The Wendy’s Company (NASDAQ: WEN) today announced plans to sell 54 restaurants, including one in development, in the Salt Lake City market to a subsidiary of NPC International, Inc., the eighth-largest restaurant operator in the U.S. with more than 1,200 restaurants. The operator currently has a total of 37 Wendy’s restaurants in two states.
Wendy’s announced plans in July to geographically concentrate its restaurant ownership through the sale of about 425 Company-operated restaurants in 13 U.S. markets, primarily in the West. Restaurants are being sold to qualified operators on a market-by-market basis, with the completion of this process targeted by second quarter 2014.
Included in these agreements are specific plans to reimage certain restaurants in Wendy’s contemporary Image Activation restaurant design. They also include development plans for new restaurants.
As a result of system optimization, 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.
“We are very pleased with the strong interest in system optimization that we’re receiving from our franchisee community,” Brolick said. “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.”
As part of its system optimization initiative, the Company has now sold or has signed agreements for 172 total restaurants this year.
Transactions to date include:
- 24 restaurants, along with two future locations, in the Seattle market to Cedar Enterprises, Inc., a long-time Wendy’s franchisee
- 30 restaurants in the St. Louis market to BB St. Louis, LLC, a partnership headed by current Wendy’s franchisee and former National Basketball Association great Junior Bridgeman, along with current NBA star Chauncey Billups
- 24 restaurants in the Kansas City market to a subsidiary of NPC International
- A total of 40 restaurants to eight franchisees in other markets
The Wendy’s Company is the world’s third-largest quick-service hamburger company. The Wendy’s system includes more than 6,500 franchise and Company-operated restaurants in the United States and 28 countries and U.S. territories worldwide. For more information, visit aboutwendys.com or wendys.com.
