 2012, the Bakery supplied
784 restaurants operated by Wendy’s and 2,152 restaurants operated by franchisees. The Bakery also produces and
sells some products to customers in the grocery and other food service businesses.
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