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Wendy’s to sell nearly 425 outlets to franchise operators

RBR Staff Writer Published 24 July 2013

Wendy’s, an Ohio-based fast food chain, plans to sell approximately 425 company-operated outlets to franchise operators, in a move to optimize its restaurant portfolio.

The company intends to reduce its overall system ownership from the current 22% to approximately 15% through this sale.

The sale process is expected to complete by the end of the second quarter of 2014.

Wendy's president and chief executive officer Emil Brolick said the system optimization initiative is an important part of the company's brand transformation, which includes reimaging and developing new restaurants, the new Wendy's logo, updated menu boards, innovative products and bold new packaging.

"The system optimization initiative will create a growth opportunity for both the Company and strong franchise operators by expanding participation in our Image Activation program to a larger base of franchisees," Brolick added.

"We believe system optimization will also enable us to increase our long-term earnings per share growth rate and return incremental cash to shareholders in the form of dividends and share repurchases, beginning with a 25-percent increase in our third-quarter dividend."

Meanwhile, the retailer posted quarterly net income attributable to the company of $12.2m in second quarter ended 30 June 2013, as against a loss of $5.5m last year.

Consolidated revenues totaled $650.54m in Q2, up compared with $645.87m in the 2012 second quarter.

Presently, Wendy's operates more than 6,500 franchise and company-operated outlets in the US and 27 countries and US territories worldwide.