The Wendy’s Company (NASDAQ: WEN) has sold 30 Austin and 19 Sacramento area restaurants, in separate transactions. With the completion of the transactions today, the Company has now either sold or announced sales agreements for a total of 282 restaurants in 2013 as part of its System Optimization initiative.
The Austin restaurants have been sold to HAZA Foods, LLC of Austin, Texas. Ali Dhanani is president and chief executive officer of the organization, which also operates 31 Wendy’s restaurants in the greater Houston market and three in Waco/Temple, Texas.
The Sacramento area restaurants have been sold to Desmond Foods, L.P. — a Wendy’s franchisee since 1973, led by President and Chief Financial Officer Craig Horn. Desmond also operates 17 Wendy’s restaurants in the Fresno market along with seven in the San Francisco area.
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.
As part of this initiative, Wendy’s previously announced the sale of or an agreement to sell the following markets: Kansas City, Phoenix, Portland, Salt Lake City, Seattle and St. Louis.
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, 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.
“Ali Dhanani and Craig Horn are terrific operators with a strong customer orientation,” Wendy’s President and Chief Executive Officer Emil Brolick said. “Both of their organizations understand the importance of operational excellence, have a strong balance sheet and are fully committed to restaurant reimaging. We know their teams will work diligently to further accelerate the growth of the Wendy’s brand in their respective markets.”
