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The Wendy's to divest 54 restaurants to NPC International

RBR Staff Writer Published 22 November 2013

The Wendy's Company, world's third-largest quick-service hamburger company, plans to sell 54 restaurants, including one in development, in the Salt Lake City market to a subsidiary of NPC International, a restaurant operator in the US.

Wendy's Restaurant

This development is part of Wendy's earlier announced plans to geographically concentrate its restaurant ownership through the sale of about 425 company-operated restaurants in 13 US markets, primarily in the West.

Wendy's noted that restaurants are being sold to qualified operators on a market-by-market basis. The process is expected to complete by second quarter of 2014.

Further, there are plans to reimage certain restaurants in Wendy's contemporary Image Activation restaurant design, which also form part of these agreements. Development plans for new restaurants are also included.

NPC International presently operates 37 Wendy's restaurants in two states apart from other more than 1,200 restaurants.

Wendy's President and chief executive officer Emil Brolick said the company expects to generate a higher operating margin and stronger free cash flow, along with further enhancing the quality of its earnings with a more predictable revenue stream from a higher percentage of royalty and rental income as a result of system optimization.

"We view this as an excellent opportunity to grow our business with new and existing franchisees that are focused on operational excellence, have a strong balance sheet, and are fully committed to our restaurant reimaging effort," Brolick added.

As part of its system optimization initiative, the company has so far sold or has signed agreements for 172 total restaurants this year.

Wendy's presently operates more than 6,500 franchise and company-operated restaurants in US and 28 countries and US territories worldwide.

Image: Wendy's restaurant at 375 South Churton Street in Hillsborough, North Carolina. Photo: Courtesy of Ildar Sagdejev.