Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 02, 2022 | Feb. 22, 2022 | Jul. 02, 2021 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Jan. 2, 2022 | ||
Current Fiscal Year End Date | --01-02 | ||
Document Transition Report | false | ||
Entity File Number | 1-2207 | ||
Entity Registrant Name | THE WENDY’S COMPANY | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 38-0471180 | ||
Entity Address, Address Line One | One Dave Thomas Blvd. | ||
Entity Address, Postal Zip Code | 43017 | ||
Entity Address, City or Town | Dublin | ||
Entity Address, State or Province | OH | ||
City Area Code | 614 | ||
Local Phone Number | 764-3100 | ||
Title of 12(b) Security | Common Stock, $.10 par value | ||
Trading Symbol | WEN | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Central Index Key | 0000030697 | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 215,230,857 | ||
Entity Public Float | $ 4,136.8 | ||
Auditor Name | Deloitte & Touche LLP | ||
Auditor Location | Columbus, Ohio | ||
Auditor Firm ID | 34 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) shares in Thousands, $ in Thousands | Jan. 02, 2022 | Jan. 03, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 249,438 | $ 306,989 |
Restricted cash | 27,535 | 33,973 |
Accounts and notes receivable, net | 119,540 | 109,891 |
Inventories | 5,934 | 4,732 |
Prepaid expenses and other current assets | 30,584 | 89,732 |
Advertising funds restricted assets | 159,818 | 142,306 |
Total current assets | 592,849 | 687,623 |
Properties | 906,867 | 915,889 |
Finance lease assets | 244,279 | 206,153 |
Operating lease assets | 812,620 | 821,480 |
Goodwill | 775,278 | 751,049 |
Other intangible assets | 1,280,791 | 1,224,960 |
Investments | 49,870 | 44,574 |
Net investment in sales-type and direct financing leases | 299,707 | 268,221 |
Other assets | 139,130 | 120,057 |
Total assets | 5,101,391 | 5,040,006 |
Current liabilities: | ||
Current portion of long-term debt | 24,250 | 28,962 |
Current portion of finance lease liabilities | 15,513 | 12,105 |
Current portion of operating lease liabilities | 47,315 | 45,346 |
Accounts payable | 41,163 | 31,063 |
Accrued expenses and other current liabilities | 140,783 | 155,321 |
Advertising funds restricted liabilities | 157,901 | 140,511 |
Total current liabilities | 426,925 | 413,308 |
Long-term debt | 2,356,416 | 2,218,163 |
Long-term finance lease liabilities | 559,587 | 506,076 |
Long-term operating lease liabilities | 853,328 | 865,325 |
Deferred income taxes | 267,710 | 280,755 |
Deferred franchise fees | 88,102 | 89,094 |
Other liabilities | 112,918 | 117,689 |
Total liabilities | 4,664,986 | 4,490,410 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Common stock, $0.10 par value; 1,500,000 shares authorized; 470,424 shares issued; 215,849 and 224,268 shares outstanding, respectively | 47,042 | 47,042 |
Additional paid-in capital | 2,898,633 | 2,899,276 |
Retained earnings | 344,198 | 238,674 |
Common stock held in treasury, at cost; 254,575 and 246,156 shares, respectively | (2,805,268) | (2,585,755) |
Accumulated other comprehensive loss | (48,200) | (49,641) |
Total stockholders’ equity | 436,405 | 549,596 |
Total liabilities and stockholders’ equity | $ 5,101,391 | $ 5,040,006 |
Common Stock, Par Value | $ 0.10 | $ 0.10 |
Common Stock, Shares Authorized | 1,500,000 | 1,500,000 |
Common Stock, Shares Issued | 470,424 | 470,424 |
Common Stock, Shares, Outstanding | 215,849 | 224,268 |
Treasury Stock, Shares | 254,575 | 246,156 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2022 | Jan. 03, 2021 | Dec. 29, 2019 | |
Revenues | |||
Franchise rental income | $ 236,655 | $ 232,648 | $ 233,065 |
Revenues | 1,896,998 | 1,733,825 | 1,709,002 |
Costs and Expenses | |||
Cost of sales | 611,680 | 614,907 | 597,530 |
Franchise support and other costs | 42,900 | 26,464 | 43,686 |
Franchise rental expense | 132,411 | 125,613 | 123,929 |
Advertising funds expense | 411,751 | 345,360 | 338,116 |
General and administrative | 242,970 | 206,876 | 200,206 |
Depreciation and amortization | 125,540 | 132,775 | 131,693 |
System optimization gains, net | (33,545) | (3,148) | (1,283) |
Reorganization and realignment costs | 8,548 | 16,030 | 16,965 |
Impairment of long-lived assets | 2,251 | 8,037 | 6,999 |
Other operating income, net | (14,468) | (8,397) | (11,418) |
Costs and expenses | 1,530,038 | 1,464,517 | 1,446,423 |
Operating profit | 366,960 | 269,308 | 262,579 |
Interest expense, net | (109,185) | (117,737) | (115,971) |
Loss on early extinguishment of debt | (17,917) | 0 | (8,496) |
Investment income (loss), net | 39 | (225) | 25,598 |
Other income, net | 681 | 1,449 | 7,771 |
Income before income taxes | 240,578 | 152,795 | 171,481 |
Provision for income taxes | (40,186) | (34,963) | (34,541) |
Net income | $ 200,392 | $ 117,832 | $ 136,940 |
Earnings Per Share | |||
Earnings Per Share, Basic | $ 0.91 | $ 0.53 | $ 0.60 |
Earnings Per Share, Diluted | $ 0.89 | $ 0.52 | $ 0.58 |
Sales | |||
Revenues | |||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 734,074 | $ 722,764 | $ 707,485 |
Franchise royalty revenue and fees | |||
Revenues | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 536,748 | 444,749 | 428,999 |
Advertising funds revenue | |||
Revenues | |||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 389,521 | $ 333,664 | $ 339,453 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2022 | Jan. 03, 2021 | Dec. 29, 2019 | |
Net income | $ 200,392 | $ 117,832 | $ 136,940 |
Other comprehensive income: | |||
Foreign currency translation adjustment | 1,441 | 4,187 | 7,845 |
Other comprehensive income | 1,441 | 4,187 | 7,845 |
Comprehensive income | $ 201,833 | $ 122,019 | $ 144,785 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Cumulative effect of change in accounting principle | Common Stock | Additional Paid-In Capital | Retained Earnings | Retained EarningsCumulative effect of change in accounting principle | Common Stock Held in Treasury | Accumulated Other Comprehensive Loss |
Stockholders' Equity, beginning of period at Dec. 30, 2018 | $ 648,449 | $ (1,105) | $ 47,042 | $ 2,884,696 | $ 146,277 | $ (1,105) | $ (2,367,893) | $ (61,673) |
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income | 136,940 | 0 | 0 | 136,940 | 0 | 0 | ||
Other comprehensive income, net | 7,845 | 0 | 0 | 0 | 0 | 7,845 | ||
Cash dividends | (96,364) | 0 | 0 | (96,364) | 0 | 0 | ||
Repurchases of common stock, including accelerated share repurchase | (217,771) | 0 | (15,000) | 0 | (202,771) | 0 | ||
Share-based compensation | 18,676 | 0 | 18,676 | 0 | 0 | 0 | ||
Common stock issued upon exercises of stock options | 28,136 | 0 | (808) | 0 | 28,944 | 0 | ||
Common stock issued upon vesting of restricted shares | (8,627) | 0 | (13,677) | 0 | 5,050 | 0 | ||
Other | 180 | 0 | 114 | (23) | 89 | 0 | ||
Stockholders' Equity, end of period at Dec. 29, 2019 | 516,359 | 47,042 | 2,874,001 | 185,725 | (2,536,581) | (53,828) | ||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income | 117,832 | 0 | 0 | 117,832 | 0 | 0 | ||
Other comprehensive income, net | 4,187 | 0 | 0 | 0 | 0 | 4,187 | ||
Cash dividends | (64,866) | 0 | 0 | (64,866) | 0 | 0 | ||
Repurchases of common stock, including accelerated share repurchase | (61,095) | 0 | 15,000 | 0 | (76,095) | 0 | ||
Share-based compensation | 18,930 | 0 | 18,930 | 0 | 0 | 0 | ||
Common stock issued upon exercises of stock options | 23,351 | 0 | (912) | 0 | 24,263 | 0 | ||
Common stock issued upon vesting of restricted shares | (5,389) | 0 | (7,889) | 0 | 2,500 | 0 | ||
Other | 287 | 0 | 146 | (17) | 158 | 0 | ||
Stockholders' Equity, end of period at Jan. 03, 2021 | 549,596 | 47,042 | 2,899,276 | 238,674 | (2,585,755) | (49,641) | ||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income | 200,392 | 0 | 0 | 200,392 | 0 | 0 | ||
Other comprehensive income, net | 1,441 | 0 | 0 | 0 | 0 | 1,441 | ||
Cash dividends | (94,846) | 0 | 0 | (94,846) | 0 | 0 | ||
Repurchases of common stock, including accelerated share repurchase | (267,808) | 0 | (18,750) | 0 | (249,058) | 0 | ||
Share-based compensation | 22,019 | 0 | 22,019 | 0 | 0 | 0 | ||
Common stock issued upon exercises of stock options | 29,050 | 0 | 1,911 | 0 | 27,139 | 0 | ||
Common stock issued upon vesting of restricted shares | (3,738) | 0 | (6,023) | 0 | 2,285 | 0 | ||
Other | 299 | 0 | 200 | (22) | 121 | 0 | ||
Stockholders' Equity, end of period at Jan. 02, 2022 | $ 436,405 | $ 47,042 | $ 2,898,633 | $ 344,198 | $ (2,805,268) | $ (48,200) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2022 | Jan. 03, 2021 | Dec. 29, 2019 | |
Cash flows from operating activities: | |||
Net income | $ 200,392 | $ 117,832 | $ 136,940 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 125,540 | 132,775 | 131,693 |
Share-based compensation | 22,019 | 18,930 | 18,676 |
Impairment of long-lived assets | 2,251 | 8,037 | 6,999 |
Deferred income tax | (13,781) | 10,266 | 837 |
Non-cash rental expense, net | 40,596 | 28,937 | 28,202 |
Change in operating lease liabilities | (45,606) | (40,905) | (41,911) |
Net receipt (recognition) of deferred vendor incentives | 715 | 2,495 | (501) |
System optimization gains, net | (33,545) | (3,148) | (1,283) |
Gain on sale of investments, net | (63) | 0 | (24,496) |
Distributions received from TimWen joint venture | 16,337 | 8,376 | 13,400 |
Equity in earnings in joint ventures, net | (11,203) | (6,096) | (8,673) |
Long-term debt-related activities, net (see below) | 24,758 | 6,723 | 15,317 |
Other, net | (13,242) | (6,438) | (4,838) |
Changes in operating assets and liabilities: | |||
Accounts and notes receivable, net | (5,613) | (16,243) | 16,935 |
Inventories | (872) | (841) | (163) |
Prepaid expenses and other current assets | (3,396) | (8,780) | (1,569) |
Advertising funds restricted assets and liabilities | 11,519 | 49,052 | (2,720) |
Accounts payable | 7,586 | 1,620 | 1,054 |
Accrued expenses and other current liabilities | 21,380 | (18,231) | 5,034 |
Net cash provided by operating activities | 345,772 | 284,361 | 288,933 |
Cash flows from investing activities: | |||
Capital expenditures | (77,984) | (68,969) | (74,453) |
Acquisitions | (123,069) | (4,879) | (5,052) |
Dispositions | 55,118 | 6,091 | 3,448 |
Proceeds from sale of investments | 63 | 169 | 24,496 |
Notes receivable, net | 1,203 | (662) | (3,370) |
Payments for investments | (10,000) | 0 | 0 |
Net cash used in investing activities | (154,669) | (68,250) | (54,931) |
Cash flows from financing activities: | |||
Proceeds from long-term debt | 1,100,000 | 153,315 | 850,000 |
Repayments of long-term debt | (970,344) | (191,462) | (899,800) |
Repayments of finance lease liabilities | (13,640) | (8,383) | (6,835) |
Deferred financing costs | (20,873) | (2,122) | (14,008) |
Repurchases of common stock, including accelerated share repurchase | (268,531) | (62,173) | (217,797) |
Dividends | (94,846) | (64,866) | (96,364) |
Proceeds from stock option exercises | 30,003 | 23,361 | 28,328 |
Payments related to tax withholding for share-based compensation | (4,511) | (5,577) | (8,820) |
Net cash used in financing activities | (242,742) | (157,907) | (365,296) |
Net cash (used in) provided by operations before effect of exchange rate changes on cash | (51,639) | 58,204 | (131,294) |
Effect of exchange rate changes on cash | 364 | 1,330 | 3,489 |
Net (decrease) increase in cash, cash equivalents and restricted cash | (51,275) | 59,534 | (127,805) |
Cash, cash equivalents and restricted cash at beginning of period | 418,241 | 358,707 | 486,512 |
Cash, cash equivalents and restricted cash at end of period | 366,966 | 418,241 | 358,707 |
Long-term debt-related activities, net: | |||
Loss on early extinguishment of debt | 17,917 | 0 | 8,496 |
Accretion of long-term debt | 1,177 | 1,161 | 1,272 |
Amortization of deferred financing costs | 5,664 | 5,562 | 5,549 |
Long-term debt-related activities, net: | 24,758 | 6,723 | 15,317 |
Cash paid for: | |||
Interest | 133,284 | 136,228 | 138,270 |
Income taxes, net of refunds | 54,779 | 16,202 | 34,798 |
Supplemental non-cash investing and financing activities: | |||
Capital expenditures included in accounts payable | 6,158 | 3,673 | 6,026 |
Finance leases | 82,032 | 34,918 | 50,061 |
Reconciliation of cash, cash equivalents and restricted cash at end of period: | |||
Cash and cash equivalents | 249,438 | 306,989 | 300,195 |
Restricted cash | 27,535 | 33,973 | 34,539 |
Restricted cash, included in Advertising funds restricted assets | 89,993 | 77,279 | 23,973 |
Total cash, cash equivalents and restricted cash | $ 366,966 | $ 418,241 | $ 358,707 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Jan. 02, 2022 | |
Accounting Policies [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies | Summary of Significant Accounting Policies Corporate Structure The Wendy’s Company (“The Wendy’s Company” and, together with its subsidiaries, the “Company,” “we,” “us,” or “our”) is the parent company of its 100% owned subsidiary holding company, Wendy’s Restaurants, LLC (“Wendy’s Restaurants”). Wendy’s Restaurants is the parent company of Wendy’s International, LLC and its subsidiaries (“Wendy’s”). Wendy’s franchises and operates Wendy’s quick-service restaurants specializing in hamburger sandwiches throughout the United States of America (“U.S.”) and in 31 foreign countries and U.S. territories. At January 2, 2022, Wendy’s operated and franchised 408 and 6,541 restaurants, respectively. The Company manages and internally reports its business in the following segments: (1) Wendy’s U.S., (2) Wendy’s International and (3) Global Real Estate & Development. See Note 26 for further information. Principles of Consolidation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include all of the Company’s subsidiaries. We also consider for consolidation entities in which we have certain interests, where the controlling financial interest may be achieved through arrangements that do not involve voting interests. Such an entity, known as a variable interest entity (“VIE”), is required to be consolidated by its primary beneficiary. The primary beneficiary is the entity that possesses the power to direct the activities of the VIE that most significantly impact its economic performance and has the obligation to absorb losses or the right to receive benefits from the VIE that are significant to it. The principal entities in which we possess a variable interest include the Company’s national advertising funds for the U.S. and Canada (the “Advertising Funds”). All intercompany balances and transactions have been eliminated in consolidation. The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. On March 11, 2020, the World Health Organization declared the novel strain of coronavirus (“COVID-19”) a global pandemic. We continue to monitor the dynamic nature of the COVID-19 pandemic on our business, results and financial condition; however, we cannot predict the ultimate duration, scope or severity of the COVID-19 pandemic or its ultimate impact on our results of operations, financial condition and prospects. Reclassifications Certain reclassifications have been made to the prior year presentation to conform to the current year presentation. Fiscal Year The Company’s fiscal reporting periods consist of 52 or 53 weeks ending on the Sunday closest to December 31 and are referred to herein as (1) “the year ended January 2, 2022” or “2021,” which consisted of 52 weeks, (2) “the year ended January 3, 2021” or “2020,” which consisted of 53 weeks, and (3) “the year ended December 29, 2019” or “2019,” which consisted of 52 weeks. All references to years, quarters and months relate to fiscal periods rather than calendar periods. Cash and Cash Equivalents All highly liquid investments with a maturity of three months or less when acquired are considered cash equivalents. The Company’s cash and cash equivalents principally consist of cash in bank and money market mutual fund accounts and are primarily not in Federal Deposit Insurance Corporation insured accounts. We believe that our vulnerability to risk concentrations in our cash equivalents is mitigated by (1) our policies restricting the eligibility, credit quality and concentration limits for our placements in cash equivalents and (2) insurance from the Securities Investor Protection Corporation of up to $500 per account, as well as supplemental private insurance coverage maintained by substantially all of our brokerage firms, to the extent our cash equivalents are held in brokerage accounts. Restricted Cash In accordance with the Company’s securitized financing facility, certain cash accounts have been established with the trustee for the benefit of the trustee and the noteholders and are restricted in their use. Such restricted cash primarily represents cash collections and cash reserves held by the trustee to be used for payments of principal, interest and commitment fees required for the Company’s senior secured notes. Restricted cash also includes cash collected by the Advertising Funds, usage of which is restricted for advertising activities and is included in “Advertising funds restricted assets.” Refer to Note 7 for further information. Accounts and Notes Receivable, Net Accounts and notes receivable, net, consist primarily of royalties, rents, property taxes and franchise fees due principally from franchisees, delivery-related receivables, credit card receivables, insurance receivables and refundable income taxes. Reserve estimates include consideration of the likelihood of default expected over the estimated life of the receivable. The Company periodically assesses the need for an allowance for doubtful accounts on its receivables based upon several key credit quality indicators such as outstanding past due balances, the financial strength of the obligor, the estimated fair value of any underlying collateral and agreement characteristics. We believe that our vulnerability to risk concentrations in our receivables is mitigated by (1) favorable historical collectability on past due balances, (2) recourse to the underlying collateral regarding sales-type and direct financing lease receivables, and (3) our expectations for fluctuations in general market conditions. Receivables are considered delinquent once they are contractually past due under the terms of the underlying agreements. See Note 7 for further information. Inventories The Company’s inventories are stated at the lower of cost or net realizable value, with cost determined in accordance with the first-in, first-out method and consist primarily of restaurant food items and paper supplies. Cloud Computing Arrangements (“CCA”) The Company capitalizes implementation costs associated with its CCA consistent with costs capitalized for internal-use software. Capitalized CCA implementation costs are included in “Prepaid expenses and other current assets” and “Other assets.” The CCA implementation costs are amortized over the term of the related hosting agreement, including renewal periods that are reasonably certain to be exercised. Amortization expense of CCA implementation costs is recorded to “General and administrative.” The CCA implementation costs are included within operating activities in the Company’s consolidated statements of cash flows. Properties and Depreciation and Amortization Properties are stated at cost, including capitalized internal costs of employees to the extent such employees are dedicated to specific restaurant construction projects, less accumulated depreciation and amortization. Depreciation and amortization of properties is computed principally on the straight-line basis using the following estimated useful lives of the related major classes of properties: 3 to 20 years for office and restaurant equipment (including technology), 3 to 15 years for transportation equipment and 7 to 30 years for buildings and improvements. When the Company commits to a plan to cease using certain properties before the end of their estimated useful lives, depreciation expense is accelerated to reflect the use of the assets over their shortened useful lives. Leasehold improvements are amortized over the shorter of their estimated useful lives or the terms of the respective leases, including periods covered by renewal options that the Company is reasonably assured of exercising. The Company reviews properties for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. If such review indicates an asset group may not be recoverable, an impairment loss is recognized for the excess of the carrying amount over the fair value of an asset group to be held and used or over the fair value less cost to sell of an asset to be disposed. See “Impairment of Long-Lived Assets” below for further information. The Company classifies assets as held for sale and ceases depreciation of the assets when there is a plan for disposal of the assets and those assets meet the held for sale criteria. Assets held for sale are included in “Prepaid expenses and other current assets” in the consolidated balance sheets. Goodwill Goodwill, representing the excess of the cost of an acquired entity over the fair value of the acquired net assets, is not amortized. Goodwill associated with our Company-operated restaurants is reduced as a result of restaurant dispositions based on the relative fair values and is included in the carrying value of the restaurant in determining the gain or loss on disposal. If a Company-operated restaurant is sold within two years of being acquired from a franchisee, the goodwill associated with the acquisition is written off in its entirety. Goodwill has been assigned to reporting units for purposes of impairment testing. The Company tests goodwill for impairment annually during the fourth quarter, or more frequently if events or changes in circumstances indicate that the asset may be impaired. Our annual impairment test of goodwill may be completed through a qualitative assessment to determine if the fair value of the reporting unit is more likely than not greater than the carrying amount. If we elect to bypass the qualitative assessment for any reporting units, or if a qualitative assessment indicates it is more likely than not that the estimated carrying value of a reporting unit exceeds its fair value, we perform a quantitative goodwill impairment test. Under the quantitative test, the fair value of the reporting unit is compared with its carrying value (including goodwill). If the carrying value of the reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. Our critical estimates in this impairment test include future sales growth, operating profit, income tax rates, terminal value growth rates, capital expenditures and the weighted average cost of capital (discount rate). Our fair value estimates are subject to change as a result of many factors including, among others, any changes in our business plans, changing economic conditions and the competitive environment. Should actual cash flows and our future estimates vary adversely from those estimates we use, we may be required to recognize goodwill impairment charges in future years. Impairment of Long-Lived Assets Our long-lived assets include (1) properties and related definite-lived intangible assets (e.g., favorable leases) that are leased and/or subleased to franchisees, (2) Company-operated restaurant assets and related definite-lived intangible assets, which include reacquired rights under franchise agreements, and (3) finance and operating lease assets. We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We assess the recoverability of our long-lived assets by comparing the carrying amount of the asset group to future undiscounted net cash flows expected to be generated through leases and/or subleases or by our individual Company-operated restaurants. If the carrying amount of the long-lived asset group is not recoverable on an undiscounted cash flow basis, then impairment is recognized to the extent that the carrying amount exceeds its fair value and is included in “Impairment of long-lived assets.” Our critical estimates in this review process include the anticipated future cash flows from leases and/or subleases or individual Company-operated restaurants, which is used in assessing the recoverability of the respective long-lived assets. Our fair value estimates are subject to change as a result of many factors including, among others, any changes in our business plans, changing economic conditions and the competitive environment. Should actual cash flows and our future estimates vary adversely from those estimates we used, we may be required to recognize additional impairment charges in future years. Other Intangible Assets Definite-lived intangible assets are amortized on a straight-line basis using the following estimated useful lives of the related classes of intangibles: for favorable leases, the terms of the respective leases, including periods covered by renewal options that the Company as lessor is reasonably certain the tenant will exercise; 1 to 5 years for computer software; 4 to 20 years for reacquired rights under franchise agreements; and 20 years for franchise agreements. Trademarks have an indefinite life and are not amortized. The Company reviews definite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the intangible asset may not be recoverable. Indefinite-lived intangible assets are tested for impairment at least annually, or more frequently if events or changes in circumstances indicate that the assets may be impaired. Our annual impairment test for indefinite-lived intangible assets may be completed through a qualitative assessment to determine if the fair value of the indefinite-lived intangible assets is more likely than not greater than the carrying amount. If we elect to bypass the qualitative assessment, or if a qualitative assessment indicates it is more likely than not that the estimated carrying value exceeds the fair value, we test for impairment using a quantitative process. If the Company determines that impairment of its intangible assets may exist, the amount of impairment loss is measured as the excess of carrying value over fair value. Our estimates in the determination of the fair value of indefinite-lived intangible assets include the anticipated future revenues of Company-operated and franchised restaurants and the resulting cash flows. Investments The Company has a 50% share in a partnership in a Canadian restaurant real estate joint venture (“TimWen”) with a subsidiary of Restaurant Brands International Inc., a quick-service restaurant company that owns the Tim Hortons ® brand (Tim Hortons is a registered trademark of Tim Hortons USA Inc.). In addition, the Company has a 20% share in a joint venture in Brazil (the “Brazil JV”). The Company has significant influence over these investees. Such investments are accounted for using the equity method, under which our results of operations include our share of the income (loss) of the investees in “Other operating income, net.” Cash distributions and dividends received that are determined to be returns of capital are recorded as a reduction of the carrying value of our investments and returns on our investments are recorded to “Investment income (loss), net.” The difference between the carrying value of our TimWen equity investment and the underlying equity in the historical net assets of the investee is accounted for as if the investee were a consolidated subsidiary. Accordingly, the carrying value difference is amortized over the estimated lives of the assets of the investee to which such difference would have been allocated if the equity investment were a consolidated subsidiary. To the extent the carrying value difference represents goodwill, it is not amortized. Other investments in equity securities in which the Company does not have significant influence, and for which there is not a readily determinable fair value, are recorded at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer. Realized gains and losses are reported as income or loss in the period in which the securities are sold or otherwise disposed. Share-Based Compensation The Company has granted share-based compensation awards to certain employees under several equity plans (the “Equity Plans”). The Company measures the cost of employee services received in exchange for an equity award, which include grants of employee stock options and restricted shares, based on the fair value of the award at the date of grant. Share-based compensation expense is recognized net of estimated forfeitures, determined based on historical experience. The Company recognizes share-based compensation expense over the requisite service period unless the awards are subject to performance conditions, in which case we recognize compensation expense over the requisite service period to the extent performance conditions are considered probable. The Company determines the grant date fair value of stock options using a Black-Scholes-Merton option pricing model (the “Black-Scholes Model”). The grant date fair value of restricted share awards (“RSAs”), restricted share units (“RSUs”) and performance-based awards are determined using the fair market value of the Company’s common stock on the date of grant, as set forth in the applicable plan document, unless the awards are subject to market conditions, in which case we use a Monte Carlo simulation model. The Monte Carlo simulation model utilizes multiple input variables to estimate the probability that market conditions will be achieved. Foreign Currency Translation The Company’s primary foreign operations are in Canada where the functional currency is the Canadian dollar. Financial statements of foreign subsidiaries are prepared in their functional currency and then translated into U.S. dollars. Assets and liabilities are translated at the exchange rate as of the balance sheet date and revenues, costs and expenses are translated at a monthly average exchange rate. Net gains or losses resulting from the translation are recorded to the “Foreign currency translation adjustment” component of “Accumulated other comprehensive loss.” Gains and losses arising from the impact of foreign currency exchange rate fluctuations on transactions in foreign currency are included in “General and administrative.” Income Taxes The Company accounts for income taxes under the asset and liability method. A deferred tax asset or liability is recognized whenever there are (1) future tax effects from temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and (2) operating loss, capital loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to the years in which those differences are expected to be recovered or settled. Deferred tax assets are recognized to the extent the Company believes these assets will more likely than not be realized. In evaluating the realizability of deferred tax assets, the Company considers all available positive and negative evidence, including the interaction and the timing of future reversals of existing temporary differences, projected future taxable income, recent operating results and tax-planning strategies. When considered necessary, a valuation allowance is recorded to reduce the carrying amount of the deferred tax assets to their anticipated realizable value. The Company records uncertain tax positions on the basis of a two-step process whereby we first determine if it is more likely than not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. A tax position that meets the more-likely-than-not recognition threshold is then measured for purposes of financial statement recognition as the largest amount of benefit that is greater than 50% likely of being realized upon being effectively settled. Interest accrued for uncertain tax positions is charged to “Interest expense, net.” Penalties accrued for uncertain tax positions are charged to “General and administrative.” Restaurant Acquisitions and Dispositions The Company accounts for the acquisition of restaurants from franchisees using the acquisition method of accounting for business combinations. The acquisition method of accounting involves the allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed. This allocation process requires the use of estimates and assumptions to derive fair values and to complete the allocation. The excess of the purchase price over the fair values of the assets acquired and liabilities assumed represents goodwill derived from the acquisition. See “Goodwill” above for further information. In connection with the sale of Company-operated restaurants to franchisees, the Company typically enters into several agreements, in addition to an asset purchase agreement, with franchisees including franchise, development, relationship and lease agreements. The Company typically sells restaurants’ cash, inventory and equipment and retains ownership or the leasehold interest to the real estate to lease and/or sublease to the franchisee. The Company has determined that its restaurant dispositions usually represent multiple-element arrangements, and as such, the cash consideration received is allocated to the separate elements based on their relative selling price. Cash consideration generally includes up-front consideration for the sale of the restaurants, technical assistance fees and development fees and future cash consideration for royalties and lease payments. The Company considers the future lease payments in allocating the initial cash consideration received. The Company obtains third-party evidence to estimate the relative selling price of the stated rent under the lease and/or sublease agreements which is primarily based upon comparable market rents. Based on the Company’s review of the third-party evidence, the Company records favorable or unfavorable lease assets/liabilities with a corresponding offset to the gain or loss on the sale of the restaurants. The cash consideration per restaurant for technical assistance fees and development fees is consistent with the amounts stated in the related franchise agreements which are charged for separate standalone arrangements. The Company recognizes the technical assistance and development fees over the contractual term of the franchise agreements. Future royalty income is also recognized in revenue as earned. See “Revenue Recognition” below for further information. Revenue Recognition “Sales” includes revenues recognized upon delivery of food to the customer at Company-operated restaurants. “Sales” excludes taxes collected from the Company’s customers. Revenue is recognized when the food is purchased by the customer, which is when our performance obligation is satisfied. “Sales” also includes income for gift cards. Gift card payments are recorded as deferred income when received and are recognized as revenue upon redemption. “Franchise royalty revenue and fees” includes royalties, new build technical assistance fees, renewal fees, franchisee-to- franchisee restaurant transfer (“Franchise Flip”) technical assistance fees, Franchise Flip advisory fees, development fees and information technology and other fees. Royalties from franchised restaurants are based on a percentage of sales of the franchised restaurant and are recognized as earned. New build technical assistance fees, renewal fees and Franchise Flip technical assistance fees are recorded as deferred revenue when received and recognized as revenue over the contractual term of the franchise agreements, once the restaurant has opened. Development fees are deferred when received, allocated to each agreed upon restaurant, and recognized as revenue over the contractual term of each respective franchise agreement, once the restaurant has opened. These franchise fees are considered highly dependent upon and interrelated with the franchise right granted in the franchise agreement. Franchise Flip advisory fees include valuation services and fees for selecting pre-approved buyers for Franchise Flips. Franchise Flip advisory fees are paid by the seller and are recognized as revenue at closing of the Franchise Flip transaction. Information technology and other fees are recognized as revenue as earned. “Franchise rental income” includes rental income from properties owned and leased by the Company and leased or subleased to franchisees. Rental income is recognized on a straight-line basis over the respective operating lease terms. Favorable and unfavorable lease amounts related to the leased and/or subleased properties are amortized to rental income on a straight-line basis over the remaining term of the leases. “Advertising funds revenue” includes contributions to the Advertising Funds by franchisees. Revenue related to these contributions is based on a percentage of sales of the franchised restaurants and is recognized as earned. Cost of Sales Cost of sales includes food and paper, restaurant labor and occupancy, advertising and other operating costs relating to Company-operated restaurants. Cost of sales excludes depreciation and amortization expense. Vendor Incentives The Company receives incentives from certain vendors. These incentives are recognized as earned and are classified as a reduction of “Cost of sales.” Advertising Costs Advertising costs are expensed as incurred and are included in “Cost of sales” and “Advertising funds expense.” Production costs of advertising are expensed when the advertisement is first released. Franchise Support and Other Costs The Company incurs costs to provide direct support services to our franchisees, as well as certain other direct and incremental costs to the Company’s franchise operations. These costs primarily relate to franchise development services, facilitating Franchise Flips and information technology services, which are charged to “Franchise support and other costs,” as incurred. Self-Insurance The Company is self-insured for most workers’ compensation losses and health care claims and purchases insurance for general liability and automotive liability losses, all subject to a $500 per occurrence retention or deductible limit. The Company provides for their estimated cost to settle both known claims and claims incurred but not yet reported. Liabilities associated with these claims are estimated, in part, by considering the frequency and severity of historical claims, both specific to us, as well as industry-wide loss experience and other actuarial assumptions. We determine our insurance obligations with the assistance of actuarial firms. Since there are many estimates and assumptions involved in recording insurance liabilities and in the case of workers’ compensation a significant period of time elapses before the ultimate resolution of claims, differences between actual future events and prior estimates and assumptions could result in adjustments to these liabilities. Leases Determination of Whether a Contract Contains a Lease The Company evaluates the contracts it enters into to determine whether such contracts contain leases. A contract contains a lease if the contract conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. At commencement, contracts containing a lease are further evaluated for classification as an operating or finance lease where the Company is a lessee, or as an operating, sales-type or direct financing lease where the Company is a lessor, based on their terms. ROU Model and Determination of Lease Term The Company uses the right-of-use (“ROU”) model to account for leases where the Company is the lessee, which requires an entity to recognize a lease liability and ROU asset on the lease commencement date. A lease liability is measured equal to the present value of the remaining lease payments over the lease term and is discounted using the incremental borrowing rate, as the rate implicit in the Company’s leases is not readily determinable. The incremental borrowing rate is the rate of interest that the Company would have to pay to borrow, on a collateralized basis over a similar term, an amount equal to the lease payments in a similar economic environment. Lease payments include payments made before the commencement date and any residual value guarantees, if applicable. The initial ROU asset consists of the initial measurement of the lease liability, adjusted for any favorable or unfavorable terms for leases acquired from franchisees, as well as payments made before the commencement date, initial direct costs and lease incentives earned. When determining the lease term, the Company includes option periods that it is reasonably certain to exercise as failure to renew the lease would impose a significant economic detriment. For properties used for Company-operated restaurants, the primary economic detriment relates to the existence of unamortized leasehold improvements which might be impaired if we choose not to exercise the available renewal options. The lease term for properties leased or subleased to franchisees is determined based upon the economic detriment to the franchisee and includes consideration of the length of the franchise agreement and historical performance of the restaurant. Lease terms for real estate are generally initially between 15 and 20 years and, in most cases, provide for rent escalations and renewal options. Operating Leases For operating leases, minimum lease payments or receipts, including minimum scheduled rent increases, are recognized as rent expense where the Company is a lessee, or income where the Company is a lessor, as applicable, on a straight-line basis (“Straight-Line Rent”) over the applicable lease terms. There is a period under certain lease agreements referred to as a rent holiday (“Rent Holiday”) that generally begins on the possession date and ends on the rent commencement date. During a Rent Holiday, no cash rent payments are typically due under the terms of the lease; however, expense is recorded for that period on a straight-line basis. The excess of the Straight-Line Rent over the minimum rents paid is included in the ROU asset where the Company is a lessee. The excess of the Straight-Line Rent over the minimum rents received is recorded as a deferred lease asset and is included in “Other assets” where the Company is a lessor. Certain leases contain provisions, referred to as contingent rent (“Contingent Rent”), that require additional rental payments based upon restaurant sales volume. Contingent Rent is recognized each period as the liability is incurred or the asset is earned. Lease cost for operating leases includes the amortization of the ROU asset and interest expense related to the operating lease liability. Variable lease cost for operating leases includes Contingent Rent and payments for executory costs such as real estate taxes, insurance and common area maintenance, which are excluded from the measurement of the lease liability. Short-term lease cost for operating leases includes rental expense for leases with a term of less than 12 months. Lease costs are recorded in the consolidated statements of operations based on the nature of the underlying lease as follows: (1) rental expense related to leases for Company-operated restaurants is recorded to “Cost of sales,” (2) rental expense for leased properties that are subsequently subleased to franchisees is recorded to “Franchise rental expense” and (3) rental expense related to leases for corporate offices and equipment is recorded to “General and administrative.” Favorable and unfavorable lease amounts for operating leases where the Company is the lessor are recorded as components of “Other intangible assets” and “Other liabilities,” respectively. Favorable and unfavorable lease amounts are amortized on a straight-line basis over the term of the leases. Rental income and favorable and unfavorable lease amortization for operating leases on properties leased or subleased to franchisees is recorded to “Franchise rental income.” Lessees’ variable payments to the Company for executory costs under operatin |
Revenue (Notes)
Revenue (Notes) | 12 Months Ended |
Jan. 02, 2022 | |
Revenue [Abstract] | |
Revenue from Contract with Customer | Revenue Nature of Goods and Services The Company generates revenues from sales at Company-operated restaurants and earns fees and rental income from franchised restaurants. Revenues are recognized upon delivery of food to the customer at Company-operated restaurants or upon the fulfillment of terms outlined in the franchise agreement for franchised restaurants. The franchise agreement provides the franchisee the right to construct, own and operate a Wendy’s restaurant upon a site accepted by Wendy’s and to use the Wendy’s system in connection with the operation of the restaurant at that site. The franchise agreement generally provides for a 20-year term and a 10-year renewal subject to certain conditions. The initial term may be extended up to 25 years and the renewal extended up to 20 years for qualifying restaurants under certain new restaurant development and reimaging programs. The franchise agreement requires that the franchisee pay a royalty based on a percentage of sales at the franchised restaurant, as well as make contributions to the Advertising Funds based on a percentage of sales. Wendy’s may offer development incentive programs from time to time that provide for a discount or lesser royalty amount or Advertising Fund contribution for a limited period of time. The agreement also typically requires that the franchisee pay Wendy’s a technical assistance fee. The technical assistance fee is used to defray some of the costs to Wendy’s for training, start-up and transitional services related to new and existing franchisees acquiring restaurants and in the development and opening of new restaurants. The franchise agreement also requires that the franchisee pay an annual fee for technology services. The technology fee is a flat fee dependent on each restaurant’s sales. Wendy’s also enters into development agreements with certain franchisees. The development agreement generally provides the franchisee with the right to develop a specified number of new Wendy’s restaurants using the Image Activation design within a stated, non-exclusive territory for a specified period, subject to the franchisee meeting interim new restaurant development requirements. Wendy’s owns and leases sites from third parties, which it leases and/or subleases to franchisees. Noncancelable lease terms are generally initially between 15 and 20 years and, in most cases, provide for rent escalations and renewal options. The initial lease term for properties leased or subleased to franchisees is generally set to be coterminous with the initial 20-year term of the related franchise agreement and any renewal term is coterminous with the 10-year renewal term of the related franchise agreement. Royalties and contributions to the Advertising Funds are generally due within the month subsequent to which the revenue was generated through sales at the franchised restaurant. Technical assistance fees and renewal fees are generally due upon execution of the related franchise agreement. Annual technology fees are due in quarterly installments. Rental income is due in accordance with the terms of each lease, which is generally at the beginning of each month. Disaggregation of Revenue The following tables disaggregate revenue by segment and source for 2021, 2020 and 2019: Wendy’s U.S. Wendy’s International Global Real Estate & Development Total 2021 Sales at Company-operated restaurants $ 730,415 $ 3,659 $ — $ 734,074 Franchise royalty revenue 407,317 53,392 — 460,709 Franchise fees 64,170 5,391 6,478 76,039 Franchise rental income — — 236,655 236,655 Advertising funds revenue 365,594 23,927 — 389,521 Total revenues $ 1,567,496 $ 86,369 $ 243,133 $ 1,896,998 2020 Sales at Company-operated restaurants $ 722,764 $ — $ — $ 722,764 Franchise royalty revenue 373,162 43,346 — 416,508 Franchise fees 22,126 1,962 4,153 28,241 Franchise rental income — — 232,648 232,648 Advertising funds revenue 313,330 20,334 — 333,664 Total revenues $ 1,431,382 $ 65,642 $ 236,801 $ 1,733,825 2019 Sales at Company-operated restaurants $ 707,485 $ — $ — $ 707,485 Franchise royalty revenue 355,702 44,998 — 400,700 Franchise fees 21,889 2,978 3,432 28,299 Franchise rental income — — 233,065 233,065 Advertising funds revenue 319,231 20,222 — 339,453 Total revenues $ 1,404,307 $ 68,198 $ 236,497 $ 1,709,002 Contract Balances The following table provides information about receivables and contract liabilities (deferred franchise fees) from contracts with customers: Year End January 2, January 3, 2021 (a) Receivables, which are included in “Accounts and notes receivable, net” (b) $ 49,168 $ 57,677 Receivables, which are included in “Advertising funds restricted assets” 65,497 63,252 Deferred franchise fees (c) 97,186 97,785 _______________ (a) Excludes funds collected from the sale of gift cards, which are primarily reimbursed to franchisees upon redemption at franchised restaurants and do not ultimately result in the recognition of revenue in the Company’s consolidated statements of operations. (b) Includes receivables related to “Sales” and “Franchise royalty revenue and fees.” (c) Deferred franchise fees are included in “Accrued expenses and other current liabilities” and “Deferred franchise fees” and totaled $9,084 and $88,102 as of January 2, 2022, respectively, and $8,691 and $89,094 as of January 3, 2021, respectively. Significant changes in deferred franchise fees are as follows: Year Ended 2021 2020 2019 Deferred franchise fees at beginning of period $ 97,785 $ 100,689 $ 102,205 Revenue recognized during the period (19,838) (8,955) (9,487) New deferrals due to cash received and other 19,239 6,051 7,971 Deferred franchise fees at end of period $ 97,186 $ 97,785 $ 100,689 Anticipated Future Recognition of Deferred Franchise Fees The following table reflects the estimated franchise fees to be recognized in the future related to performance obligations that are unsatisfied at the end of the period: Estimate for fiscal year: 2022 $ 9,084 2023 6,284 2024 6,096 2025 5,911 2026 5,795 Thereafter 64,016 $ 97,186 |
Acquisitions
Acquisitions | 12 Months Ended |
Jan. 02, 2022 | |
Business Combinations [Abstract] | |
Acquisitions | (3) Acquisitions During 2021 and 2019, the Company acquired 93 restaurants and five restaurants from franchisees, respectively. No restaurants were acquired from franchisees during 2020. The Company did not incur any material acquisition-related costs associated with the acquisitions and such transactions were not significant to our consolidated financial statements. The table below presents the allocation of the total purchase price to the fair value of assets acquired and liabilities assumed for restaurants acquired from franchisees: Year Ended 2021 (a) 2019 Restaurants acquired from franchisees (b) 93 5 Total consideration paid, net of cash received $ 127,948 $ 5,052 Identifiable assets acquired and liabilities assumed: Properties 21,984 666 Acquired franchise rights 81,239 1,354 Finance lease assets 25,547 5,350 Operating lease assets 44,282 — Finance lease liabilities (25,059) (4,084) Operating lease liabilities (43,478) — Other (9) (2,316) Total identifiable net assets 104,506 970 Goodwill $ 23,442 $ 4,082 _______________ (a) The fair value of the assets acquired are provisional amounts as of January 2, 2022, pending final purchase accounting adjustments. The Company utilized management estimates and consultation with an independent third-party valuation firm to assist in the valuation process. (b) 2021 includes two restaurants under construction and not operating as of January 2, 2022. NPC Quality Burgers, Inc. (“NPC”) As previously announced, NPC, formerly the Company’s largest franchisee, filed for chapter 11 bankruptcy in July 2020 and commenced a process to sell all or substantially all of its assets, including its interest in approximately 393 Wendy’s restaurants across eight different markets, pursuant to a court-approved auction process. On November 18, 2020, the Company submitted a consortium bid together with a group of pre-qualified franchisees to acquire NPC’s Wendy’s restaurants. Under the terms of the consortium bid, several existing and new franchisees would have been the ultimate purchasers of seven of the NPC markets, while the Company would have acquired one market. As part of the consortium bid, the Company submitted a deposit of $43,240, which was included in “Prepaid expenses and other current assets” as of January 3, 2021. The deposit included $38,361 received from the group of prequalified franchisees, which was payable to the franchisees and included in “Accrued expenses and other current liabilities” as of January 3, 2021 pending resolution of the bankruptcy sale process. During the three months ended April 4, 2021, following a court-approved mediation process, NPC and certain affiliates of Flynn Restaurant Group (“FRG”) and the Company entered into separate asset purchase agreements under which all of NPC’s Wendy’s restaurants were sold to Wendy’s approved franchisees. Under the transaction, FRG acquired approximately half of NPC’s Wendy’s restaurants in four markets, while several existing Wendy’s franchisees that were part of the Company’s consortium bid acquired the other half of NPC’s Wendy’s restaurants in the other four markets. The Company did not acquire any restaurants as part of this transaction. In addition, the deposits outstanding as of January 3, 2021 were settled during the three months ended April 4, 2021 upon resolution of the bankruptcy sale process. The net settlement of deposits of $4,879 is included in “Acquisitions” in the consolidated statements of cash flows. |
System Optimization Gains, Net
System Optimization Gains, Net | 12 Months Ended |
Jan. 02, 2022 | |
System optimization gains, net | |
System Optimization Gains, Net | Properties Year End January 2, 2022 January 3, 2021 Land $ 370,742 $ 372,473 Buildings and improvements 504,462 504,504 Leasehold improvements 422,094 409,306 Office, restaurant and transportation equipment 282,770 255,469 1,580,068 1,541,752 Accumulated depreciation and amortization (673,201) (625,863) $ 906,867 $ 915,889 Depreciation and amortization expense related to properties was $68,298, $77,656 and $81,219 during 2021, 2020 and 2019, respectively. |
System Optimization | |
System optimization gains, net | |
System Optimization Gains, Net | System Optimization Gains, Net The Company’s system optimization initiative included a shift from Company-operated restaurants to franchised restaurants over time, through acquisitions and dispositions, as well as facilitating Franchise Flips. As of January 1, 2017, the Company achieved its plan to reduce its ongoing Company-operated restaurant ownership to approximately 5% of the total system. While the Company has no plans to move its ownership away from approximately 5% of the total system, the Company expects to continue to optimize the Wendy’s system through Franchise Flips, as well as evaluating strategic acquisitions of franchised restaurants and strategic dispositions of Company-operated restaurants to existing and new franchisees, to further strengthen the franchisee base, drive new restaurant development and accelerate reimages. During 2021, 2020 and 2019, the Company facilitated 34, 54 and 37 Franchise Flips, respectively. Additionally, during 2021, the Company completed the sale of 47 Company-operated restaurants in New York (including Manhattan) to franchisees and, during 2020, completed the sale of one Company-operated restaurant to a franchisee. No Company-operated restaurants were sold to franchisees during 2019. Gains and losses recognized on dispositions are recorded to “System optimization gains, net” in our consolidated statements of operations. Costs related to acquisitions and dispositions under our system optimization initiative are recorded to “Reorganization and realignment costs,” which are further described in Note 5. All other costs incurred related to facilitating Franchise Flips are recorded to “Franchise support and other costs.” The following is a summary of the disposition activity recorded as a result of our system optimization initiative: Year Ended 2021 2020 2019 Number of restaurants sold to franchisees 47 1 — Proceeds from sales of restaurants (a) $ 50,518 $ 50 $ — Net assets sold (b) (16,939) (34) — Goodwill related to sales of restaurants (4,847) — — Net unfavorable leases (c) (2,939) — — Gain on sales-type leases 7,156 — — Other (d) (2,148) — — 30,801 16 — Post-closing adjustments on sales of restaurants (e) (f) 1,218 362 1,087 Gain on sales of restaurants, net 32,019 378 1,087 Gain on sales of other assets, net (g) 1,526 2,770 196 System optimization gains, net $ 33,545 $ 3,148 $ 1,283 _______________ (a) In addition to the proceeds noted herein, the Company received cash proceeds of $39 during 2021 related to a note receivable issued in connection with the sale of the Manhattan Company-operated restaurants. (b) Net assets sold consisted primarily of equipment. (c) During 2021, the Company recorded favorable lease assets of $3,799 and unfavorable lease liabilities of $6,738 as a result of leasing and/or subleasing land, buildings and/or leasehold improvements to franchisees, in connection with the sale of the New York Company-operated restaurants (including Manhattan). (d) 2021 includes a deferred gain of $3,500 as a result of certain contingencies related to the extension of lease terms. (e) 2021 includes a gain on sales-type leases of $1,625 and the write-off of certain lease assets of $927 as a result of an amendment to lease terms in connection with a Manhattan Company-operated restaurant previously sold to a franchisee. (f) 2021, 2020 and 2019 include the recognition of deferred gains of $515, $368 and $911, respectively, as a result of the resolution of certain contingencies related to the extension of lease terms for restaurants previously sold to franchisees. (g) During 2021, 2020 and 2019, Wendy’s received cash proceeds of $4,561, $6,041 and $3,448, respectively, primarily from the sale of surplus and other properties. Assets Held for Sale Year End January 2, 2022 January 3, 2021 Number of restaurants classified as held for sale — 43 Net restaurant assets held for sale (a) $ — $ 20,587 Other assets held for sale (b) $ 3,541 $ 1,732 _______________ (a) Net restaurant assets held for sale as of January 3, 2021 included New York Company-operated restaurants (excluding Manhattan) and consisted primarily of cash, inventory, property and an estimate of allocable goodwill. During the three months ended April 4, 2021, the Company also classified its four Manhattan restaurants as held for sale. (b) Other assets held for sale primarily consist of surplus properties. Assets held for sale are included in “Prepaid expenses and other current assets.” |
Reorganization and Realignment
Reorganization and Realignment Costs | 12 Months Ended |
Jan. 02, 2022 | |
Restructuring and Related Activities [Abstract] | |
Reorganization and Realignment Costs | Reorganization and Realignment Costs The following is a summary of the initiatives included in “Reorganization and realignment costs:” Year Ended 2021 2020 2019 Operations and field realignment $ 1,758 $ 3,801 $ — IT realignment (10) 7,288 9,127 G&A realignment (52) 614 7,749 System optimization initiative 6,852 4,327 89 Reorganization and realignment costs $ 8,548 $ 16,030 $ 16,965 Operations and Field Realignment In September 2020, the Company initiated a plan to reallocate resources to better support the long-term growth strategies for Company and franchise operations (the “Operations and Field Realignment Plan”). The Operations and Field Realignment Plan realigned the Company’s restaurant operations team, including transitioning from separate leaders of Company and franchise operations to a single leader of all U.S. restaurant operations. The Operations and Field Realignment Plan also included contract terminations, including the closure of certain field offices. During 2021 and 2020, the Company recognized costs totaling $1,758 and $3,801, respectively, which primarily included third-party and other costs in 2021 and severance and related employee costs and share-based compensation in 2020. The Company does not expect to incur any material additional costs under the Operations and Field Realignment Plan. The following is a summary of the activity recorded as a result of the Operations and Field Realignment Plan: Year Ended Total Incurred Since Inception 2021 2020 Severance and related employee costs $ 270 $ 3,113 $ 3,383 Third-party and other costs 1,488 67 1,555 1,758 3,180 4,938 Share-based compensation (a) — 621 621 Total operations and field realignment $ 1,758 $ 3,801 $ 5,559 _______________ (a) Primarily represents incremental share-based compensation resulting from the modification of stock options in connection with the termination of employees under the Operations and Field Realignment Plan. As of January 2, 2022, the accruals for the Operations and Field Realignment Plan are included in “Accrued expenses and other current liabilities.” As of January 3, 2021, the accruals for the Operations and Field Realignment Plan are included in “Accrued expenses and other current liabilities” and “Other liabilities” and totaled $2,487 and $113, respectively. The tables below present a rollforward of our accruals for the Operations and Field Realignment Plan. Balance January 3, 2021 Charges Payments Balance January 2, 2022 Severance and related employee costs $ 2,600 $ 270 $ (2,715) $ 155 Third-party and other costs — 1,488 (1,477) 11 $ 2,600 $ 1,758 $ (4,192) $ 166 Balance December 29, 2019 Charges Payments Balance January 3, 2021 Severance and related employee costs $ — $ 3,113 $ (513) $ 2,600 Third-party and other costs — 67 (67) — $ — $ 3,180 $ (580) $ 2,600 Information Technology ( “ IT ”) Realignment In December 2019, our Board of Directors approved a plan to realign and reinvest resources in the Company’s IT organization to strengthen its ability to accelerate growth (the “IT Realignment Plan”). The Company has partnered with a third-party global IT consultant on this new structure to leverage their global capabilities, enabling a more seamless integration between its digital and corporate IT assets. The IT Realignment Plan has reduced certain employee compensation and other related costs that the Company has reinvested back into IT to drive additional capabilities and capacity across all of its technology platforms. Additionally, in June 2020, the Company made changes to its leadership structure that included the elimination of the Chief Digital Experience Officer position and the creation of a Chief Information Officer position, for which the Company completed the hiring process in October 2020. During 2020 and 2019, the Company recognized costs totaling $7,288 and $9,127, respectively, which primarily included third-party and other costs and recruitment and relocation costs in 2020 and severance and related employee costs and third-party and other costs in 2019. The Company does not expect to incur any material additional costs under the IT Realignment Plan. The following is a summary of the activity recorded as a result of the IT Realignment Plan: Year Ended Total Incurred Since Inception 2021 2020 2019 Severance and related employee costs (a) $ (165) $ 843 $ 7,548 $ 8,226 Recruitment and relocation costs 146 1,296 — 1,442 Third-party and other costs 9 5,149 1,386 6,544 (10) 7,288 8,934 16,212 Share-based compensation (b) — — 193 193 Total IT realignment $ (10) $ 7,288 $ 9,127 $ 16,405 _______________ (a) 2021 includes a reversal of an accrual as a result of a change in estimate. (b) Primarily represents incremental share-based compensation resulting from the modification of stock options in connection with the termination of employees under the IT realignment plan. The tables below present a rollforward of our accruals for the IT Realignment Plan, which are included in “Accrued expenses and other current liabilities” as of January 2, 2022 and January 3, 2021. Balance January 3, 2021 Charges Payments Balance January 2, 2022 Severance and related employee costs $ 1,508 $ (165) $ (1,250) $ 93 Recruitment and relocation costs — 146 (146) — Third-party and other costs — 9 (9) — $ 1,508 $ (10) $ (1,405) $ 93 Balance December 29, 2019 Charges Payments Balance January 3, 2021 Severance and related employee costs $ 7,548 $ 843 $ (6,883) $ 1,508 Recruitment and relocation costs — 1,296 (1,296) — Third-party and other costs 1,076 5,149 (6,225) — $ 8,624 $ 7,288 $ (14,404) $ 1,508 General and Administrative ( “ G&A ”) Realignment In May 2017, the Company initiated a plan to reduce its G&A expenses (the “G&A Realignment Plan”). Additionally, in May 2019, the Company announced changes to its management and operating structure that included the creation of two new positions, a President, U.S. and Chief Commercial Officer and a President, International and Chief Development Officer, and the elimination of the Chief Operations Officer position. During 2020 and 2019, the Company recognized costs totaling $614 and $7,749, respectively, which primarily included recruitment and relocation costs and share-based compensation in 2020 and severance and related employee costs and share-based compensation in 2019. The Company does not expect to incur any material additional costs under the G&A Realignment Plan. The following is a summary of the activity recorded as a result of the G&A Realignment Plan: Year Ended Total Incurred 2021 2020 2019 Severance and related employee costs (a) $ (74) $ 28 $ 5,485 $ 24,192 Recruitment and relocation costs 1 360 950 2,877 Third-party and other costs 2 13 100 2,225 (71) 401 6,535 29,294 Share-based compensation (b) 19 213 1,214 8,130 Termination of defined benefit plans — — — 1,335 Total G&A realignment $ (52) $ 614 $ 7,749 $ 38,759 _______________ (a) 2021 includes a reversal of an accrual as a result of a change in estimate. (b) Primarily represents incremental share-based compensation resulting from the modification of stock options in connection with the termination of employees under the G&A Realignment Plan. The tables below present a rollforward of our accruals for the G&A Realignment Plan, which are included in “Accrued expenses and other current liabilities” as of January 2, 2022 and January 3, 2021. Balance Charges Payments Balance Severance and related employee costs $ 932 $ (74) $ (847) $ 11 Recruitment and relocation costs — 1 (1) — Third-party and other costs — 2 (2) — $ 932 $ (71) $ (850) $ 11 Balance Charges Payments Balance Severance and related employee costs $ 5,276 $ 28 $ (4,372) $ 932 Recruitment and relocation costs 83 360 (443) — Third-party and other costs — 13 (13) — $ 5,359 $ 401 $ (4,828) $ 932 System Optimization Initiative The Company recognizes costs related to acquisitions and dispositions under its system optimization initiative. During 2021, the Company recognized costs totaling $6,852, which were primarily comprised of the write-off of certain lease assets, lease termination fees and transaction fees associated with the NPC bankruptcy sale process, as well as professional fees and transaction fees associated with the Company’s acquisition of 93 franchise-operated restaurants in Florida during the fourth quarter of 2021. During 2020, the Company recognized costs totaling $4,327, which primarily included professional fees related to the NPC bankruptcy sale process. See Note 3 for further information. The Company expects to recognize a gain of approximately $800, primarily related to the write-off of certain NPC-related lease liabilities upon final termination of the leases. The following is a summary of the costs recorded as a result of our system optimization initiative: Year Ended Total Incurred Since Inception 2021 2020 2019 Severance and related employee costs $ 661 $ — $ — $ 18,898 Professional fees 1,570 4,323 72 23,677 Other (a) 1,765 4 17 7,618 3,996 4,327 89 50,193 Accelerated depreciation and amortization (b) — — — 25,398 NPC lease termination costs (c) 2,856 — — 2,856 Share-based compensation (d) — — — 5,013 Total system optimization initiative $ 6,852 $ 4,327 $ 89 $ 83,460 _______________ (a) 2021 includes transaction fees of $1,350 associated with the NPC bankruptcy sale process. (b) Primarily includes accelerated amortization of previously acquired franchise rights related to the Company-operated restaurants in territories that have been sold to franchisees in connection with our system optimization initiative. (c) 2021 includes the write-off of lease assets of $1,376 and lease termination fees paid of $1,480. (d) Represents incremental share-based compensation resulting from the modification of stock options and performance-based awards in connection with the termination of employees under our system optimization initiative. The tables below present a rollforward of our accruals for our system optimization initiative, which were included in “Accrued expenses and other current liabilities” as of January 3, 2021. Balance Charges Payments Balance Severance and related employee costs $ — $ 661 $ (661) $ — Professional fees 1,230 1,570 (2,800) — Other — 1,765 (1,765) — $ 1,230 $ 3,996 $ (5,226) $ — Balance Charges Payments Balance Professional fees $ — $ 4,323 $ (3,093) $ 1,230 Other — 4 (4) — $ — $ 4,327 $ (3,097) $ 1,230 |
Net Income Per Share
Net Income Per Share | 12 Months Ended |
Jan. 02, 2022 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | Net Income Per Share The calculation of basic and diluted net income per share was as follows: Year Ended 2021 2020 2019 Net income $ 200,392 $ 117,832 $ 136,940 Common stock: Weighted average basic shares outstanding 221,375 223,684 229,944 Dilutive effect of stock options and restricted shares 3,030 4,330 5,131 Weighted average diluted shares outstanding 224,405 228,014 235,075 Net income per share: Basic $ .91 $ .53 $ .60 Diluted $ .89 $ .52 $ .58 Basic net income per share for 2021, 2020 and 2019 was computed by dividing net income amounts by the weighted average number of shares of common stock outstanding. Diluted net income per share was computed by dividing net income by the weighted average number of basic shares outstanding plus the potential common share effect of dilutive stock options and restricted shares. We excluded potential common shares of 2,404, 2,064 and 2,518 for 2021, 2020 and 2019, respectively, from our diluted net income per share calculation as they would have had anti-dilutive effects. |
Cash and Receivables (Notes)
Cash and Receivables (Notes) | 12 Months Ended |
Jan. 02, 2022 | |
Cash and Receivables [Abstract] | |
Cash and Receivables | Cash and Receivables Year End January 2, 2022 January 3, 2021 Cash and cash equivalents Cash $ 249,438 $ 231,922 Cash equivalents — 75,067 249,438 306,989 Restricted cash Accounts held by trustee for the securitized financing facility 27,188 33,635 Other 347 338 27,535 33,973 Advertising Funds (a) 89,993 77,279 117,528 111,252 Total cash, cash equivalents and restricted cash $ 366,966 $ 418,241 _______________ (a) Included in “Advertising funds restricted assets.” Year End January 2, 2022 January 3, 2021 Gross Allowance for Doubtful Accounts Net Gross Allowance for Doubtful Accounts Net Accounts and Notes Receivable, Net Current Accounts receivable (a) (b) $ 104,744 $ (3,229) $ 101,515 $ 97,399 $ (3,739) $ 93,660 Notes receivable from franchisees (c) (d) 23,000 (4,975) 18,025 21,227 (4,996) 16,231 $ 127,744 $ (8,204) $ 119,540 $ 118,626 $ (8,735) $ 109,891 Non-current (e) Notes receivable from franchisees (d) $ 4,514 $ (315) $ 4,199 $ 6,759 $ (629) $ 6,130 _______________ (a) Includes income tax refund receivables of $11,901 and $5,399 as of January 2, 2022 and January 3, 2021, respectively. (b) As of January 3, 2021, included incremental rent receivables of $5,226 due to actions taken by the Company in response to the COVID-19 pandemic, which included offering to defer base rent payments on properties owned by Wendy’s and leased to franchisees by 50% and offering to pass along any deferrals that were obtained on properties leased by Wendy’s and subleased to franchisees by up to 100%, beginning in May for a three month period, which were substantially repaid over a 12 month period beginning in August 2020. (c) Includes the current portion of sales-type and direct financing lease receivables of $6,266 and $5,965 as of January 2, 2022 and January 3, 2021, respectively. See Note 20 for further information. (d) Includes a note receivable from a franchisee in India, of which $335 and $356 are included in current notes receivable and $315 and $629 are included in non-current notes receivable as of January 2, 2022 and January 3, 2021, respectively. As of January 2, 2022 and January 3, 2021, the Company had reserves of $650 and $985, respectively, on the loan outstanding to the franchisee in India. Includes a note receivable from a franchisee in Indonesia, of which $1,795 and $831 are included in current notes receivable as of January 2, 2022 and January 3, 2021, respectively, and $1,780 which is included in non-current notes receivable as of January 3, 2021. Includes notes receivable related to the Brazil JV, of which $12,925 and $12,775 are included in current notes receivable and $4,200 and $4,350 are included in non-current notes receivable as of January 2, 2022 and January 3, 2021, respectively. As of both January 2, 2022 and January 3, 2021, the Company had reserves of $4,640 on the loans outstanding related to the Brazil JV. See Note 8 for further information. (e) Included in “Other assets.” The following is an analysis of the allowance for doubtful accounts: Accounts Receivable Notes Receivable Total 2021 Balance at January 3, 2021 $ 3,739 $ 5,625 $ 9,364 Provision for doubtful accounts (148) (335) (483) Uncollectible accounts written off, net of recoveries (362) — (362) Balance at January 2, 2022 $ 3,229 $ 5,290 $ 8,519 2020 Balance at December 29, 2019 $ 3,314 $ 6,705 $ 10,019 Provision for doubtful accounts 647 206 853 Uncollectible accounts written off, net of recoveries (222) (1,286) (1,508) Balance at January 3, 2021 $ 3,739 $ 5,625 $ 9,364 2019 Balance at December 30, 2018 $ 4,939 $ 2,000 $ 6,939 Provision for doubtful accounts (1,618) 4,912 3,294 Uncollectible accounts written off, net of recoveries (7) (207) (214) Balance at December 29, 2019 $ 3,314 $ 6,705 $ 10,019 |
Investments
Investments | 12 Months Ended |
Jan. 02, 2022 | |
Investments [Abstract] | |
Investments | Investments The following is a summary of the carrying value of our investments: Year End January 2, January 3, Equity method investments $ 39,870 $ 44,574 Other investments in equity securities 10,000 — $ 49,870 $ 44,574 Equity Method Investments Wendy’s has a 50% share in the TimWen real estate joint venture and a 20% share in the Brazil JV, both of which are accounted for using the equity method of accounting, under which our results of operations include our share of the income (loss) of the investees in “Other operating income, net.” A wholly-owned subsidiary of Wendy’s entered into the Brazil JV during the second quarter of 2015 for the operation of Wendy’s restaurants in Brazil. Wendy’s, Starboard International Holdings B.V. and Infinity Holding E Participações Ltda. contributed $1, $2 and $2, respectively, each receiving proportionate equity interests of 20%, 40% and 40%, respectively. The Company did not receive any distributions and our share of the Brazil JV’s net losses was $417 and $1,022 during 2020 and 2019, respectively. The Brazil JV has ceased operations and no income or loss was recorded during 2021. A wholly-owned subsidiary of Wendy’s has loans outstanding related to the Brazil JV totaling $17,125 as of both January 2, 2022 and January 3, 2021. The loans are denominated in U.S. Dollars, which is also the functional currency of the subsidiary; therefore, there is no exposure to changes in foreign currency rates. The loans bear interest at rates ranging from 3.25% to 6.5% per year. Of the total loans outstanding as of January 2, 2022, $12,775 was due primarily in the fourth quarter of 2020 and $4,350 is due primarily in 2024. As of January 2, 2022 and January 3, 2021, the Company had reserves of $4,640 on the past due loans related to the Brazil JV. The Company is currently pursuing collection of certain of the past due amounts. See Note 7 for further information. The carrying value of our investment in TimWen exceeded our interest in the underlying equity of the joint venture by $20,532 and $23,433 as of January 2, 2022 and January 3, 2021, respectively, primarily due to purchase price adjustments from the 2008 merger of Triarc Companies, Inc. and Wendy’s International, Inc. (the “Wendy’s Merger”). Presented below is activity related to our portion of TimWen and the Brazil JV included in our consolidated balance sheets and consolidated statements of operations as of and for the years ended January 2, 2022, January 3, 2021 and December 29, 2019. Year Ended 2021 2020 2019 Balance at beginning of period $ 44,574 $ 45,310 $ 47,021 Equity in earnings for the period 14,329 8,389 10,943 Amortization of purchase price adjustments (a) (3,126) (2,293) (2,270) 11,203 6,096 8,673 Distributions received (16,337) (8,376) (13,400) Foreign currency translation adjustment included in “Other comprehensive income” and other 430 1,544 3,016 Balance at end of period $ 39,870 $ 44,574 $ 45,310 _______________ (a) Purchase price adjustments that impacted the carrying value of the Company’s investment in TimWen are being amortized over the average original aggregate life of 21 years. Other Investments in Equity Securities During 2021, the Company made an investment in equity securities of $10,000. In October 2019, the Company received a $25,000 cash settlement related to a previously held investment. As a result, the Company recorded $24,366 to “Investment income (loss), net” and $634 to “General and administrative” for the reimbursement of related costs during the fourth quarter of 2019. |
Properties (Notes)
Properties (Notes) | 12 Months Ended |
Jan. 02, 2022 | |
Property, Plant and Equipment [Abstract] | |
Properties | Properties Year End January 2, 2022 January 3, 2021 Land $ 370,742 $ 372,473 Buildings and improvements 504,462 504,504 Leasehold improvements 422,094 409,306 Office, restaurant and transportation equipment 282,770 255,469 1,580,068 1,541,752 Accumulated depreciation and amortization (673,201) (625,863) $ 906,867 $ 915,889 Depreciation and amortization expense related to properties was $68,298, $77,656 and $81,219 during 2021, 2020 and 2019, respectively. |
Goodwill And Other Intangible A
Goodwill And Other Intangible Assets | 12 Months Ended |
Jan. 02, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill activity for 2021 and 2020 was as follows: Wendy’s U.S. Wendy’s Global Real Estate & Development Total Balance at December 29, 2019: Goodwill, gross $ 602,491 $ 40,269 $ 122,548 $ 765,308 Accumulated impairment losses (a) — (9,397) — (9,397) Goodwill, net 602,491 30,872 122,548 755,911 Changes in goodwill: Restaurant dispositions (b) (5,394) — — (5,394) Currency translation adjustment and other (223) 755 — 532 Balance at January 3, 2021: Goodwill, gross 596,874 41,024 122,548 760,446 Accumulated impairment losses (a) — (9,397) — (9,397) Goodwill, net 596,874 31,627 122,548 751,049 Changes in goodwill: Restaurant acquisitions 23,442 — — 23,442 Restaurant dispositions (b) 547 — — 547 Currency translation adjustment and other — 240 — 240 Balance at January 2, 2022: Goodwill, gross 620,863 41,264 122,548 784,675 Accumulated impairment losses (a) — (9,397) — (9,397) Goodwill, net $ 620,863 $ 31,867 $ 122,548 $ 775,278 _______________ (a) Accumulated impairment losses resulted from the full impairment of goodwill of the Wendy’s international franchise restaurants during the fourth quarter of 2013. (b) During 2020, in connection with the Company’s plan to sell 43 Company-operated restaurants in New York (excluding Manhattan) in the second quarter of 2021, goodwill of $5,394 was reclassified to assets held for sale. The goodwill allocated to the sale was decreased by $568 during 2021 upon final disposition of the restaurants. In addition, during 2021, goodwill of $21 was reclassified to assets held for sale in connection with the Company’s sale of its four Manhattan restaurants. See Note 4 for further information. The following is a summary of the components of other intangible assets and the related amortization expense: Year End January 2, 2022 January 3, 2021 Cost Accumulated Amortization Net Cost Accumulated Amortization Net Indefinite-lived: Trademarks $ 903,000 $ — $ 903,000 $ 903,000 $ — $ 903,000 Definite-lived: Franchise agreements 349,391 (220,663) 128,728 349,255 (203,938) 145,317 Favorable leases 159,488 (62,136) 97,352 163,015 (55,581) 107,434 Reacquired rights under franchise agreements 91,111 (4,732) 86,379 9,872 (3,414) 6,458 Software 234,574 (169,242) 65,332 206,741 (143,990) 62,751 $ 1,737,564 $ (456,773) $ 1,280,791 $ 1,631,883 $ (406,923) $ 1,224,960 Aggregate amortization expense: Actual for fiscal year: 2019 $ 53,182 2020 52,588 2021 55,236 Estimate for fiscal year: 2022 $ 53,690 2023 49,919 2024 45,315 2025 38,088 2026 32,234 Thereafter 158,545 |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 12 Months Ended |
Jan. 02, 2022 | |
Accrued Liabilities [Abstract] | |
Accrued Expenses | Accrued Expenses and Other Current Liabilities Year End January 2, 2022 January 3, 2021 Accrued compensation and related benefits $ 63,835 $ 44,264 Accrued taxes 28,142 27,162 NPC consortium bid (a) — 38,361 Other 48,806 45,534 $ 140,783 $ 155,321 _______________ (a) Represented amounts received from franchisees as part of the consortium bid to acquire NPC’s Wendy’s restaurants. See Note 3 for further information. |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Jan. 02, 2022 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Long-term debt consisted of the following: Year End January 2, January 3, Series 2021-1 Class A-2 Notes: 2.370% Series 2021-1 Class A-2-I Notes, anticipated repayment date 2029 $ 447,750 $ — 2.775% Series 2021-1 Class A-2-II Notes, anticipated repayment date 2031 646,750 — Series 2019-1 Class A-2 Notes: 3.783% Series 2019-1 Class A-2-I Notes, anticipated repayment date 2026 368,000 386,000 4.080% Series 2019-1 Class A-2-II Notes, anticipated repayment date 2029 414,000 434,250 Series 2018-1 Class A-2 Notes: 3.573% Series 2018-1 Class A-2-I Notes, repaid in connection with the June 2021 refinancing — 436,500 3.884% Series 2018-1 Class A-2-II Notes, anticipated repayment date 2028 456,000 460,750 Series 2015-1 Class A-2 Notes: 4.497% Series 2015-1 Class A-2-III Notes, repaid in connection with the June 2021 refinancing — 473,750 Canadian revolving credit facility — 1,962 7% debentures, due in 2025 85,175 83,998 Unamortized debt issuance costs (37,009) (30,085) 2,380,666 2,247,125 Less amounts payable within one year (24,250) (28,962) Total long-term debt $ 2,356,416 $ 2,218,163 Aggregate annual maturities of long-term debt, excluding the effect of purchase accounting adjustments, as of January 2, 2022 were as follows: Fiscal Year 2022 $ 24,250 2023 24,250 2024 24,250 2025 114,250 2026 372,250 Thereafter 1,863,250 $ 2,422,500 Senior Notes Wendy’s Funding, LLC (“Wendy’s Funding”), a limited-purpose, bankruptcy-remote, wholly-owned indirect subsidiary of The Wendy’s Company, is the master issuer (the “Master Issuer”) of outstanding senior secured notes under a securitized financing facility that was entered into in June 2015. As of January 2, 2022, the Master Issuer issued the following outstanding series of fixed rate senior secured notes: (i) 2021-1 Class A-2-I with an initial principal amount of $450,000; (ii) 2021-1 Class A-2-II with an initial principal amount of $650,000; (iii) 2019-1 Class A-2-I with an initial principal amount of $400,000; (iv) 2019-1 Class A-2-II with an initial principal amount of $450,000; and (v) 2018-1 Class A-2-II with an initial principal amount of $475,000 (collectively, the “Class A-2 Notes”). In connection with the issuance of the Series 2021-1 Class A-2 Notes, the Master Issuer also entered into a revolving financing facility of Series 2021-1 Variable Funding Senior Secured Notes, Class A-1 (the “2021-1 Class A-1 Notes”), which allows for the drawing of up to $300,000 on a revolving basis using various credit instruments, including a letter of credit facility. No amounts were borrowed under the 2021-Class A-1 Notes during 2021. The Class A-2 Notes and the 2021-1 Class A-1 Notes are collectively referred to as the “Senior Notes.” The Master Issuer’s issuance of the 2021-1 Class A-1 Notes in June 2021 replaced the Company’s previous $150,000 Series 2019-1 Variable Funding Senior Secured Notes, Class A-1 (the “2019-1 Class A-1 Notes”) and $100,000 Series 2020-1 Variable Funding Senior Secured Notes, Class A-1 (the “2020-1 Class A-1 Notes”). In March 2020, the Company drew down $120,000 under the Series 2019-1 Class A-1 Notes, which was fully repaid in July 2020. In June 2020, the Master Issuer issued the Series 2020-1 Class A-1 Notes. The Senior Notes are secured by a security interest in substantially all of the assets of the Master Issuer and certain other limited-purpose, bankruptcy-remote, wholly-owned indirect subsidiaries of the Company that act as guarantors (collectively, the “Securitization Entities”), except for certain real estate assets and subject to certain limitations as set forth in the indenture governing the Senior Notes (the “Indenture”) and the related guarantee and collateral agreements. The assets of the Securitization Entities include most of the domestic and certain of the foreign revenue-generating assets of the Company and its subsidiaries, which principally consist of franchise-related agreements, certain Company-operated restaurants, intellectual property and license agreements for the use of intellectual property. Interest and principal payments on the Class A-2 Notes are payable on a quarterly basis. The requirement to make such quarterly principal payments on the Class A-2 Notes is subject to certain financial conditions set forth in the Indenture. The legal final maturity dates for the Class A-2 Notes range from 2048 through 2051. If the Master Issuer has not repaid or refinanced the Class A-2 Notes prior to their respective anticipated repayment dates, which range from 2026 through 2031, additional interest will accrue pursuant to the Indenture. The 2021-1 Class A-1 Notes accrue interest at a variable interest rate based on (i) the prime rate, (ii) overnight federal funds rates, (iii) the London interbank offered rate (“LIBOR”) for U.S. Dollars or (iv) with respect to advances made by conduit investors, the weighted average cost of, or related to, the issuance of commercial paper allocated to fund or maintain such advances, in each case plus any applicable margin and as specified in the respective purchase agreements for the 2021-1 Class A-1 Notes. There is a commitment fee on the unused portions of the 2021-1 Class A-1 Notes, which ranges from 0.40% to 0.75% based on utilization. As of January 2, 2022, $21,888 of letters of credit were outstanding against the 2021-1 Class A-1 Notes, which relate primarily to interest reserves required under the Indenture. Covenants and Restrictions The Senior Notes are subject to a series of covenants and restrictions customary for transactions of this type, including (i) that the Master Issuer maintains specified reserve accounts to be used to make required payments in respect of the Senior Notes, (ii) provisions relating to optional and mandatory prepayments and the related payment of specified amounts, including specified make-whole payments in the case of the Class A-2 Notes under certain circumstances, (iii) certain indemnification payments in the event, among other things, the assets pledged as collateral for the Senior Notes are in stated ways defective or ineffective and (iv) covenants relating to recordkeeping, access to information and similar matters. The Senior Notes are also subject to customary rapid amortization events provided for in the Indenture, including events tied to failure to maintain stated debt service coverage ratios, the sum of global gross sales for specified restaurants being below certain levels on certain measurement dates, certain manager termination events, an event of default, and the failure to repay or refinance the Class A-2 Notes on the applicable scheduled maturity date. The Senior Notes are also subject to certain customary events of default, including events relating to non-payment of required interest, principal, or other amounts due on or with respect to the Senior Notes, failure to comply with covenants within certain time frames, certain bankruptcy events, breaches of specified representations and warranties, failure of security interests to be effective, and certain judgments. In addition, the Indenture and the related management agreement contain various covenants that limit the Company and its subsidiaries’ ability to engage in specified types of transactions, subject to certain exceptions, including, for example, to (i) incur or guarantee additional indebtedness, (ii) sell certain assets, (iii) create or incur liens on certain assets to secure indebtedness or (iv) consolidate, merge, sell or otherwise dispose of all or substantially all of their assets. In accordance with the Indenture, certain cash accounts have been established with the Indenture trustee for the benefit of the trustee and the noteholders, and are restricted in their use. As of January 2, 2022 and January 3, 2021, Wendy’s Funding had restricted cash of $27,188 and $33,635, respectively, which primarily represents cash collections and cash reserves held by the trustee to be used for payments of principal, interest and commitment fees required for the Class A-2 Notes. Refinancing Transactions In June 2021, the Master Issuer completed a refinancing transaction under which the Master Issuer issued the Series 2021-1 Class A-2-I Notes and the Series 2021-1 Class A-2-II Notes. A portion of the net proceeds from the sale of the Series 2021-1 Class A-2 Notes were used to repay in full the Master Issuer’s outstanding Series 2015-1 Class A-2-III Notes and Series 2018-1 Class A-2-I Notes, including the payment of prepayment and transaction costs. As a result of the refinancing, the Company recorded a loss on early extinguishment of debt of $17,917 during 2021, which was comprised of a specified make-whole payment of $9,632 and the write-off of certain unamortized deferred financing costs of $8,285. As part of the June 2021 refinancing transaction, the Master Issuer also issued the 2021-1 Class A-1 Notes. The Series 2021-1 Class A-1 Notes replaced the Company’s $150,000 Series 2019-1 Class A-1 Notes and $100,000 Series 2020-1 Class A-1 Notes, which were canceled on the closing date, and the letters of credit outstanding against the Series 2019-1 Class A-1 Notes were transferred to the Series 2021-1 Class A-1 Notes. In June 2019, the Master Issuer completed a refinancing transaction under which the Master Issuer issued the Series 2019-1 Class A-2-I Notes and the Series 2019-1 Class A-2-II Notes. The Master Issuer’s outstanding Series 2015-1 Class A-2-II Notes were redeemed as part of the transaction. As a result, the Company recorded a loss on early extinguishment of debt of $7,150 during 2019, which was comprised of the write-off of certain unamortized deferred financing costs. Debt Issuance Costs During 2021, 2020 and 2019, the Company incurred debt issuance costs of $20,873, $2,122 and $14,008 in connection with the June 2021 refinancing transaction, the issuance of the 2020-1 Class A-1 Notes and the June 2019 refinancing transaction, respectively. The debt issuance costs are being amortized to “Interest expense, net” through the anticipated repayment dates of the Class A-2 Notes utilizing the effective interest rate method. As of January 2, 2022, the effective interest rates, including the amortization of debt issuance costs, were 4.1%, 4.0%, 4.2%, 2.6% and 2.9% for the Series 2018-1 Class A-2-II Notes, Series 2019-1 Class A-2-I Notes, Series 2019-1 Class A-2-II Notes, Series 2021-1 Class A-2-I Notes and Series 2021 Class A-2-II Notes, respectively. Other Long-Term Debt Wendy’s 7% debentures are unsecured and were reduced to fair value in connection with the Wendy’s Merger based on their outstanding principal of $100,000 and an effective interest rate of 8.6%. The fair value adjustment is being accreted and the related charge included in “Interest expense, net” until the debentures mature. These debentures contain covenants that restrict the incurrence of indebtedness secured by liens and certain finance lease transactions. In December 2019, Wendy’s repurchased $10,000 in principal of its 7% debentures for $10,550, including a premium of $500 and transaction fees of $50. As a result, the Company recognized a loss on early extinguishment of debt of $1,346 during the fourth quarter of 2019. A Canadian subsidiary of Wendy’s has a revolving credit facility of C$6,000, which bears interest at the Bank of Montreal Prime Rate. Borrowings under the facility are guaranteed by Wendy’s. In March 2020, the Company drew down C$5,500 under the revolving credit facility, which the Company fully repaid through repayments of C$3,000 in the fourth quarter of 2020 and C$2,500 in the first quarter of 2021. As of January 2, 2022, the Company had no outstanding borrowings under the Canadian revolving credit facility. Wendy’s U.S. advertising fund has a revolving line of credit of $25,000, which was established to support the advertising fund operations and bears interest at LIBOR plus 2.15%. Borrowings under the line of credit are guaranteed by Wendy’s. During 2020, the Company borrowed and repaid $29,397 under the revolving line of credit. There were no borrowings or repayments under the line of credit during 2021. As of January 2, 2022, the Company had no outstanding borrowings under the revolving line of credit. The increased borrowings in 2020 were taken as precautionary measures to provide enhanced financial flexibility considering the uncertain market conditions arising from the COVID-19 pandemic. Interest Expense Interest expense on the Company’s long-term debt was $98,356, $106,116 and $105,829 during 2021, 2020 and 2019, respectively, which was recorded to “Interest expense, net.” Pledged Assets The following is a summary of the Company’s assets pledged as collateral for certain debt: Year End January 2, Cash and cash equivalents $ 29,201 Restricted cash and other assets (including long-term) 27,193 Accounts and notes receivable, net 41,964 Inventories 5,180 Properties 59,717 Other intangible assets 1,026,736 $ 1,189,991 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Jan. 02, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Valuation techniques under the accounting guidance related to fair value measurements are based on observable and unobservable inputs. Observable inputs reflect readily obtainable data from independent sources, while unobservable inputs reflect our market assumptions. These inputs are classified into the following hierarchy: • Level 1 Inputs - Quoted prices for identical assets or liabilities in active markets. • Level 2 Inputs - Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. • Level 3 Inputs - Pricing inputs are unobservable for the assets or liabilities and include situations where there is little, if any, market activity for the assets or liabilities. The inputs into the determination of fair value require significant management judgment or estimation. Financial Instruments The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments: Year End January 2, 2022 January 3, 2021 Carrying Fair Carrying Fair Fair Value Financial assets Cash equivalents $ — $ — $ 75,067 $ 75,067 Level 1 Other investments in equity securities (a) 10,000 10,000 — — Level 2 Financial liabilities Series 2021-1 Class A-2-I Notes (b) 447,750 439,283 — — Level 2 Series 2021-1 Class A-2-II Notes (b) 646,750 642,352 — — Level 2 Series 2019-1 Class A-2-I Notes (b) 368,000 381,579 386,000 409,778 Level 2 Series 2019-1 Class A-2-II Notes (b) 414,000 439,792 434,250 469,555 Level 2 Series 2018-1 Class A-2-I Notes (b) — — 436,500 450,381 Level 2 Series 2018-1 Class A-2-II Notes (b) 456,000 473,693 460,750 491,021 Level 2 Series 2015-1 Class A-2-III Notes (b) — — 473,750 481,851 Level 2 Canadian revolving credit facility — — 1,962 1,962 Level 2 7% debentures, due in 2025 (b) 85,175 101,142 83,998 98,775 Level 2 _______________ (a) The fair value of our other investments in equity securities is based on our review of information provided by the investment manager, which is based on observable price changes in orderly transactions for an identical or similar investment of the same issuer. (b) The fair values were based on quoted market prices in markets that are not considered active markets. The carrying amounts of cash, accounts payable and accrued expenses approximate fair value due to the short-term nature of those items. The carrying amounts of accounts and notes receivable, net (both current and non-current) approximate fair value due to the effect of the related allowance for doubtful accounts. Our cash equivalents are the only financial assets measured and recorded at fair value on a recurring basis. Non-Recurring Fair Value Measurements Assets and liabilities remeasured to fair value on a non-recurring basis resulted in impairment that we have recorded to “Impairment of long-lived assets” in our consolidated statements of operations. Total impairment losses may reflect the impact of remeasuring long-lived assets held and used (including land, buildings, leasehold improvements, favorable lease assets and ROU assets) to fair value as a result of (1) declines in operating performance at Company-operated restaurants and (2) the Company’s decision to lease and/or sublease the land and/or buildings to franchisees in connection with the sale or anticipated sale of restaurants, including any subsequent lease modifications. The fair values of long-lived assets held and used presented in the tables below represent the remaining carrying value and were estimated based on either discounted cash flows of future anticipated lease and sublease income or discounted cash flows of future anticipated Company-operated restaurant performance. Total impairment losses may also include the impact of remeasuring long-lived assets held for sale. The fair values of long-lived assets held for sale presented in the tables below represent the remaining carrying value and were estimated based on current market values. See Note 17 for further information on impairment of our long-lived assets. Fair Value Measurements 2021 Total Losses January 2, Level 1 Level 2 Level 3 Held and used $ 1,618 $ — $ — $ 1,618 $ 2,051 Held for sale 371 — — 371 200 Total $ 1,989 $ — $ — $ 1,989 $ 2,251 Fair Value Measurements 2020 Total Losses January 3, Level 1 Level 2 Level 3 Held and used $ 2,653 $ — $ — $ 2,653 $ 7,586 Held for sale 855 — — 855 451 Total $ 3,508 $ — $ — $ 3,508 $ 8,037 |
Income Taxes
Income Taxes | 12 Months Ended |
Jan. 02, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income before income taxes is set forth below: Year Ended 2021 2020 2019 Domestic $ 228,756 $ 149,046 $ 160,474 Foreign (a) 11,822 3,749 11,007 $ 240,578 $ 152,795 $ 171,481 _______________ (a) Excludes foreign income of domestic subsidiaries. The (provision for) benefit from income taxes is set forth below: Year Ended 2021 2020 2019 Current: U.S. federal $ (38,416) $ (16,176) $ (18,421) State (7,039) (3,723) (6,093) Foreign (8,512) (4,798) (9,190) Current tax provision (53,967) (24,697) (33,704) Deferred: U.S. federal (52) (6,707) 1,585 State 15,993 (3,185) (2,449) Foreign (2,160) (374) 27 Deferred tax (provision) benefit 13,781 (10,266) (837) Income tax provision $ (40,186) $ (34,963) $ (34,541) Deferred tax assets (liabilities) are set forth below: Year End January 2, 2022 January 3, 2021 Deferred tax assets: Operating and finance lease liabilities $ 368,932 $ 365,005 Net operating loss and credit carryforwards 60,620 62,210 Deferred revenue 23,636 24,303 Unfavorable leases 19,060 23,511 Accrued compensation and related benefits 18,487 16,443 Accrued expenses and reserves 6,763 7,673 Other 7,586 5,869 Valuation allowances (38,277) (49,968) Total deferred tax assets 466,807 455,046 Deferred tax liabilities: Operating and finance lease assets (341,681) (332,515) Intangible assets (290,088) (301,969) Fixed assets (63,936) (63,826) Other (38,812) (37,491) Total deferred tax liabilities (734,517) (735,801) $ (267,710) $ (280,755) The amounts and expiration dates of net operating loss and tax credit carryforwards are as follows: Amount Expiration Tax credit carryforwards: U.S. federal foreign tax credits $ 15,309 2022-2032 State tax credits 593 2022-2023 Foreign tax credits of non-U.S. subsidiaries 4,159 Indefinite Total $ 20,061 Net operating loss carryforwards (pre-tax): State and local net operating loss carryforwards $ 1,131,604 2022-Indefinite Foreign net operating loss carryforwards 6,962 Indefinite Total $ 1,138,566 The Company’s valuation allowances of $38,277 and $49,968 as of January 2, 2022 and January 3, 2021, respectively, relate primarily to foreign and state tax credit and net operating loss carryforwards. Valuation allowances decreased $11,691 during 2021 and increased $4,785 and $3,008 during 2020 and 2019, respectively. The decrease in 2021 resulted primarily from a 2021 change in state tax law, which resulted in a one-time reduction in previously recorded valuation allowances against our deferred state tax assets of $12,606. Additionally, the relative presence of Company-operated restaurants in various states impacts expected future state taxable income available to utilize state net operating loss carryforwards. The current portion of refundable income taxes was $11,901 and $5,399 as of January 2, 2022 and January 3, 2021, respectively, and is included in “Accounts and notes receivable, net.” There were no long-term refundable income taxes as of January 2, 2022 and January 3, 2021. The reconciliation of income tax computed at the U.S. federal statutory rate of 21% to reported income tax is set forth below: Year Ended 2021 2020 2019 Income tax provision at the U.S. federal statutory rate $ (50,521) $ (32,087) $ (36,011) State income tax provision, net of U.S. federal income tax effect (6,256) (4,664) (6,470) Prior years’ tax matters (a) 1,820 1,761 6,135 Excess federal tax benefits from share-based compensation 7,160 5,338 5,841 Foreign and U.S. tax effects of foreign operations (5) (397) 250 Valuation allowances (b) 11,807 (4,593) (2,833) Non-deductible goodwill (c) (947) — — Tax credits 1,028 1,901 879 Non-deductible executive compensation (3,810) (1,973) (1,925) Unrepatriated earnings (282) (283) (402) Non-deductible expenses and other (180) 34 (5) $ (40,186) $ (34,963) $ (34,541) _______________ (a) 2019 primarily relates to a reduction in unrecognized tax benefits due to a lapse of statute of limitations. (b) 2021 primarily relates to the $12,606 benefit resulting from the state tax law change described above. The effect of the tax law change also included $840 of additional deferred tax expense included in the State income tax provision line item, for a total of $11,766. (c) Related to the sale of the New York Company-operated restaurants (including Manhattan). See Note 4 for further information. The Company participates in the Internal Revenue Service (the “IRS”) Compliance Assurance Process (“CAP”). As part of CAP, tax years are examined on a contemporaneous basis so that all or most issues are resolved prior to the filing of the tax return. As such, our tax returns for fiscal years 2009 through 2019 have been settled. The statute of limitations for the Company’s state tax returns vary, but generally the Company’s state income tax returns from its 2018 fiscal year and forward remain subject to examination. We believe that adequate provisions have been made for any liabilities, including interest and penalties that may result from the completion of these examinations. Unrecognized Tax Benefits As of January 2, 2022, the Company had unrecognized tax benefits of $18,849, which, if resolved favorably would reduce income tax expense by $14,890. A reconciliation of the beginning and ending amount of unrecognized tax benefits follows: Year Ended 2021 2020 2019 Beginning balance $ 20,973 $ 22,323 $ 27,632 Additions: Tax positions of current year 157 322 1,356 Tax positions of prior years — — — Reductions: Tax positions of prior years (2,015) (1,183) (227) Settlements (46) (119) — Lapse of statute of limitations (220) (370) (6,438) Ending balance $ 18,849 $ 20,973 $ 22,323 The reductions in unrecognized tax benefits in 2021 and 2020 were primarily related to decreases as a result of settlements with various taxing jurisdictions. The additions in unrecognized tax benefits in 2019 was primarily related to the uncertainty of the income tax consequences of a cash settlement related to a previously held investment. During 2022, we believe it is reasonably possible the Company will reduce unrecognized tax benefits by up to $98 due primarily to the lapse of statutes of limitations and expected settlements. During 2021, 2020 and 2019, the Company recognized $138, $159 and $(489) of expense (income) for interest and $37, $81 and $81 of income for penalties, respectively, related to uncertain tax positions. The Company has $975 and $873 accrued for interest and $0 and $37 accrued for penalties as of January 2, 2022 and January 3, 2021, respectively. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Jan. 02, 2022 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Dividends During 2021, 2020 and 2019, the Company paid dividends per share of $0.43, $0.29 and $0.42, respectively. Treasury Stock There were 470,424 shares of common stock issued at the beginning and end of 2021, 2020 and 2019. Treasury stock activity for 2021, 2020 and 2019 was as follows: Year Ended 2021 2020 2019 Number of shares at beginning of year 246,156 245,535 239,191 Repurchases of common stock 11,487 3,512 10,158 Common shares issued: Stock options, net (2,657) (2,358) (2,912) Restricted stock, net (337) (465) (834) Director fees (17) (15) (14) Other (57) (53) (54) Number of shares at end of year 254,575 246,156 245,535 Repurchases of Common Stock In February 2020, our Board of Directors authorized a repurchase program for up to $100,000 of our common stock through February 28, 2021, when and if market conditions warranted and to the extent legally permissible. As previously announced, beginning in March 2020, the Company temporarily suspended all share repurchase activity under the February 2020 authorization in connection with the Company’s response to the COVID-19 pandemic. In July 2020, the Company’s Board of Directors approved an extension of the February 2020 authorization by one year, through February 28, 2022. The Company resumed share repurchases in August 2020. In addition, in May 2021, August 2021, and November 2021, the Board of Directors approved increases of $50,000, $70,000 and $80,000, respectively, to the February 2020 authorization, resulting in an aggregate authorization of $300,000 that continued to expire on February 28, 2022. In November 2021, the Company entered into an accelerated share repurchase agreement (the “2021 ASR Agreement”) with a third-party financial institution to repurchase common stock as part of the Company’s existing share repurchase program. Under the 2021 ASR Agreement, the Company paid the financial institution an initial purchase price of $125,000 in cash and received an initial delivery of 4,910 shares of common stock, representing an estimated 85% of the total shares expected to be delivered under the 2021 ASR Agreement. In February 2022, the Company completed the 2021 ASR Agreement and received an additional 715 shares of common stock. The total number of shares of common stock ultimately purchased by the Company under the 2021 ASR Agreement was based on the average of the daily volume-weighted average prices of the common stock during the term of the 2021 ASR Agreement, less an agreed upon discount. In total, 5,625 shares were delivered under the 2021 ASR Agreement at an average purchase price of $22.22 per share. In addition to the shares repurchased in connection with the 2021 ASR Agreement, during 2021, the Company repurchased 6,577 shares with an aggregate purchase price of $142,715, excluding commissions of $93, under the February 2020 repurchase authorization. After taking into consideration these repurchases, with the completion of the 2021 ASR Agreement in February 2022 described above, the Company completed the February 2020 authorization. In February 2022, our Board of Directors authorized the repurchase of up to $100,000 of our common stock through February 28, 2023, when and if market conditions warrant and to the extent legally permissible. During 2020, the Company repurchased 1,572 shares under the February 2020 repurchase authorization with an aggregate purchase price of $32,285, of which $723 was accrued at January 3, 2021, and excluding commissions of $22. In February 2019, our Board of Directors authorized a repurchase program for up to $225,000 of our common stock through March 1, 2020, when and if market conditions warranted and to the extent legally permissible. In November 2019, the Company entered into an accelerated share repurchase agreement (the “2019 ASR Agreement”) with a third-party financial institution to repurchase common stock as part of the Company’s existing share repurchase program. Under the 2019 ASR Agreement, the Company paid the financial institution an initial purchase price of $100,000 in cash and received an initial delivery of 4,051 shares of common stock, representing an estimated 85% of the total shares expected to be delivered under the 2019 ASR Agreement. In February 2020, the Company completed the 2019 ASR Agreement and received an additional 628 shares of common stock. The total number of shares of common stock ultimately purchased by the Company under the 2019 ASR Agreement was based on the average of the daily volume-weighted average prices of the common stock during the term of the 2019 ASR Agreement, less an agreed upon discount. In total, 4,679 shares were delivered under the 2019 ASR Agreement at an average purchase price of $21.37 per share. In addition to the shares repurchased in connection with the 2019 ASR Agreement, during 2020, the Company repurchased 1,312 shares with an aggregate purchase price of $28,770, excluding commissions of $18, under the February 2019 authorization. After taking into consideration these repurchases, with the completion of the 2019 ASR Agreement in February 2020, the Company completed its February 2019 authorization. In addition to the shares repurchased in connection with the 2019 ASR Agreement, during 2019, the Company repurchased 6,107 shares with an aggregate purchase price of $117,685, of which $1,801 was accrued at December 29, 2019, and excluding commissions of $86, under the February 2019 authorization and the Company’s November 2018 authorization for up to $220,000 of our common stock through December 27, 2019. Preferred Stock There were 100,000 shares authorized and no shares issued of preferred stock throughout 2021, 2020 and 2019. Accumulated Other Comprehensive Loss The following table provides a rollforward of accumulated other comprehensive loss, which is entirely comprised of foreign currency translation: Year Ended 2021 2020 2019 Balance at beginning of period $ (49,641) $ (53,828) $ (61,673) Foreign currency translation 1,441 4,187 7,845 Balance at end of period $ (48,200) $ (49,641) $ (53,828) |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Jan. 02, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Compensation | Share-Based CompensationThe Company has the ability to grant stock options, stock appreciation rights, restricted stock, restricted stock units, other stock-based awards and performance compensation awards to current or prospective employees, directors, officers, consultants or advisors. During 2020, the Company’s Board of Directors and its stockholders approved the adoption of the 2020 Omnibus Award Plan (the “2020 Plan”) for the issuance of equity instruments as described above. The Company’s previous 2010 Omnibus Award Plan (as amended, the “2010 Plan”) expired in accordance with its terms in 2020. All equity grants in 2021 were issued from the 2020 Plan. Equity grants in 2020 were issued from both the 2020 Plan and the 2010 Plan. All equity grants during 2019 were issued from the 2010 Plan. The 2020 Plan is currently the only equity plan from which future equity awards may be granted, but outstanding awards granted under the 2010 Plan will continue to be governed by the terms of the 2010 Plan. As of January 2, 2022, there were approximately 22,425 shares of common stock available for future grants under the 2020 Plan. During the periods presented in the consolidated financial statements, the Company settled all exercises of stock options and vesting of restricted shares, including performance shares, with treasury shares. Stock Options The Company’s current outstanding stock options have maximum contractual terms of 10 years and vest ratably over three years or cliff vest after three years. The exercise price of options granted is equal to the market price of the Company’s common stock on the date of grant. The fair value of stock options on the date of grant is calculated using the Black-Scholes Model. The aggregate intrinsic value of an option is the amount by which the fair value of the underlying stock exceeds its exercise price. The following table summarizes stock option activity during 2021: Number of Options Weighted Weighted Aggregate Outstanding at January 3, 2021 11,242 $ 16.06 Granted 1,435 23.70 Exercised (2,746) 11.38 Forfeited and/or expired (73) 21.27 Outstanding at January 2, 2022 9,858 $ 18.44 6.94 $ 55,337 Vested or expected to vest at January 2, 2022 9,727 $ 18.38 6.91 $ 53,197 Exercisable at January 2, 2022 6,514 $ 16.43 6.00 $ 48,372 The total intrinsic value of options exercised during 2021, 2020 and 2019 was $39,522, $28,111 and $26,947, respectively. The weighted average grant date fair value of stock options granted during 2021, 2020 and 2019 was $6.33, $6.02 and $3.40, respectively. The weighted average grant date fair value of stock options was determined using the following assumptions: 2021 2020 2019 Risk-free interest rate 0.70 % 0.22 % 1.57 % Expected option life in years 4.50 4.50 4.50 Expected volatility 38.00 % 38.02 % 23.55 % Expected dividend yield 2.03 % 1.72 % 2.03 % The risk-free interest rate represents the U.S. Treasury zero-coupon bond yield correlating to the expected life of the stock options granted. The expected option life represents the period of time that the stock options granted are expected to be outstanding based on historical exercise trends for similar grants. The expected volatility is based on the historical market price volatility of the Company over a period equivalent to the expected option life. The expected dividend yield represents the Company’s annualized average yield for regular quarterly dividends declared prior to the respective stock option grant dates. The Black-Scholes Model has limitations on its effectiveness including that it was developed for use in estimating the fair value of traded options which have no vesting restrictions and are fully transferable and that the model requires the use of highly subjective assumptions, such as expected stock price volatility. Employee stock option awards have characteristics significantly different from those of traded options and changes in the subjective input assumptions can materially affect the fair value estimates. Restricted Shares The Company grants RSAs and RSUs, which primarily cliff vest after 1 to 3 years. For the purposes of our disclosures, the term “Restricted Shares” applies to RSAs and RSUs collectively unless otherwise noted. The fair value of Restricted Shares granted is determined using the fair market value of the Company’s common stock on the date of grant, as set forth in the applicable plan document. The following table summarizes activity of Restricted Shares during 2021: Number of Restricted Shares Weighted Non-vested at January 3, 2021 1,089 $ 19.01 Granted 365 23.27 Vested (304) 18.69 Forfeited (56) 21.08 Non-vested at January 2, 2022 1,094 $ 20.09 The total fair value of Restricted Shares that vested in 2021, 2020 and 2019 was $7,048, $8,634 and $9,996, respectively. Performance Shares The Company grants performance-based awards to certain officers and key employees. The vesting of these awards is contingent upon meeting one or more defined operational or financial goals (a performance condition) or common stock share prices (a market condition). The quantity of shares awarded ranges from 0% to 200% of “Target,” as defined in the award agreement as the midpoint number of shares, based on the level of achievement of the performance and market conditions. The fair values of the performance condition awards granted in 2021, 2020 and 2019 were determined using the fair market value of the Company’s common stock on the date of grant, as set forth in the applicable plan document. Share-based compensation expense recorded for performance condition awards is reevaluated at each reporting period based on the probability of the achievement of the goal. The fair value of market condition awards granted in 2021, 2020 and 2019 were estimated using the Monte Carlo simulation model. The Monte Carlo simulation model utilizes multiple input variables to estimate the probability that the market conditions will be achieved and is applied to the trading price of our common stock on the date of grant. The input variables are noted in the table below: 2021 2020 2019 Risk-free interest rate 0.20 % 1.38 % 2.51 % Expected life in years 3.00 3.00 3.00 Expected volatility 49.47 % 23.26 % 23.19 % Expected dividend yield (a) 0.00 % 0.00 % 0.00 % _______________ (a) The Monte Carlo method assumes a reinvestment of dividends. Share-based compensation expense is recorded ratably for market condition awards during the requisite service period and is not reversed, except for forfeitures, at the vesting date regardless of whether the market condition is met. The following table summarizes activity of performance shares at Target during 2021: Performance Condition Awards Market Condition Awards Shares Weighted Shares Weighted Non-vested at January 3, 2021 429 $ 19.06 346 $ 23.65 Granted 209 20.21 187 22.96 Dividend equivalent units issued (a) 10 20.48 8 24.53 Vested (b) (88) 15.65 (119) 15.65 Forfeited (55) 15.65 — — Non-vested at January 2, 2022 505 $ 20.48 422 $ 24.52 _______________ (a) Dividend equivalent units are issued in lieu of cash dividends for non-vested performance shares. There is no weighted average fair value associated with dividend equivalent units. (b) Market condition awards exclude the vesting of an additional 52 shares, which resulted from the performance of the awards exceeding Target. The total fair value of performance condition awards that vested in 2021, 2020 and 2019 was $1,784, $3,447 and $7,720, respectively. The total fair value of market condition awards that vested in 2021, 2020 and 2019 was $3,498, $4,910 and $7,135, respectively. Modifications of Share-Based Awards During 2020 and 2019, the Company modified the terms of awards granted to seven and ten employees, respectively, in connection with its Operations and Field Realignment Plan, IT Realignment Plan and G&A Realignment Plan discussed in Note 5. These modifications resulted in the accelerated vesting of certain stock options in connection with the termination of such employees. As a result, during 2020 and 2019, the Company recognized an increase in share-based compensation of $621 and $1,011, respectively, which was included in “Reorganization and realignment costs.” The Company did not modify the terms of any awards during 2021. Share-Based Compensation Total share-based compensation and the related income tax benefit recognized in the Company’s consolidated statements of operations were as follows: Year Ended 2021 2020 2019 Stock options $ 9,256 $ 8,499 $ 7,685 Restricted shares (a) 6,677 6,507 5,762 Performance shares: Performance condition awards 2,861 782 2,195 Market condition awards 3,225 2,521 2,023 Modifications, net — 621 1,011 Share-based compensation 22,019 18,930 18,676 Less: Income tax benefit (2,790) (2,958) (2,990) Share-based compensation, net of income tax benefit $ 19,229 $ 15,972 $ 15,686 _______________ (a) 2021, 2020 and 2019 include $19, $213 and $396, respectively, related to retention awards in connection with the Company’s G&A Realignment Plan, which is included in “Reorganization and realignment costs.” See Note 5 for further information. As of January 2, 2022, there was $29,337 of total unrecognized share-based compensation, which will be recognized over a weighted average amortization period of 2.06 years. |
Impairment of Long-Lived Assets
Impairment of Long-Lived Assets | 12 Months Ended |
Jan. 02, 2022 | |
Asset Impairment Charges [Abstract] | |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company records impairment charges as a result of (1) the deterioration in operating performance of certain Company-operated restaurants, (2) the Company’s decision to lease and/or sublease properties to franchisees in connection with the sale or anticipated sale of Company-operated restaurants, including any subsequent lease modifications, and (3) closing Company-operated restaurants and classifying such surplus properties as held for sale. Impairment charges during 2020 were primarily due to the deterioration in operating performance of certain Company-operated restaurants as a result of the COVID-19 pandemic. The following is a summary of impairment losses recorded, which represent the excess of the carrying amount over the fair value of the affected assets and are included in “Impairment of long-lived assets:” Year Ended 2021 2020 2019 Company-operated restaurants $ 1,862 $ 7,586 $ 294 Restaurants leased or subleased to franchisees 189 — 5,308 Surplus properties 200 451 1,397 $ 2,251 $ 8,037 $ 6,999 |
Investment Income, Net (Notes)
Investment Income, Net (Notes) | 12 Months Ended |
Jan. 02, 2022 | |
Investment Income, Net [Abstract] | |
Investment Income, Net | Investment Income (Loss), Net Year Ended 2021 2020 2019 Gain on sale of investments, net (a) $ 63 $ — $ 24,496 Impairment loss on other investments in equity securities — (471) — Other, net (24) 246 1,102 $ 39 $ (225) $ 25,598 _______________ (a) In October 2019, the Company received a $25,000 cash settlement related to a previously held investment. As a result, the Company recorded $24,366 to “Investment income (loss), net” and $634 to “General and administrative” for the reimbursement of related costs. |
Retirement Benefit Plans
Retirement Benefit Plans | 12 Months Ended |
Jan. 02, 2022 | |
Retirement Benefits [Abstract] | |
Pension and Other Postretirement Benefits Disclosure | Retirement Benefit Plans 401(k) Plan The Company has a 401(k) defined contribution plan (the “401(k) Plan”) for employees who meet certain minimum requirements and elect to participate. The 401(k) Plan permits employees to contribute up to 75% of their compensation, subject to certain limitations, and provides for matching employee contributions up to 4% of compensation and for discretionary profit sharing contributions. In connection with the matching and profit sharing contributions, the Company recognized compensation expense of $4,583, $5,175 and $4,631 in 2021, 2020 and 2019, respectively. Wendy’s Executive Plans In conjunction with the Wendy’s Merger, amounts due under supplemental executive retirement plans (collectively, the “SERP”) were funded into a restricted account. As of January 1, 2011, participation in the SERP was frozen to new entrants and future contributions, and existing participants’ balances only earn annual interest. The corresponding SERP liabilities are included in “Accrued expenses and other current liabilities” and “Other liabilities” and, in the aggregate, were $294 and $432 as of January 2, 2022 and January 3, 2021, respectively. The Company has a non-qualified, unfunded deferred compensation plan for management and highly compensated employees, whereby participants may defer all or a portion of their base compensation and certain incentive awards on a pre-tax basis. The Company credits the amounts deferred with earnings based on the investment options selected by the participants. The Company may also make discretionary contributions to the plan. The total of participant deferrals was $1,455 and $1,108 at January 2, 2022 and January 3, 2021, respectively, which are included in “Other liabilities.” |
Leases
Leases | 12 Months Ended |
Jan. 02, 2022 | |
Leases [Abstract] | |
Leases, Company as Lessee | Leases Nature of Leases The Company operates restaurants that are located on sites owned by us and sites leased by us from third parties. In addition, the Company owns sites and leases sites from third parties, which it leases and/or subleases to franchisees. At January 2, 2022, Wendy’s and its franchisees operated 6,949 Wendy’s restaurants. Of the 408 Company-operated Wendy’s restaurants, Wendy’s owned the land and building for 159 restaurants, owned the building and held long-term land leases for 141 restaurants and held leases covering the land and building for 108 restaurants. Wendy’s also owned 485 and leased 1,235 properties that were either leased or subleased principally to franchisees. The Company also leases restaurant, office and transportation equipment. Company as Lessee The components of lease cost for 2021, 2020 and 2019 are as follows: Year Ended 2021 2020 2019 Finance lease cost: Amortization of finance lease assets $ 13,992 $ 13,395 $ 11,241 Interest on finance lease liabilities 41,419 40,682 37,012 55,411 54,077 48,253 Operating lease cost 89,283 91,475 90,537 Variable lease cost (a) 63,853 59,076 58,978 Short-term lease cost 5,102 4,641 4,717 Total operating lease cost (b) 158,238 155,192 154,232 Total lease cost $ 213,649 $ 209,269 $ 202,485 _______________ (a) Includes expenses for executory costs of $39,646, $38,652, and $37,758 for 2021, 2020 and 2019, respectively, for which the Company is reimbursed by sublessees. (b) Includes $132,158, $125,553 and $123,899 for 2021, 2020 and 2019, respectively, recorded to “Franchise rental expense” for leased properties that are subsequently leased to franchisees. Also includes $23,558, $26,866 and $27,419 for 2021, 2020 and 2019, respectively, recorded to “Cost of sales” for leases for Company-operated restaurants. The following table includes supplemental cash flow and non-cash information related to leases: Year Ended 2021 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from finance leases $ 42,277 $ 39,349 $ 39,887 Operating cash flows from operating leases 91,930 85,689 91,824 Financing cash flows from finance leases 13,640 8,383 6,835 Right-of-use assets obtained in exchange for lease obligations: Finance lease liabilities 82,032 34,918 50,061 Operating lease liabilities 58,770 18,327 15,411 The following table includes supplemental information related to leases: Year End January 2, 2022 January 3, Weighted-average remaining lease term (years): Finance leases 15.8 16.2 Operating leases 14.1 14.6 Weighted average discount rate: Finance leases 8.91 % 9.54 % Operating leases 4.94 % 5.06 % Supplemental balance sheet information: Finance lease assets, gross $ 307,965 $ 261,308 Accumulated amortization (63,686) (55,155) Finance lease assets 244,279 206,153 Operating lease assets 812,620 821,480 The following table illustrates the Company’s future minimum rental payments for non-cancelable leases as of January 2, 2022: Finance Operating Fiscal Year Company-Operated Franchise Company-Operated Franchise 2022 $ 6,361 $ 51,720 $ 20,521 $ 69,692 2023 6,317 52,957 20,989 69,158 2024 6,410 53,383 20,956 69,133 2025 6,610 53,876 20,745 68,910 2026 6,754 55,117 21,198 68,093 Thereafter 84,693 624,335 192,250 630,404 Total minimum payments $ 117,145 $ 891,388 $ 296,659 $ 975,390 Less interest (41,554) (391,879) (82,860) (288,546) Present value of minimum lease payments (a) (b) $ 75,591 $ 499,509 $ 213,799 $ 686,844 _______________ (a) The present value of minimum finance lease payments of $15,513 and $559,587 are included in “Current portion of finance lease liabilities” and “Long-term finance lease liabilities,” respectively. (b) The present value of minimum operating lease payments of $47,315 and $853,328 are included in “Current portion of operating lease liabilities” and “Long-term operating lease liabilities,” respectively. |
Leases, Company as Lessor | Company as Lessor The components of lease income for 2021, 2020 and 2019 are as follows: Year Ended 2021 2020 2019 Sales-type and direct-financing leases: Selling profit $ 4,244 $ 1,995 $ 2,285 Interest income (a) 30,648 29,067 26,333 Operating lease income 173,442 174,452 176,629 Variable lease income 63,213 58,196 56,436 Franchise rental income (b) $ 236,655 $ 232,648 $ 233,065 _______________ (a) Included in “Interest expense, net.” (b) Includes sublease income of $174,327, $169,921 and $171,126 recognized during 2021, 2020 and 2019, respectively. Sublease income includes lessees’ variable payments to the Company for executory costs of $39,650, $38,636 and $37,739 for 2021, 2020 and 2019, respectively. The following table illustrates the Company’s future minimum rental receipts for non-cancelable leases and subleases as of January 2, 2022: Sales-Type and Operating Fiscal Year Subleases Owned Properties Subleases Owned Properties 2022 $ 33,883 $ 2,543 $ 110,714 $ 53,076 2023 34,933 2,589 111,330 53,384 2024 36,929 2,599 111,591 54,490 2025 35,803 2,717 111,102 55,086 2026 36,950 2,887 110,537 56,845 Thereafter 438,518 31,876 1,020,240 647,591 Total future minimum receipts 617,016 45,211 $ 1,575,514 $ 920,472 Unearned interest income (331,403) (24,851) Net investment in sales-type and direct financing leases (a) $ 285,613 $ 20,360 _______________ (a) The present value of minimum sales-type and direct financing rental receipts of $6,266 and $299,707 are included in “Accounts and notes receivable, net” and “Net investment in sales-type and direct financing leases,” respectively. The present value of minimum sales-type and direct financing rental receipts includes a net investment in unguaranteed residual assets of $549. Properties owned by the Company and leased to franchisees and other third parties under operating leases include: Year End January 2, 2022 January 3, 2021 Land $ 258,513 $ 279,956 Buildings and improvements 288,782 309,605 Restaurant equipment 1,701 1,701 548,996 591,262 Accumulated depreciation and amortization (173,243) (170,722) $ 375,753 $ 420,540 |
Guarantees and Other Commitment
Guarantees and Other Commitments and Contingencies | 12 Months Ended |
Jan. 02, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Guarantees and Other Commitments and Contingencies | Guarantees and Other Commitments and Contingencies Guarantees and Contingent Liabilities Franchisee Image Activation Incentive Programs In order to promote new restaurant development, Wendy’s has an incentive program for franchisees that provides for technical assistance fee waivers and reductions in royalty and national advertising payments for up to the first two years of operation for qualifying new restaurants opened prior to December 31, 2022. In addition, Wendy’s has a restaurant development incentive program that provides for incremental reductions in royalty and national advertising payments for up to the first two years of operation for qualifying new restaurants for existing franchisees that sign up for the program under a new development agreement, or through an extension of their existing development agreement, and commit to incremental development of new Wendy’s restaurants. Under any extended development agreements, franchisees are also eligible for technical assistance fee waivers for restaurants opened one year in advance of their original development schedule so long as the restaurants are opened prior to December 31, 2022. Wendy’s also provides franchisees with the option of an early 20-year or 25-year renewal of their franchise agreement upon completion of reimaging utilizing certain approved Image Activation reimage designs. Lease Guarantees Wendy’s has guaranteed the performance of certain leases and other obligations, primarily from former Company-operated restaurant locations now operated by franchisees, amounting to $90,649 as of January 2, 2022. These leases extend through 2045. We have had no judgments against us as guarantor of these leases as of January 2, 2022. In the event of default by a franchise owner where Wendy’s is called upon to perform under its guarantee, Wendy’s has the ability to pursue repayment from the franchise owner. The liability recorded for our probable exposure associated with these lease guarantees was not material as of January 2, 2022. Insurance Wendy’s is self-insured for most workers’ compensation losses and purchases insurance for general liability and automotive liability losses, all subject to a $500 per occurrence retention or deductible limit. Wendy’s determines its liability for claims incurred but not reported for the insurance liabilities on an actuarial basis. As of January 2, 2022, the Company had $18,590 recorded for these insurance liabilities. Wendy’s is self-insured for health care claims for eligible participating employees subject to certain deductibles and limitations and determines its liability for health care claims incurred but not reported based on historical claims runoff data. As of January 2, 2022, the Company had $2,966 recorded for these health care insurance liabilities. Letters of Credit As of January 2, 2022, the Company had outstanding letters of credit with various parties totaling $22,251. Substantially all of the outstanding letters of credit include amounts outstanding against the 2021-1 Class A-1 Notes. See Note 12 for further information. We do not expect any material loss to result from these letters of credit. Purchase and Capital Commitments Beverage Agreement The Company has an agreement with a beverage vendor, which provides fountain beverage products and certain marketing support funding to the Company and its franchisees. This agreement requires minimum purchases of certain fountain beverages (“Fountain Beverages”) by the Company and its franchisees at agreed upon prices until the total contractual gallon volume usage is reached. This agreement also provides for an annual advance to be paid to the Company based on the vendor’s expectation of the Company’s annual Fountain Beverages usage, which is amortized over actual usage during the year. In January 2019, the Company amended its contract with the beverage vendor, which now expires at the later of reaching a minimum usage requirement or December 31, 2025. Beverage purchases made by the Company under this agreement during 2021, 2020 and 2019 were $9,709, $10,986 and $11,440, respectively. The Company estimates future annual purchases to be approximately $10,700 in 2022, $10,800 in 2023, $11,100 in 2024 and $11,400 in 2025 based on current pricing and the expected ratio of usage at Company-operated restaurants to franchised restaurants. As of January 2, 2022, $4,325 is due to the beverage vendor and is included in “Accounts payable,” principally for annual estimated payments that exceeded usage under this agreement. IT Services Agreement In December 2019, the Company entered into an agreement to partner with a third-party global IT consultant on the Company’s new IT organization structure to leverage the consultant’s global capabilities, which the Company believes will enable a more seamless integration between its digital and corporate IT assets. Costs incurred by the Company under this agreement were $20,053, $16,961 and $1,386 during 2021, 2020 and 2019, respectively. The Company’s unconditional purchase obligations under the agreement are approximately $17,100 in 2022, $14,700 in 2023, $13,800 in 2024 and $7,100 in 2025. As of January 2, 2022, $1,899 is due to the consultant and is included in “Accrued expenses and other current liabilities.” Marketing Agreement The Company has an agreement with two national broadcasters that grants the Company certain marketing and media rights. Costs incurred by the Company under this agreement were approximately $15,000 and $11,000 in 2021 and 2019, respectively, which are included in “Advertising funds expense.” No costs were incurred under this agreement in 2020. The Company’s unconditional purchase obligations under the agreement are approximately $12,900 in 2022, $13,400 in 2023 and $12,700 in 2024. |
Transactions with Related Parti
Transactions with Related Parties | 12 Months Ended |
Jan. 02, 2022 | |
Related Party Transactions [Abstract] | |
Transactions with Related Parties | Transactions with Related Parties The following is a summary of transactions between the Company and its related parties: Year Ended 2021 2020 2019 Transactions with QSCC: Wendy’s Co-op (a) $ 279 $ — $ 504 Rental receipts (b) 217 217 217 TimWen lease and management fee payments (c) $ 18,687 $ 16,130 $ 16,660 Yellow Cab royalty, advertising fund, lease and other income (d) $ 9,869 $ 1,090 $ — _______________ Transactions with QSCC (a) Wendy’s has a purchasing co-op relationship structure (the “Wendy’s Co-op”) with its franchisees that establishes Quality Supply Chain Co-op, Inc. (“QSCC”). QSCC manages, for the Wendy’s system in the U.S. and Canada, contracts for the purchase and distribution of food, proprietary paper, operating supplies and equipment under national agreements with pricing based upon total system volume. QSCC’s supply chain management facilitates continuity of supply and provides consolidated purchasing efficiencies while monitoring and seeking to minimize possible obsolete inventory throughout the Wendy’s supply chain in the U.S. and Canada. Wendy’s and its franchisees pay sourcing fees to third-party vendors on certain products sourced by QSCC. Such sourcing fees are remitted by these vendors to QSCC and are the primary means of funding QSCC’s operations. Should QSCC’s sourcing fees exceed its expected needs, QSCC’s board of directors may return some or all of the excess to its members in the form of a patronage dividend. Wendy’s recorded its share of patronage dividends of $279 and $504 in 2021 and 2019, respectively, which are included as a reduction of “Cost of sales.” There were no patronage dividends recorded during 2020. (b) Pursuant to a lease agreement, Wendy’s leased 14,493 square feet of office space to QSCC for an annual base rental of $217. The lease was amended in June 2021 to increase both the leased square footage to 18,774 and the annual base rental to $250, subject to annual increases, and to extend the lease term through January 31, 2027. The Company received $217 of lease payments from QSCC during each of 2021, 2020 and 2019, which has been recorded to “Franchise rental income.” TimWen Lease and Management Fee Payments (c) A wholly-owned subsidiary of Wendy’s leases restaurant facilities from TimWen, which are then subleased to franchisees for the operation of Wendy’s/Tim Hortons combo units in Canada. Wendy’s paid TimWen $18,906, $16,339 and $16,867 under these lease agreements during 2021, 2020 and 2019, respectively. In addition, TimWen paid Wendy’s a management fee under the TimWen joint venture agreement of $219, $209 and $207 during 2021, 2020 and 2019, respectively, which has been included as a reduction to “General and administrative.” Transactions with Yellow Cab (d) Certain family members and affiliates of Mr. Nelson Peltz, our Chairman, and Mr. Peter May, our Senior Vice Chairman, as well as Mr. Matthew Peltz, our Vice Chairman, hold indirect, minority ownership interests in operating companies managed by Yellow Cab Holdings, LLC (“Yellow Cab”), a Wendy’s franchisee, that as of January 2, 2022 owned and operated 84 Wendy’s restaurants (including 54 restaurants acquired from NPC during the first quarter of 2021 as described below). During 2021 and the fourth quarter of 2020, the Company recognized $9,869 and $1,090, respectively, in royalty, advertising fund, lease and other income from Yellow Cab and related entities. As of January 2, 2022, $974 was due from Yellow Cab for such income, which is included in “Accounts and notes receivable, net” and “Advertising funds restricted assets.” In November 2020, the Company submitted a consortium bid together with a group of pre-qualified franchisees (of which Yellow Cab was a member) to acquire the Wendy’s restaurants owned by NPC, formerly the Company’s largest franchisee, which filed for chapter 11 bankruptcy in July 2020. As part of the consortium bid, in November 2020, the Company received deposits from each of the pre-qualified franchisees (including Yellow Cab), which amounts were transferred to a third-party escrow account pending resolution of the bankruptcy sale process. On January 7, 2021, following a court-approved mediation process, Yellow Cab was selected as the purchaser for 54 of NPC’s Wendy’s restaurants. In March 2021, Yellow Cab closed on its acquisition of these restaurants and its deposit was applied against the purchase price for the restaurants. See Note 3 for further information. |
Legal and Environmental Matters
Legal and Environmental Matters | 12 Months Ended |
Jan. 02, 2022 | |
Loss Contingency [Abstract] | |
Legal and Environmental Matters | Legal and Environmental Matters The Company is involved in litigation and claims incidental to our business. We provide accruals for such litigation and claims when we determine it is probable that a liability has been incurred and the loss is reasonably estimable. We believe we have adequate accruals for all of our legal and environmental matters. We cannot estimate the aggregate possible range of loss for our existing litigation and claims for various reasons, including, but not limited to, many proceedings being in preliminary stages, with various motions either yet to be submitted or pending, discovery yet to occur and/or significant factual matters unresolved. In addition, most cases seek an indeterminate amount of damages and many involve multiple parties. Predicting the outcomes of settlement discussions or judicial or arbitral decisions is thus inherently difficult and future developments could cause these actions or claims, individually or in aggregate, to have a material adverse effect on the Company’s financial condition, results of operations, or cash flows of a particular reporting period. Certain of the Company’s present and former directors have been named in two putative stockholder derivative complaints arising out of the cybersecurity incidents that affected certain of our franchisees in 2015 and 2016. The first case, brought by James Graham in the U.S. District Court for the Southern District of Ohio (the “Graham Case”), asserts claims of breach of fiduciary duty, waste of corporate assets, unjust enrichment and gross mismanagement, and additionally names one non-director executive officer of the Company. The second case, brought by Thomas Caracci in the U.S. District Court for the Southern District of Ohio (the “Caracci Case”), asserts claims of breach of fiduciary duty and violations of Section 14(a) and Rule 14a-9 of the Securities Exchange Act of 1934. Collectively, the plaintiffs seek a judgment on behalf of the Company for all damages incurred or that will be incurred as a result of the alleged wrongful acts or omissions, a judgment ordering disgorgement of all profits, benefits, and other compensation obtained by the named individual defendants, a judgment directing the Company to reform its governance and internal procedures, attorneys’ fees and other costs. The Graham Case and the Caracci Case were consolidated and on December 21, 2018, the court issued an order naming Graham and his counsel as lead in the case. On January 31, 2019, Graham filed a consolidated verified stockholder derivative complaint with the court. On January 24, 2020, the court issued an order granting preliminary approval of the settlement, which consists of certain corporate governance undertakings and the payment of plaintiffs’ attorneys’ fees and expenses up to $950 (covered by applicable insurance). On September 15, 2021, the court issued an order granting final approval of the settlement, with the final judgment entered on September 24, 2021. On October 20, 2021, Thomas Caracci filed a Notice of Appeal. |
Advertising Costs and Funds
Advertising Costs and Funds | 12 Months Ended |
Jan. 02, 2022 | |
Marketing and Advertising Expense [Abstract] | |
Advertising Costs and Funds | Advertising Costs and FundsWe maintain U.S. and Canadian national advertising funds established to collect and administer funds contributed for use in advertising and promotional programs. Contributions to the Advertising Funds are required from both Company-operated and franchised restaurants and are based on a percentage of restaurant sales. In addition to the contributions to the Advertising Funds, Company-operated and franchised restaurants make additional contributions to other local and regional advertising programs. Restricted assets and related liabilities of the Advertising Funds at January 2, 2022 and January 3, 2021 are as follows: Year End January 2, 2022 January 3, 2021 Cash and cash equivalents $ 89,993 $ 77,279 Accounts receivable, net 65,497 63,252 Other assets 4,328 1,775 Advertising funds restricted assets $ 159,818 $ 142,306 Accounts payable $ 136,043 $ 123,064 Accrued expenses and other current liabilities 21,858 17,447 Advertising funds restricted liabilities $ 157,901 $ 140,511 Advertising expenses included in “Cost of sales” totaled $31,617, $29,671 and $29,954 in 2021, 2020 and 2019, respectively. |
Geographic Information
Geographic Information | 12 Months Ended |
Jan. 02, 2022 | |
Segments, Geographical Areas [Abstract] | |
Geographic Information | Geographic Information The table below presents revenues and properties information by geographic area: U.S. International Total 2021 Revenues $ 1,771,997 $ 125,001 $ 1,896,998 Properties 856,841 50,026 906,867 2020 Revenues $ 1,635,696 $ 98,129 $ 1,733,825 Properties 879,806 36,083 915,889 2019 Revenues $ 1,606,619 $ 102,383 $ 1,709,002 Properties 941,607 35,393 977,000 |
Segment Information (Notes)
Segment Information (Notes) | 12 Months Ended |
Jan. 02, 2022 | |
Segment Reporting [Abstract] | |
Segment Information | Segment InformationThe Company is comprised of the following segments: (1) Wendy’s U.S., (2) Wendy’s International and (3) Global Real Estate & Development. Wendy’s U.S. includes the operation and franchising of Wendy’s restaurants in the U.S. and derives its revenues from sales at Company-operated restaurants and royalties, fees and advertising fund collections from franchised restaurants. Wendy’s International includes the operation and franchising of Wendy’s restaurants in countries and territories other than the U.S. and derives its revenues from sales at Company-operated restaurants and royalties, fees and advertising fund collections from franchised restaurants. Global Real Estate & Development includes real estate activity for owned sites and sites leased from third parties, which are leased and/or subleased to franchisees, and also includes our share of the income of our TimWen real estate joint venture. In addition, Global Real Estate & Development earns fees from facilitating Franchise Flips and providing other development-related services to franchisees. The Company measures segment profit using segment adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”). Segment adjusted EBITDA excludes certain unallocated general and administrative expenses and other items that vary from period to period without correlation to the Company’s core operating performance. When the Company’s chief operating decision maker reviews balance sheet information, it is at a consolidated level. The accounting policies of the Company’s segments are the same as those described in Note 1. Revenues by segment are as follows: Year Ended 2021 2020 2019 Wendy’s U.S. $ 1,567,496 $ 1,431,382 $ 1,404,307 Wendy’s International 86,369 65,642 68,198 Global Real Estate & Development 243,133 236,801 236,497 Total revenues $ 1,896,998 $ 1,733,825 $ 1,709,002 The following table reconciles profit by segment to the Company’s consolidated income before income taxes: Year Ended 2021 2020 2019 Wendy’s U.S. (a) $ 450,117 $ 393,314 $ 369,193 Wendy’s International 27,386 20,119 20,246 Global Real Estate & Development 106,113 100,731 107,116 Total segment profit 583,616 514,164 496,555 Unallocated franchise support and other costs (753) — — Advertising funds surplus 2,770 2,904 1,337 Unallocated general and administrative (b) (116,273) (94,256) (81,230) Depreciation and amortization (125,540) (132,775) (131,693) System optimization gains, net 33,545 3,148 1,283 Reorganization and realignment costs (8,548) (16,030) (16,965) Impairment of long-lived assets (2,251) (8,037) (6,999) Unallocated other operating income, net 394 190 291 Interest expense, net (109,185) (117,737) (115,971) Loss on early extinguishment of debt (17,917) — (8,496) Investment income (loss), net 39 (225) 25,598 Other income, net 681 1,449 7,771 Income before income taxes $ 240,578 $ 152,795 $ 171,481 _______________ (a) Includes advertising funds expense of $25,000 and $14,600 for 2021 and 2020, respectively, related to the Company funding of incremental advertising to support the breakfast daypart. (b) Includes corporate overhead costs, such as employee compensation and related benefits. Net income (loss) of our equity method investments for the Brazil JV and TimWen are included in segment profit for the Wendy’s International and Global Real Estate & Development segments, respectively. Net income (loss) of equity method investments by segment was as follows: Year Ended 2021 2020 2019 Wendy’s International $ — $ (417) $ (1,022) Global Real Estate & Development 11,203 6,513 9,695 Total net income of equity method investments $ 11,203 $ 6,096 $ 8,673 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Jan. 02, 2022 | |
Accounting Policies [Abstract] | |
Principles of Consolidation, Policy | Principles of Consolidation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include all of the Company’s subsidiaries. We also consider for consolidation entities in which we have certain interests, where the controlling financial interest may be achieved through arrangements that do not involve voting interests. Such an entity, known as a variable interest entity (“VIE”), is required to be consolidated by its primary beneficiary. The primary beneficiary is the entity that possesses the power to direct the activities of the VIE that most significantly impact its economic performance and has the obligation to absorb losses or the right to receive benefits from the VIE that are significant to it. The principal entities in which we possess a variable interest include the Company’s national advertising funds for the U.S. and Canada (the “Advertising Funds”). All intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates, Policy | The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. On March 11, 2020, the World Health Organization declared the novel strain of coronavirus (“COVID-19”) a global pandemic. We continue to monitor the dynamic nature of the COVID-19 pandemic on our business, results and financial condition; however, we cannot predict the ultimate duration, scope or severity of the COVID-19 pandemic or its ultimate impact on our results of operations, financial condition and prospects. |
Reclassifications, Policy | Reclassifications Certain reclassifications have been made to the prior year presentation to conform to the current year presentation. |
Fiscal Year, Policy | Fiscal Year The Company’s fiscal reporting periods consist of 52 or 53 weeks ending on the Sunday closest to December 31 and are referred to herein as (1) “the year ended January 2, 2022” or “2021,” which consisted of 52 weeks, (2) “the year ended January 3, 2021” or “2020,” which consisted of 53 weeks, and (3) “the year ended December 29, 2019” or “2019,” which consisted of 52 weeks. All references to years, quarters and months relate to fiscal periods rather than calendar periods. |
Cash and Cash Equivalents, Policy | Cash and Cash Equivalents All highly liquid investments with a maturity of three months or less when acquired are considered cash equivalents. The Company’s cash and cash equivalents principally consist of cash in bank and money market mutual fund accounts and are primarily not in Federal Deposit Insurance Corporation insured accounts. We believe that our vulnerability to risk concentrations in our cash equivalents is mitigated by (1) our policies restricting the eligibility, credit quality and concentration limits for our placements in cash equivalents and (2) insurance from the |
Restricted Cash, Policy | Restricted Cash In accordance with the Company’s securitized financing facility, certain cash accounts have been established with the trustee for the benefit of the trustee and the noteholders and are restricted in their use. Such restricted cash primarily represents cash collections and cash reserves held by the trustee to be used for payments of principal, interest and commitment fees required for the Company’s senior secured notes. Restricted cash also includes cash collected by the Advertising Funds, usage of which is restricted for advertising activities and is included in “Advertising funds restricted assets.” Refer to Note 7 for further information. |
Accounts and Notes Receivable, Net, Policy | Accounts and Notes Receivable, Net Accounts and notes receivable, net, consist primarily of royalties, rents, property taxes and franchise fees due principally from franchisees, delivery-related receivables, credit card receivables, insurance receivables and refundable income taxes. Reserve estimates include consideration of the likelihood of default expected over the estimated life of the receivable. The Company periodically assesses the need for an allowance for doubtful accounts on its receivables based upon several key credit quality indicators such as outstanding past due balances, the financial strength of the obligor, the estimated fair value of any underlying collateral and agreement characteristics. We believe that our vulnerability to risk concentrations in our receivables is mitigated by (1) favorable historical collectability on past due balances, (2) recourse to the underlying collateral regarding sales-type and direct financing lease receivables, and (3) our expectations for fluctuations in general market conditions. Receivables are considered delinquent once they are contractually past due under the terms of the underlying agreements. See Note 7 for further information. |
Inventories, Policy | Inventories The Company’s inventories are stated at the lower of cost or net realizable value, with cost determined in accordance with the first-in, first-out method and consist primarily of restaurant food items and paper supplies. |
Cloud Computing Arrangements, Policy | Cloud Computing Arrangements (“CCA”) The Company capitalizes implementation costs associated with its CCA consistent with costs capitalized for internal-use software. Capitalized CCA implementation costs are included in “Prepaid expenses and other current assets” and “Other assets.” The CCA implementation costs are amortized over the term of the related hosting agreement, including renewal periods that are reasonably certain to be exercised. Amortization expense of CCA implementation costs is recorded to “General and administrative.” The CCA implementation costs are included within operating activities in the Company’s consolidated statements of cash flows. |
Properties and Depreciation and Amortization, Policy | Properties and Depreciation and Amortization Properties are stated at cost, including capitalized internal costs of employees to the extent such employees are dedicated to specific restaurant construction projects, less accumulated depreciation and amortization. Depreciation and amortization of properties is computed principally on the straight-line basis using the following estimated useful lives of the related major classes of properties: 3 to 20 years for office and restaurant equipment (including technology), 3 to 15 years for transportation equipment and 7 to 30 years for buildings and improvements. When the Company commits to a plan to cease using certain properties before the end of their estimated useful lives, depreciation expense is accelerated to reflect the use of the assets over their shortened useful lives. Leasehold improvements are amortized over the shorter of their estimated useful lives or the terms of the respective leases, including periods covered by renewal options that the Company is reasonably assured of exercising. The Company reviews properties for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. If such review indicates an asset group may not be recoverable, an impairment loss is recognized for the excess of the carrying amount over the fair value of an asset group to be held and used or over the fair value less cost to sell of an asset to be disposed. See “Impairment of Long-Lived Assets” below for further information. |
Goodwill, Policy | Goodwill Goodwill, representing the excess of the cost of an acquired entity over the fair value of the acquired net assets, is not amortized. Goodwill associated with our Company-operated restaurants is reduced as a result of restaurant dispositions based on the relative fair values and is included in the carrying value of the restaurant in determining the gain or loss on disposal. If a Company-operated restaurant is sold within two years of being acquired from a franchisee, the goodwill associated with the acquisition is written off in its entirety. Goodwill has been assigned to reporting units for purposes of impairment testing. The Company tests goodwill for impairment annually during the fourth quarter, or more frequently if events or changes in circumstances indicate that the asset may be impaired. Our annual impairment test of goodwill may be completed through a qualitative assessment to determine if the fair value of the reporting unit is more likely than not greater than the carrying amount. If we elect to bypass the qualitative assessment for any reporting units, or if a qualitative assessment indicates it is more likely than not that the estimated carrying value of a reporting unit exceeds its fair value, we perform a quantitative goodwill impairment test. Under the quantitative test, the fair value of the reporting unit is compared with its carrying value (including goodwill). If the carrying value of the reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. Our critical estimates in this impairment test include future sales growth, operating profit, income tax rates, terminal value growth rates, capital expenditures and the weighted average cost of capital (discount rate). Our fair value estimates are subject to change as a result of many factors including, among others, any changes in our business plans, changing economic conditions and the competitive environment. Should actual cash flows and our future estimates vary adversely from those estimates we use, we may be required to recognize goodwill impairment charges in future years. |
Impairment of Long-Lived Assets, Policy | Impairment of Long-Lived Assets Our long-lived assets include (1) properties and related definite-lived intangible assets (e.g., favorable leases) that are leased and/or subleased to franchisees, (2) Company-operated restaurant assets and related definite-lived intangible assets, which include reacquired rights under franchise agreements, and (3) finance and operating lease assets. We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We assess the recoverability of our long-lived assets by comparing the carrying amount of the asset group to future undiscounted net cash flows expected to be generated through leases and/or subleases or by our individual Company-operated restaurants. If the carrying amount of the long-lived asset group is not recoverable on an undiscounted cash flow basis, then impairment is recognized to the extent that the carrying amount exceeds its fair value and is included in “Impairment of long-lived assets.” Our critical estimates in this review process include the anticipated future cash flows from leases and/or subleases or individual Company-operated restaurants, which is used in assessing the recoverability of the respective long-lived assets. Our fair value estimates are subject to change as a result of many factors including, among others, any changes in our business plans, changing economic conditions and the competitive environment. Should actual cash flows and our future estimates vary adversely from those estimates we used, we may be required to recognize additional impairment charges in future years. |
Other Intangible Assets, Policy | Other Intangible Assets Definite-lived intangible assets are amortized on a straight-line basis using the following estimated useful lives of the related classes of intangibles: for favorable leases, the terms of the respective leases, including periods covered by renewal options that the Company as lessor is reasonably certain the tenant will exercise; 1 to 5 years for computer software; 4 to 20 years for reacquired rights under franchise agreements; and 20 years for franchise agreements. Trademarks have an indefinite life and are not amortized. |
Investments, Policy | Investments The Company has a 50% share in a partnership in a Canadian restaurant real estate joint venture (“TimWen”) with a subsidiary of Restaurant Brands International Inc., a quick-service restaurant company that owns the Tim Hortons ® brand (Tim Hortons is a registered trademark of Tim Hortons USA Inc.). In addition, the Company has a 20% share in a joint venture in Brazil (the “Brazil JV”). The Company has significant influence over these investees. Such investments are accounted for using the equity method, under which our results of operations include our share of the income (loss) of the investees in “Other operating income, net.” Cash distributions and dividends received that are determined to be returns of capital are recorded as a reduction of the carrying value of our investments and returns on our investments are recorded to “Investment income (loss), net.” The difference between the carrying value of our TimWen equity investment and the underlying equity in the historical net assets of the investee is accounted for as if the investee were a consolidated subsidiary. Accordingly, the carrying value difference is amortized over the estimated lives of the assets of the investee to which such difference would have been allocated if the equity investment were a consolidated subsidiary. To the extent the carrying value difference represents goodwill, it is not amortized. Other investments in equity securities in which the Company does not have significant influence, and for which there is not a readily determinable fair value, are recorded at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer. Realized gains and losses are reported as income or loss in the period in which the securities are sold or otherwise disposed. |
Share-based Compensation, Policy | Share-Based Compensation The Company has granted share-based compensation awards to certain employees under several equity plans (the “Equity Plans”). The Company measures the cost of employee services received in exchange for an equity award, which include grants of employee stock options and restricted shares, based on the fair value of the award at the date of grant. Share-based compensation expense is recognized net of estimated forfeitures, determined based on historical experience. The Company recognizes share-based compensation expense over the requisite service period unless the awards are subject to performance conditions, in which case we recognize compensation expense over the requisite service period to the extent performance conditions are considered probable. The Company determines the grant date fair value of stock options using a Black-Scholes-Merton option pricing model (the “Black-Scholes Model”). The grant date fair value of restricted share awards (“RSAs”), restricted share units (“RSUs”) and performance-based awards are determined using the fair market value of the Company’s common stock on the date of grant, as set forth in the applicable plan document, unless the awards are subject to market conditions, in which case we use a Monte Carlo simulation model. The Monte Carlo simulation model utilizes multiple input variables to estimate the probability that market conditions will be achieved. |
Foreign Currency Translation, Policy | Foreign Currency Translation The Company’s primary foreign operations are in Canada where the functional currency is the Canadian dollar. Financial statements of foreign subsidiaries are prepared in their functional currency and then translated into U.S. dollars. Assets and liabilities are translated at the exchange rate as of the balance sheet date and revenues, costs and expenses are translated at a monthly average exchange rate. Net gains or losses resulting from the translation are recorded to the “Foreign currency translation adjustment” component of “Accumulated other comprehensive loss.” Gains and losses arising from the impact of foreign currency exchange rate fluctuations on transactions in foreign currency are included in “General and administrative.” |
Income Taxes, Policy | Income Taxes The Company accounts for income taxes under the asset and liability method. A deferred tax asset or liability is recognized whenever there are (1) future tax effects from temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and (2) operating loss, capital loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to the years in which those differences are expected to be recovered or settled. Deferred tax assets are recognized to the extent the Company believes these assets will more likely than not be realized. In evaluating the realizability of deferred tax assets, the Company considers all available positive and negative evidence, including the interaction and the timing of future reversals of existing temporary differences, projected future taxable income, recent operating results and tax-planning strategies. When considered necessary, a valuation allowance is recorded to reduce the carrying amount of the deferred tax assets to their anticipated realizable value. The Company records uncertain tax positions on the basis of a two-step process whereby we first determine if it is more likely than not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. A tax position that meets the more-likely-than-not recognition threshold is then measured for purposes of financial statement recognition as the largest amount of benefit that is greater than 50% likely of being realized upon being effectively settled. Interest accrued for uncertain tax positions is charged to “Interest expense, net.” Penalties accrued for uncertain tax positions are charged to “General and administrative.” |
Restaurant Acquisitions, Policy | Restaurant Acquisitions and Dispositions The Company accounts for the acquisition of restaurants from franchisees using the acquisition method of accounting for business combinations. The acquisition method of accounting involves the allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed. This allocation process requires the use of estimates and assumptions to derive fair values and to complete the allocation. The excess of the purchase price over the fair values of the assets acquired and liabilities assumed represents goodwill derived from the acquisition. See “Goodwill” above for further information. |
Restaurant Dispositions, Policy | In connection with the sale of Company-operated restaurants to franchisees, the Company typically enters into several agreements, in addition to an asset purchase agreement, with franchisees including franchise, development, relationship and lease agreements. The Company typically sells restaurants’ cash, inventory and equipment and retains ownership or the leasehold interest to the real estate to lease and/or sublease to the franchisee. The Company has determined that its restaurant dispositions usually represent multiple-element arrangements, and as such, the cash consideration received is allocated to the separate elements based on their relative selling price. Cash consideration generally includes up-front consideration for the sale of the restaurants, technical assistance fees and development fees and future cash consideration for royalties and lease payments. The Company considers the future lease payments in allocating the initial cash consideration received. The Company obtains third-party evidence to estimate the relative selling price of the stated rent under the lease and/or sublease agreements which is primarily based upon comparable market rents. Based on the Company’s review of the third-party evidence, the Company records favorable or unfavorable lease assets/liabilities with a corresponding offset to the gain or loss on the sale of the restaurants. The cash consideration per restaurant for technical assistance fees and development fees is consistent with the amounts stated in the related franchise agreements which are charged for separate standalone arrangements. The Company recognizes the technical assistance and development fees over the contractual term of the franchise agreements. Future royalty income is also recognized in revenue as earned. See “Revenue Recognition” below for further information. |
Revenue Recognition, Policy | Revenue Recognition “Sales” includes revenues recognized upon delivery of food to the customer at Company-operated restaurants. “Sales” excludes taxes collected from the Company’s customers. Revenue is recognized when the food is purchased by the customer, which is when our performance obligation is satisfied. “Sales” also includes income for gift cards. Gift card payments are recorded as deferred income when received and are recognized as revenue upon redemption. “Franchise royalty revenue and fees” includes royalties, new build technical assistance fees, renewal fees, franchisee-to- franchisee restaurant transfer (“Franchise Flip”) technical assistance fees, Franchise Flip advisory fees, development fees and information technology and other fees. Royalties from franchised restaurants are based on a percentage of sales of the franchised restaurant and are recognized as earned. New build technical assistance fees, renewal fees and Franchise Flip technical assistance fees are recorded as deferred revenue when received and recognized as revenue over the contractual term of the franchise agreements, once the restaurant has opened. Development fees are deferred when received, allocated to each agreed upon restaurant, and recognized as revenue over the contractual term of each respective franchise agreement, once the restaurant has opened. These franchise fees are considered highly dependent upon and interrelated with the franchise right granted in the franchise agreement. Franchise Flip advisory fees include valuation services and fees for selecting pre-approved buyers for Franchise Flips. Franchise Flip advisory fees are paid by the seller and are recognized as revenue at closing of the Franchise Flip transaction. Information technology and other fees are recognized as revenue as earned. “Franchise rental income” includes rental income from properties owned and leased by the Company and leased or subleased to franchisees. Rental income is recognized on a straight-line basis over the respective operating lease terms. Favorable and unfavorable lease amounts related to the leased and/or subleased properties are amortized to rental income on a straight-line basis over the remaining term of the leases. “Advertising funds revenue” includes contributions to the Advertising Funds by franchisees. Revenue related to these contributions is based on a percentage of sales of the franchised restaurants and is recognized as earned. |
Cost of Sales, Policy | Cost of Sales Cost of sales includes food and paper, restaurant labor and occupancy, advertising and other operating costs relating to Company-operated restaurants. Cost of sales excludes depreciation and amortization expense. |
Vendor Incentives, Policy | Vendor Incentives The Company receives incentives from certain vendors. These incentives are recognized as earned and are classified as a reduction of “Cost of sales.” |
Advertising Costs, Policy | Advertising Costs Advertising costs are expensed as incurred and are included in “Cost of sales” and “Advertising funds expense.” Production costs of advertising are expensed when the advertisement is first released. |
Franchise Support and Other Costs, Policy | Franchise Support and Other Costs The Company incurs costs to provide direct support services to our franchisees, as well as certain other direct and incremental costs to the Company’s franchise operations. These costs primarily relate to franchise development services, facilitating Franchise Flips and information technology services, which are charged to “Franchise support and other costs,” as incurred. |
Self-insurance, Policy | Self-Insurance The Company is self-insured for most workers’ compensation losses and health care claims and purchases insurance for general liability and automotive liability losses, all subject to a $500 per occurrence retention or deductible limit. The Company provides for their estimated cost to settle both known claims and claims incurred but not yet reported. Liabilities associated with these claims are estimated, in part, by considering the frequency and severity of historical claims, both specific to us, as well as industry-wide loss experience and other actuarial assumptions. We determine our insurance obligations with the assistance of actuarial firms. Since there are many estimates and assumptions involved in recording insurance liabilities and in the case of workers’ compensation a significant period of time elapses before the ultimate resolution of claims, differences between actual future events and prior estimates and assumptions could result in adjustments to these liabilities. |
Lessee, Leases, Policy | Leases Determination of Whether a Contract Contains a Lease The Company evaluates the contracts it enters into to determine whether such contracts contain leases. A contract contains a lease if the contract conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. At commencement, contracts containing a lease are further evaluated for classification as an operating or finance lease where the Company is a lessee, or as an operating, sales-type or direct financing lease where the Company is a lessor, based on their terms. ROU Model and Determination of Lease Term The Company uses the right-of-use (“ROU”) model to account for leases where the Company is the lessee, which requires an entity to recognize a lease liability and ROU asset on the lease commencement date. A lease liability is measured equal to the present value of the remaining lease payments over the lease term and is discounted using the incremental borrowing rate, as the rate implicit in the Company’s leases is not readily determinable. The incremental borrowing rate is the rate of interest that the Company would have to pay to borrow, on a collateralized basis over a similar term, an amount equal to the lease payments in a similar economic environment. Lease payments include payments made before the commencement date and any residual value guarantees, if applicable. The initial ROU asset consists of the initial measurement of the lease liability, adjusted for any favorable or unfavorable terms for leases acquired from franchisees, as well as payments made before the commencement date, initial direct costs and lease incentives earned. When determining the lease term, the Company includes option periods that it is reasonably certain to exercise as failure to renew the lease would impose a significant economic detriment. For properties used for Company-operated restaurants, the primary economic detriment relates to the existence of unamortized leasehold improvements which might be impaired if we choose not to exercise the available renewal options. The lease term for properties leased or subleased to franchisees is determined based upon the economic detriment to the franchisee and includes consideration of the length of the franchise agreement and historical performance of the restaurant. Lease terms for real estate are generally initially between 15 and 20 years and, in most cases, provide for rent escalations and renewal options. Operating Leases For operating leases, minimum lease payments or receipts, including minimum scheduled rent increases, are recognized as rent expense where the Company is a lessee, or income where the Company is a lessor, as applicable, on a straight-line basis (“Straight-Line Rent”) over the applicable lease terms. There is a period under certain lease agreements referred to as a rent holiday (“Rent Holiday”) that generally begins on the possession date and ends on the rent commencement date. During a Rent Holiday, no cash rent payments are typically due under the terms of the lease; however, expense is recorded for that period on a straight-line basis. The excess of the Straight-Line Rent over the minimum rents paid is included in the ROU asset where the Company is a lessee. The excess of the Straight-Line Rent over the minimum rents received is recorded as a deferred lease asset and is included in “Other assets” where the Company is a lessor. Certain leases contain provisions, referred to as contingent rent (“Contingent Rent”), that require additional rental payments based upon restaurant sales volume. Contingent Rent is recognized each period as the liability is incurred or the asset is earned. Lease cost for operating leases includes the amortization of the ROU asset and interest expense related to the operating lease liability. Variable lease cost for operating leases includes Contingent Rent and payments for executory costs such as real estate taxes, insurance and common area maintenance, which are excluded from the measurement of the lease liability. Short-term lease cost for operating leases includes rental expense for leases with a term of less than 12 months. Lease costs are recorded in the consolidated statements of operations based on the nature of the underlying lease as follows: (1) rental expense related to leases for Company-operated restaurants is recorded to “Cost of sales,” (2) rental expense for leased properties that are subsequently subleased to franchisees is recorded to “Franchise rental expense” and (3) rental expense related to leases for corporate offices and equipment is recorded to “General and administrative.” Favorable and unfavorable lease amounts for operating leases where the Company is the lessor are recorded as components of “Other intangible assets” and “Other liabilities,” respectively. Favorable and unfavorable lease amounts are amortized on a straight-line basis over the term of the leases. Rental income and favorable and unfavorable lease amortization for operating leases on properties leased or subleased to franchisees is recorded to “Franchise rental income.” Lessees’ variable payments to the Company for executory costs under operating leases are recognized on a gross basis as “Franchise rental income” with a corresponding expense recorded to “Franchise rental expense.” Finance Leases Lease cost for finance leases where the Company is the lessee includes the amortization of the ROU asset, which is amortized on a straight-line basis and recorded to “Depreciation and amortization,” and interest expense on the finance lease liability, which is calculated using the interest method and recorded to “Interest expense, net.” Finance lease ROU assets are amortized over the shorter of their estimated useful lives or the terms of the respective leases, including periods covered by renewal options that the Company is reasonably certain of exercising. Sales-Type and Direct Financing Leases For sales-type and direct financing leases where the Company is the lessor, the Company records its investment in properties leased to franchisees on a net basis, which is comprised of the present value of the lease payments not yet received and the present value of the guaranteed and unguaranteed residual assets. The current and long-term portions of our net investment in sales-type and direct financing leases are included in “Accounts and notes receivable, net” and “Net investment in sales-type and direct financing leases,” respectively. Unearned income is recognized as interest income over the lease term and is included in “Interest expense, net.” Sales-type leases result in the recognition of gain or loss at the commencement of the lease, which is recorded to “Other operating income, net.” The gain or loss recognized upon commencement of the lease is directly affected by the Company’s estimate of the amount to be derived from the guaranteed and unguaranteed residual assets at the end of the lease term. The Company’s main component of this estimate is the expected fair value of the underlying assets, primarily the fair value of land. Lessees’ variable payments to the Company for executory costs under sales-type and direct financing leases are recognized on a gross basis as “Franchise rental income” with a corresponding expense recorded to “Franchise rental expense.” Significant Assumptions and Judgments Management makes certain estimates and assumptions regarding each new lease and sublease agreement, renewal and amendment, including, but not limited to, property values, market rents, property lives, discount rates and probable term, all of which can impact (1) the classification and accounting for a lease or sublease as operating or finance, including sales-type and direct financing, (2) the Rent Holiday and escalations in payment that are taken into consideration when calculating Straight-Line Rent, (3) the term over which leasehold improvements for each restaurant are amortized and (4) the values and lives of adjustments to the initial ROU asset where the Company is the lessee, or favorable and unfavorable leases where the Company is the lessor. The amount of depreciation and amortization, interest and rent expense and income reported would vary if different estimates and assumptions were used. |
Lessor, Leases, Policy | Leases Determination of Whether a Contract Contains a Lease The Company evaluates the contracts it enters into to determine whether such contracts contain leases. A contract contains a lease if the contract conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. At commencement, contracts containing a lease are further evaluated for classification as an operating or finance lease where the Company is a lessee, or as an operating, sales-type or direct financing lease where the Company is a lessor, based on their terms. ROU Model and Determination of Lease Term The Company uses the right-of-use (“ROU”) model to account for leases where the Company is the lessee, which requires an entity to recognize a lease liability and ROU asset on the lease commencement date. A lease liability is measured equal to the present value of the remaining lease payments over the lease term and is discounted using the incremental borrowing rate, as the rate implicit in the Company’s leases is not readily determinable. The incremental borrowing rate is the rate of interest that the Company would have to pay to borrow, on a collateralized basis over a similar term, an amount equal to the lease payments in a similar economic environment. Lease payments include payments made before the commencement date and any residual value guarantees, if applicable. The initial ROU asset consists of the initial measurement of the lease liability, adjusted for any favorable or unfavorable terms for leases acquired from franchisees, as well as payments made before the commencement date, initial direct costs and lease incentives earned. When determining the lease term, the Company includes option periods that it is reasonably certain to exercise as failure to renew the lease would impose a significant economic detriment. For properties used for Company-operated restaurants, the primary economic detriment relates to the existence of unamortized leasehold improvements which might be impaired if we choose not to exercise the available renewal options. The lease term for properties leased or subleased to franchisees is determined based upon the economic detriment to the franchisee and includes consideration of the length of the franchise agreement and historical performance of the restaurant. Lease terms for real estate are generally initially between 15 and 20 years and, in most cases, provide for rent escalations and renewal options. Operating Leases For operating leases, minimum lease payments or receipts, including minimum scheduled rent increases, are recognized as rent expense where the Company is a lessee, or income where the Company is a lessor, as applicable, on a straight-line basis (“Straight-Line Rent”) over the applicable lease terms. There is a period under certain lease agreements referred to as a rent holiday (“Rent Holiday”) that generally begins on the possession date and ends on the rent commencement date. During a Rent Holiday, no cash rent payments are typically due under the terms of the lease; however, expense is recorded for that period on a straight-line basis. The excess of the Straight-Line Rent over the minimum rents paid is included in the ROU asset where the Company is a lessee. The excess of the Straight-Line Rent over the minimum rents received is recorded as a deferred lease asset and is included in “Other assets” where the Company is a lessor. Certain leases contain provisions, referred to as contingent rent (“Contingent Rent”), that require additional rental payments based upon restaurant sales volume. Contingent Rent is recognized each period as the liability is incurred or the asset is earned. Lease cost for operating leases includes the amortization of the ROU asset and interest expense related to the operating lease liability. Variable lease cost for operating leases includes Contingent Rent and payments for executory costs such as real estate taxes, insurance and common area maintenance, which are excluded from the measurement of the lease liability. Short-term lease cost for operating leases includes rental expense for leases with a term of less than 12 months. Lease costs are recorded in the consolidated statements of operations based on the nature of the underlying lease as follows: (1) rental expense related to leases for Company-operated restaurants is recorded to “Cost of sales,” (2) rental expense for leased properties that are subsequently subleased to franchisees is recorded to “Franchise rental expense” and (3) rental expense related to leases for corporate offices and equipment is recorded to “General and administrative.” Favorable and unfavorable lease amounts for operating leases where the Company is the lessor are recorded as components of “Other intangible assets” and “Other liabilities,” respectively. Favorable and unfavorable lease amounts are amortized on a straight-line basis over the term of the leases. Rental income and favorable and unfavorable lease amortization for operating leases on properties leased or subleased to franchisees is recorded to “Franchise rental income.” Lessees’ variable payments to the Company for executory costs under operating leases are recognized on a gross basis as “Franchise rental income” with a corresponding expense recorded to “Franchise rental expense.” Finance Leases Lease cost for finance leases where the Company is the lessee includes the amortization of the ROU asset, which is amortized on a straight-line basis and recorded to “Depreciation and amortization,” and interest expense on the finance lease liability, which is calculated using the interest method and recorded to “Interest expense, net.” Finance lease ROU assets are amortized over the shorter of their estimated useful lives or the terms of the respective leases, including periods covered by renewal options that the Company is reasonably certain of exercising. Sales-Type and Direct Financing Leases For sales-type and direct financing leases where the Company is the lessor, the Company records its investment in properties leased to franchisees on a net basis, which is comprised of the present value of the lease payments not yet received and the present value of the guaranteed and unguaranteed residual assets. The current and long-term portions of our net investment in sales-type and direct financing leases are included in “Accounts and notes receivable, net” and “Net investment in sales-type and direct financing leases,” respectively. Unearned income is recognized as interest income over the lease term and is included in “Interest expense, net.” Sales-type leases result in the recognition of gain or loss at the commencement of the lease, which is recorded to “Other operating income, net.” The gain or loss recognized upon commencement of the lease is directly affected by the Company’s estimate of the amount to be derived from the guaranteed and unguaranteed residual assets at the end of the lease term. The Company’s main component of this estimate is the expected fair value of the underlying assets, primarily the fair value of land. Lessees’ variable payments to the Company for executory costs under sales-type and direct financing leases are recognized on a gross basis as “Franchise rental income” with a corresponding expense recorded to “Franchise rental expense.” Significant Assumptions and Judgments Management makes certain estimates and assumptions regarding each new lease and sublease agreement, renewal and amendment, including, but not limited to, property values, market rents, property lives, discount rates and probable term, all of which can impact (1) the classification and accounting for a lease or sublease as operating or finance, including sales-type and direct financing, (2) the Rent Holiday and escalations in payment that are taken into consideration when calculating Straight-Line Rent, (3) the term over which leasehold improvements for each restaurant are amortized and (4) the values and lives of adjustments to the initial ROU asset where the Company is the lessee, or favorable and unfavorable leases where the Company is the lessor. The amount of depreciation and amortization, interest and rent expense and income reported would vary if different estimates and assumptions were used. |
Concentration of Risk, Policy | Concentration of Risk Wendy’s had no customers which accounted for 10% or more of consolidated revenues in 2021, 2020 or 2019. As of January 2, 2022, Wendy’s had one main in-line distributor of food, packaging and beverage products, excluding breads, that serviced approximately 67% of Wendy’s restaurants in the U.S. and four additional in-line distributors that, in the aggregate, serviced approximately 32% of Wendy’s restaurants in the U.S. We believe that our vulnerability to risk concentrations related to significant vendors and sources of our raw materials is mitigated as we believe that there are other vendors who would be able to service our requirements. However, if a disruption of service from any of our main in-line distributors was to occur, we could experience short-term increases in our costs while distribution channels were adjusted. Wendy’s restaurants are principally located throughout the U.S. and to a lesser extent, in 31 foreign countries and U.S. territories with the largest number in Canada. Wendy’s U.S. restaurants are located in 50 states and the District of Columbia, with the largest number in Florida, Texas, Ohio, Georgia, California, North Carolina, Pennsylvania and Michigan. Because our restaurant operations are generally located throughout the U.S. and to a much lesser extent, Canada and other foreign countries and U.S. territories, we believe the risk of geographic concentration is not significant. We could be adversely affected by changing consumer preferences resulting from concerns over nutritional or safety aspects of beef, chicken, french fries or other products we sell or the effects of food safety events or disease outbreaks. Our exposure to foreign exchange risk is primarily related to fluctuations in the Canadian dollar relative to the U.S. dollar for our Canadian operations. However, our exposure to Canadian dollar foreign currency risk is mitigated by the fact that there are no Company-operated restaurants in Canada and less than 10% of Wendy’s franchised restaurants are in Canada. The Company is subject to credit risk through its accounts receivable consisting primarily of amounts due from franchisees for royalties, franchise fees and rent. In addition, we have notes receivable from certain of our franchisees. The financial condition of these franchisees is largely dependent upon the underlying business trends of the Wendy’s brand and market conditions within the quick-service restaurant industry. This concentration of credit risk is mitigated, in part, by the number of franchisees and the short-term nature of the franchise receivables. |
New Accounting Standards and New Accounting Standards Adopted, Policy | New Accounting Standards Adopted Leases In July 2021, the Financial Accounting Standards Board (“FASB”) issued an amendment that addresses an issue related to a lessor’s accounting for certain leases with variable lease payments that could result in the recognition of a selling loss at lease commencement even if the lessor expects the arrangement to be profitable overall. The amendment specifies lessors should classify and account for such a lease with variable lease payments as an operating lease, dependent upon meeting certain criteria, for which a selling profit or loss is not recognized. The Company early adopted this amendment during the third quarter of 2021 by applying the guidance prospectively to leases that commence or are modified on or after the date of adoption. The adoption of this guidance did not have a material impact on our consolidated financial statements. New Accounting Standards Business Combinations In October 2021, the FASB issued an amendment to improve the accounting for revenue contracts with customers acquired in a business combination. The amendment requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with current revenue recognition guidance as if the acquirer had originated the contracts. The standard is effective beginning with our 2023 fiscal year. The Company does not expect the guidance to have a material impact on our consolidated financial statements. Financial Instruments In August 2020, the FASB issued an amendment that simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The amendment simplifies accounting for convertible instruments by removing major separation models required under current accounting guidance. In addition, the amendment removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for the exception, and also simplifies the diluted earnings per share calculation in certain areas. The amendment is effective commencing with our 2022 fiscal year. The Company does not expect the guidance to have a material impact on our consolidated financial statements. |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Jan. 02, 2022 | |
Revenue [Abstract] | |
Disaggregation of Revenue | The following tables disaggregate revenue by segment and source for 2021, 2020 and 2019: Wendy’s U.S. Wendy’s International Global Real Estate & Development Total 2021 Sales at Company-operated restaurants $ 730,415 $ 3,659 $ — $ 734,074 Franchise royalty revenue 407,317 53,392 — 460,709 Franchise fees 64,170 5,391 6,478 76,039 Franchise rental income — — 236,655 236,655 Advertising funds revenue 365,594 23,927 — 389,521 Total revenues $ 1,567,496 $ 86,369 $ 243,133 $ 1,896,998 2020 Sales at Company-operated restaurants $ 722,764 $ — $ — $ 722,764 Franchise royalty revenue 373,162 43,346 — 416,508 Franchise fees 22,126 1,962 4,153 28,241 Franchise rental income — — 232,648 232,648 Advertising funds revenue 313,330 20,334 — 333,664 Total revenues $ 1,431,382 $ 65,642 $ 236,801 $ 1,733,825 2019 Sales at Company-operated restaurants $ 707,485 $ — $ — $ 707,485 Franchise royalty revenue 355,702 44,998 — 400,700 Franchise fees 21,889 2,978 3,432 28,299 Franchise rental income — — 233,065 233,065 Advertising funds revenue 319,231 20,222 — 339,453 Total revenues $ 1,404,307 $ 68,198 $ 236,497 $ 1,709,002 |
Contract balances, assets and liabilities | The following table provides information about receivables and contract liabilities (deferred franchise fees) from contracts with customers: Year End January 2, January 3, 2021 (a) Receivables, which are included in “Accounts and notes receivable, net” (b) $ 49,168 $ 57,677 Receivables, which are included in “Advertising funds restricted assets” 65,497 63,252 Deferred franchise fees (c) 97,186 97,785 _______________ (a) Excludes funds collected from the sale of gift cards, which are primarily reimbursed to franchisees upon redemption at franchised restaurants and do not ultimately result in the recognition of revenue in the Company’s consolidated statements of operations. (b) Includes receivables related to “Sales” and “Franchise royalty revenue and fees.” (c) Deferred franchise fees are included in “Accrued expenses and other current liabilities” and “Deferred franchise fees” and totaled $9,084 and $88,102 as of January 2, 2022, respectively, and $8,691 and $89,094 as of January 3, 2021, respectively. |
Deferred franchise fee rollforward | Significant changes in deferred franchise fees are as follows: Year Ended 2021 2020 2019 Deferred franchise fees at beginning of period $ 97,785 $ 100,689 $ 102,205 Revenue recognized during the period (19,838) (8,955) (9,487) New deferrals due to cash received and other 19,239 6,051 7,971 Deferred franchise fees at end of period $ 97,186 $ 97,785 $ 100,689 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | The following table reflects the estimated franchise fees to be recognized in the future related to performance obligations that are unsatisfied at the end of the period: Estimate for fiscal year: 2022 $ 9,084 2023 6,284 2024 6,096 2025 5,911 2026 5,795 Thereafter 64,016 $ 97,186 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Jan. 02, 2022 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | The table below presents the allocation of the total purchase price to the fair value of assets acquired and liabilities assumed for restaurants acquired from franchisees: Year Ended 2021 (a) 2019 Restaurants acquired from franchisees (b) 93 5 Total consideration paid, net of cash received $ 127,948 $ 5,052 Identifiable assets acquired and liabilities assumed: Properties 21,984 666 Acquired franchise rights 81,239 1,354 Finance lease assets 25,547 5,350 Operating lease assets 44,282 — Finance lease liabilities (25,059) (4,084) Operating lease liabilities (43,478) — Other (9) (2,316) Total identifiable net assets 104,506 970 Goodwill $ 23,442 $ 4,082 _______________ (a) The fair value of the assets acquired are provisional amounts as of January 2, 2022, pending final purchase accounting adjustments. The Company utilized management estimates and consultation with an independent third-party valuation firm to assist in the valuation process. (b) 2021 includes two restaurants under construction and not operating as of January 2, 2022. |
System Optimization Gains, Net
System Optimization Gains, Net (Tables) | 12 Months Ended |
Jan. 02, 2022 | |
System optimization gains, net | |
Summary of Disposition Activity | Year End January 2, 2022 January 3, 2021 Land $ 370,742 $ 372,473 Buildings and improvements 504,462 504,504 Leasehold improvements 422,094 409,306 Office, restaurant and transportation equipment 282,770 255,469 1,580,068 1,541,752 Accumulated depreciation and amortization (673,201) (625,863) $ 906,867 $ 915,889 |
Assets Held for Sale | Year End January 2, 2022 January 3, 2021 Number of restaurants classified as held for sale — 43 Net restaurant assets held for sale (a) $ — $ 20,587 Other assets held for sale (b) $ 3,541 $ 1,732 _______________ (a) Net restaurant assets held for sale as of January 3, 2021 included New York Company-operated restaurants (excluding Manhattan) and consisted primarily of cash, inventory, property and an estimate of allocable goodwill. During the three months ended April 4, 2021, the Company also classified its four Manhattan restaurants as held for sale. (b) Other assets held for sale primarily consist of surplus properties. |
System Optimization | |
System optimization gains, net | |
Summary of Disposition Activity | The following is a summary of the disposition activity recorded as a result of our system optimization initiative: Year Ended 2021 2020 2019 Number of restaurants sold to franchisees 47 1 — Proceeds from sales of restaurants (a) $ 50,518 $ 50 $ — Net assets sold (b) (16,939) (34) — Goodwill related to sales of restaurants (4,847) — — Net unfavorable leases (c) (2,939) — — Gain on sales-type leases 7,156 — — Other (d) (2,148) — — 30,801 16 — Post-closing adjustments on sales of restaurants (e) (f) 1,218 362 1,087 Gain on sales of restaurants, net 32,019 378 1,087 Gain on sales of other assets, net (g) 1,526 2,770 196 System optimization gains, net $ 33,545 $ 3,148 $ 1,283 _______________ (a) In addition to the proceeds noted herein, the Company received cash proceeds of $39 during 2021 related to a note receivable issued in connection with the sale of the Manhattan Company-operated restaurants. (b) Net assets sold consisted primarily of equipment. (c) During 2021, the Company recorded favorable lease assets of $3,799 and unfavorable lease liabilities of $6,738 as a result of leasing and/or subleasing land, buildings and/or leasehold improvements to franchisees, in connection with the sale of the New York Company-operated restaurants (including Manhattan). (d) 2021 includes a deferred gain of $3,500 as a result of certain contingencies related to the extension of lease terms. (e) 2021 includes a gain on sales-type leases of $1,625 and the write-off of certain lease assets of $927 as a result of an amendment to lease terms in connection with a Manhattan Company-operated restaurant previously sold to a franchisee. (f) 2021, 2020 and 2019 include the recognition of deferred gains of $515, $368 and $911, respectively, as a result of the resolution of certain contingencies related to the extension of lease terms for restaurants previously sold to franchisees. (g) During 2021, 2020 and 2019, Wendy’s received cash proceeds of $4,561, $6,041 and $3,448, respectively, primarily from the sale of surplus and other properties. |
Reorganization and Realignmen_2
Reorganization and Realignment Costs (Tables) | 12 Months Ended |
Jan. 02, 2022 | |
Restructuring Cost and Reserve | |
Restructuring and Related Costs | The following is a summary of the initiatives included in “Reorganization and realignment costs:” Year Ended 2021 2020 2019 Operations and field realignment $ 1,758 $ 3,801 $ — IT realignment (10) 7,288 9,127 G&A realignment (52) 614 7,749 System optimization initiative 6,852 4,327 89 Reorganization and realignment costs $ 8,548 $ 16,030 $ 16,965 |
Operations and Field Realignment | |
Restructuring Cost and Reserve | |
Restructuring and Related Costs | The following is a summary of the activity recorded as a result of the Operations and Field Realignment Plan: Year Ended Total Incurred Since Inception 2021 2020 Severance and related employee costs $ 270 $ 3,113 $ 3,383 Third-party and other costs 1,488 67 1,555 1,758 3,180 4,938 Share-based compensation (a) — 621 621 Total operations and field realignment $ 1,758 $ 3,801 $ 5,559 _______________ (a) Primarily represents incremental share-based compensation resulting from the modification of stock options in connection with the termination of employees under the Operations and Field Realignment Plan. |
Schedule of Restructuring Reserve by Type of Cost | As of January 2, 2022, the accruals for the Operations and Field Realignment Plan are included in “Accrued expenses and other current liabilities.” As of January 3, 2021, the accruals for the Operations and Field Realignment Plan are included in “Accrued expenses and other current liabilities” and “Other liabilities” and totaled $2,487 and $113, respectively. The tables below present a rollforward of our accruals for the Operations and Field Realignment Plan. Balance January 3, 2021 Charges Payments Balance January 2, 2022 Severance and related employee costs $ 2,600 $ 270 $ (2,715) $ 155 Third-party and other costs — 1,488 (1,477) 11 $ 2,600 $ 1,758 $ (4,192) $ 166 Balance December 29, 2019 Charges Payments Balance January 3, 2021 Severance and related employee costs $ — $ 3,113 $ (513) $ 2,600 Third-party and other costs — 67 (67) — $ — $ 3,180 $ (580) $ 2,600 |
IT Realignment | |
Restructuring Cost and Reserve | |
Restructuring and Related Costs | The following is a summary of the activity recorded as a result of the IT Realignment Plan: Year Ended Total Incurred Since Inception 2021 2020 2019 Severance and related employee costs (a) $ (165) $ 843 $ 7,548 $ 8,226 Recruitment and relocation costs 146 1,296 — 1,442 Third-party and other costs 9 5,149 1,386 6,544 (10) 7,288 8,934 16,212 Share-based compensation (b) — — 193 193 Total IT realignment $ (10) $ 7,288 $ 9,127 $ 16,405 _______________ (a) 2021 includes a reversal of an accrual as a result of a change in estimate. (b) Primarily represents incremental share-based compensation resulting from the modification of stock options in connection with the termination of employees under the IT realignment plan. |
Schedule of Restructuring Reserve by Type of Cost | The tables below present a rollforward of our accruals for the IT Realignment Plan, which are included in “Accrued expenses and other current liabilities” as of January 2, 2022 and January 3, 2021. Balance January 3, 2021 Charges Payments Balance January 2, 2022 Severance and related employee costs $ 1,508 $ (165) $ (1,250) $ 93 Recruitment and relocation costs — 146 (146) — Third-party and other costs — 9 (9) — $ 1,508 $ (10) $ (1,405) $ 93 Balance December 29, 2019 Charges Payments Balance January 3, 2021 Severance and related employee costs $ 7,548 $ 843 $ (6,883) $ 1,508 Recruitment and relocation costs — 1,296 (1,296) — Third-party and other costs 1,076 5,149 (6,225) — $ 8,624 $ 7,288 $ (14,404) $ 1,508 |
G&A Realignment | |
Restructuring Cost and Reserve | |
Restructuring and Related Costs | The following is a summary of the activity recorded as a result of the G&A Realignment Plan: Year Ended Total Incurred 2021 2020 2019 Severance and related employee costs (a) $ (74) $ 28 $ 5,485 $ 24,192 Recruitment and relocation costs 1 360 950 2,877 Third-party and other costs 2 13 100 2,225 (71) 401 6,535 29,294 Share-based compensation (b) 19 213 1,214 8,130 Termination of defined benefit plans — — — 1,335 Total G&A realignment $ (52) $ 614 $ 7,749 $ 38,759 _______________ (a) 2021 includes a reversal of an accrual as a result of a change in estimate. (b) Primarily represents incremental share-based compensation resulting from the modification of stock options in connection with the termination of employees under the G&A Realignment Plan. |
Schedule of Restructuring Reserve by Type of Cost | The tables below present a rollforward of our accruals for the G&A Realignment Plan, which are included in “Accrued expenses and other current liabilities” as of January 2, 2022 and January 3, 2021. Balance Charges Payments Balance Severance and related employee costs $ 932 $ (74) $ (847) $ 11 Recruitment and relocation costs — 1 (1) — Third-party and other costs — 2 (2) — $ 932 $ (71) $ (850) $ 11 Balance Charges Payments Balance Severance and related employee costs $ 5,276 $ 28 $ (4,372) $ 932 Recruitment and relocation costs 83 360 (443) — Third-party and other costs — 13 (13) — $ 5,359 $ 401 $ (4,828) $ 932 |
System Optimization Initiative | |
Restructuring Cost and Reserve | |
Restructuring and Related Costs | The following is a summary of the costs recorded as a result of our system optimization initiative: Year Ended Total Incurred Since Inception 2021 2020 2019 Severance and related employee costs $ 661 $ — $ — $ 18,898 Professional fees 1,570 4,323 72 23,677 Other (a) 1,765 4 17 7,618 3,996 4,327 89 50,193 Accelerated depreciation and amortization (b) — — — 25,398 NPC lease termination costs (c) 2,856 — — 2,856 Share-based compensation (d) — — — 5,013 Total system optimization initiative $ 6,852 $ 4,327 $ 89 $ 83,460 _______________ (a) 2021 includes transaction fees of $1,350 associated with the NPC bankruptcy sale process. (b) Primarily includes accelerated amortization of previously acquired franchise rights related to the Company-operated restaurants in territories that have been sold to franchisees in connection with our system optimization initiative. (c) 2021 includes the write-off of lease assets of $1,376 and lease termination fees paid of $1,480. (d) Represents incremental share-based compensation resulting from the modification of stock options and performance-based awards in connection with the termination of employees under our system optimization initiative. |
Schedule of Restructuring Reserve by Type of Cost | The tables below present a rollforward of our accruals for our system optimization initiative, which were included in “Accrued expenses and other current liabilities” as of January 3, 2021. Balance Charges Payments Balance Severance and related employee costs $ — $ 661 $ (661) $ — Professional fees 1,230 1,570 (2,800) — Other — 1,765 (1,765) — $ 1,230 $ 3,996 $ (5,226) $ — Balance Charges Payments Balance Professional fees $ — $ 4,323 $ (3,093) $ 1,230 Other — 4 (4) — $ — $ 4,327 $ (3,097) $ 1,230 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 12 Months Ended |
Jan. 02, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The calculation of basic and diluted net income per share was as follows: Year Ended 2021 2020 2019 Net income $ 200,392 $ 117,832 $ 136,940 Common stock: Weighted average basic shares outstanding 221,375 223,684 229,944 Dilutive effect of stock options and restricted shares 3,030 4,330 5,131 Weighted average diluted shares outstanding 224,405 228,014 235,075 Net income per share: Basic $ .91 $ .53 $ .60 Diluted $ .89 $ .52 $ .58 |
Cash and Receivables (Tables)
Cash and Receivables (Tables) | 12 Months Ended |
Jan. 02, 2022 | |
Cash and Receivables [Abstract] | |
Schedule of Cash and Cash Equivalents | Year End January 2, 2022 January 3, 2021 Cash and cash equivalents Cash $ 249,438 $ 231,922 Cash equivalents — 75,067 249,438 306,989 Restricted cash Accounts held by trustee for the securitized financing facility 27,188 33,635 Other 347 338 27,535 33,973 Advertising Funds (a) 89,993 77,279 117,528 111,252 Total cash, cash equivalents and restricted cash $ 366,966 $ 418,241 _______________ (a) Included in “Advertising funds restricted assets.” |
Schedule of Accounts and Notes Receivable | Year End January 2, 2022 January 3, 2021 Gross Allowance for Doubtful Accounts Net Gross Allowance for Doubtful Accounts Net Accounts and Notes Receivable, Net Current Accounts receivable (a) (b) $ 104,744 $ (3,229) $ 101,515 $ 97,399 $ (3,739) $ 93,660 Notes receivable from franchisees (c) (d) 23,000 (4,975) 18,025 21,227 (4,996) 16,231 $ 127,744 $ (8,204) $ 119,540 $ 118,626 $ (8,735) $ 109,891 Non-current (e) Notes receivable from franchisees (d) $ 4,514 $ (315) $ 4,199 $ 6,759 $ (629) $ 6,130 _______________ (a) Includes income tax refund receivables of $11,901 and $5,399 as of January 2, 2022 and January 3, 2021, respectively. (b) As of January 3, 2021, included incremental rent receivables of $5,226 due to actions taken by the Company in response to the COVID-19 pandemic, which included offering to defer base rent payments on properties owned by Wendy’s and leased to franchisees by 50% and offering to pass along any deferrals that were obtained on properties leased by Wendy’s and subleased to franchisees by up to 100%, beginning in May for a three month period, which were substantially repaid over a 12 month period beginning in August 2020. (c) Includes the current portion of sales-type and direct financing lease receivables of $6,266 and $5,965 as of January 2, 2022 and January 3, 2021, respectively. See Note 20 for further information. (d) Includes a note receivable from a franchisee in India, of which $335 and $356 are included in current notes receivable and $315 and $629 are included in non-current notes receivable as of January 2, 2022 and January 3, 2021, respectively. As of January 2, 2022 and January 3, 2021, the Company had reserves of $650 and $985, respectively, on the loan outstanding to the franchisee in India. Includes a note receivable from a franchisee in Indonesia, of which $1,795 and $831 are included in current notes receivable as of January 2, 2022 and January 3, 2021, respectively, and $1,780 which is included in non-current notes receivable as of January 3, 2021. Includes notes receivable related to the Brazil JV, of which $12,925 and $12,775 are included in current notes receivable and $4,200 and $4,350 are included in non-current notes receivable as of January 2, 2022 and January 3, 2021, respectively. As of both January 2, 2022 and January 3, 2021, the Company had reserves of $4,640 on the loans outstanding related to the Brazil JV. See Note 8 for further information. (e) Included in “Other assets.” |
Accounts Receivable, Allowance for Doubtful Accounts | The following is an analysis of the allowance for doubtful accounts: Accounts Receivable Notes Receivable Total 2021 Balance at January 3, 2021 $ 3,739 $ 5,625 $ 9,364 Provision for doubtful accounts (148) (335) (483) Uncollectible accounts written off, net of recoveries (362) — (362) Balance at January 2, 2022 $ 3,229 $ 5,290 $ 8,519 2020 Balance at December 29, 2019 $ 3,314 $ 6,705 $ 10,019 Provision for doubtful accounts 647 206 853 Uncollectible accounts written off, net of recoveries (222) (1,286) (1,508) Balance at January 3, 2021 $ 3,739 $ 5,625 $ 9,364 2019 Balance at December 30, 2018 $ 4,939 $ 2,000 $ 6,939 Provision for doubtful accounts (1,618) 4,912 3,294 Uncollectible accounts written off, net of recoveries (7) (207) (214) Balance at December 29, 2019 $ 3,314 $ 6,705 $ 10,019 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Jan. 02, 2022 | |
Schedule of Equity Method Investments | |
Schedule of Equity Method Investments and Other Investments in Equity Securities | The following is a summary of the carrying value of our investments: Year End January 2, January 3, Equity method investments $ 39,870 $ 44,574 Other investments in equity securities 10,000 — $ 49,870 $ 44,574 |
Schedule of Equity Method Investments | Presented below is activity related to our portion of TimWen and the Brazil JV included in our consolidated balance sheets and consolidated statements of operations as of and for the years ended January 2, 2022, January 3, 2021 and December 29, 2019. Year Ended 2021 2020 2019 Balance at beginning of period $ 44,574 $ 45,310 $ 47,021 Equity in earnings for the period 14,329 8,389 10,943 Amortization of purchase price adjustments (a) (3,126) (2,293) (2,270) 11,203 6,096 8,673 Distributions received (16,337) (8,376) (13,400) Foreign currency translation adjustment included in “Other comprehensive income” and other 430 1,544 3,016 Balance at end of period $ 39,870 $ 44,574 $ 45,310 _______________ (a) Purchase price adjustments that impacted the carrying value of the Company’s investment in TimWen are being amortized over the average original aggregate life of 21 years. |
Properties (Tables)
Properties (Tables) | 12 Months Ended |
Jan. 02, 2022 | |
Property, Plant and Equipment [Abstract] | |
Properties | Year End January 2, 2022 January 3, 2021 Land $ 370,742 $ 372,473 Buildings and improvements 504,462 504,504 Leasehold improvements 422,094 409,306 Office, restaurant and transportation equipment 282,770 255,469 1,580,068 1,541,752 Accumulated depreciation and amortization (673,201) (625,863) $ 906,867 $ 915,889 |
Goodwill And Other Intangible_2
Goodwill And Other Intangible Assets (Tables) | 12 Months Ended |
Jan. 02, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Goodwill activity for 2021 and 2020 was as follows: Wendy’s U.S. Wendy’s Global Real Estate & Development Total Balance at December 29, 2019: Goodwill, gross $ 602,491 $ 40,269 $ 122,548 $ 765,308 Accumulated impairment losses (a) — (9,397) — (9,397) Goodwill, net 602,491 30,872 122,548 755,911 Changes in goodwill: Restaurant dispositions (b) (5,394) — — (5,394) Currency translation adjustment and other (223) 755 — 532 Balance at January 3, 2021: Goodwill, gross 596,874 41,024 122,548 760,446 Accumulated impairment losses (a) — (9,397) — (9,397) Goodwill, net 596,874 31,627 122,548 751,049 Changes in goodwill: Restaurant acquisitions 23,442 — — 23,442 Restaurant dispositions (b) 547 — — 547 Currency translation adjustment and other — 240 — 240 Balance at January 2, 2022: Goodwill, gross 620,863 41,264 122,548 784,675 Accumulated impairment losses (a) — (9,397) — (9,397) Goodwill, net $ 620,863 $ 31,867 $ 122,548 $ 775,278 _______________ (a) Accumulated impairment losses resulted from the full impairment of goodwill of the Wendy’s international franchise restaurants during the fourth quarter of 2013. (b) During 2020, in connection with the Company’s plan to sell 43 Company-operated restaurants in New York (excluding Manhattan) in the second quarter of 2021, goodwill of $5,394 was reclassified to assets held for sale. The goodwill allocated to the sale was decreased by $568 during 2021 upon final disposition of the restaurants. In addition, during 2021, goodwill of $21 was reclassified to assets held for sale in connection with the Company’s sale of its four Manhattan restaurants. See Note 4 for further information. |
Schedule Of Finite Lived And Indefinite Lived Intangible Assets | The following is a summary of the components of other intangible assets and the related amortization expense: Year End January 2, 2022 January 3, 2021 Cost Accumulated Amortization Net Cost Accumulated Amortization Net Indefinite-lived: Trademarks $ 903,000 $ — $ 903,000 $ 903,000 $ — $ 903,000 Definite-lived: Franchise agreements 349,391 (220,663) 128,728 349,255 (203,938) 145,317 Favorable leases 159,488 (62,136) 97,352 163,015 (55,581) 107,434 Reacquired rights under franchise agreements 91,111 (4,732) 86,379 9,872 (3,414) 6,458 Software 234,574 (169,242) 65,332 206,741 (143,990) 62,751 $ 1,737,564 $ (456,773) $ 1,280,791 $ 1,631,883 $ (406,923) $ 1,224,960 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Aggregate amortization expense: Actual for fiscal year: 2019 $ 53,182 2020 52,588 2021 55,236 Estimate for fiscal year: 2022 $ 53,690 2023 49,919 2024 45,315 2025 38,088 2026 32,234 Thereafter 158,545 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended |
Jan. 02, 2022 | |
Accrued Liabilities [Abstract] | |
Schedule of Accrued Liabilities | Year End January 2, 2022 January 3, 2021 Accrued compensation and related benefits $ 63,835 $ 44,264 Accrued taxes 28,142 27,162 NPC consortium bid (a) — 38,361 Other 48,806 45,534 $ 140,783 $ 155,321 _______________ (a) Represented amounts received from franchisees as part of the consortium bid to acquire NPC’s Wendy’s restaurants. See Note 3 for further information. |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Jan. 02, 2022 | |
Debt Disclosure [Abstract] | |
Long-term debt | Long-term debt consisted of the following: Year End January 2, January 3, Series 2021-1 Class A-2 Notes: 2.370% Series 2021-1 Class A-2-I Notes, anticipated repayment date 2029 $ 447,750 $ — 2.775% Series 2021-1 Class A-2-II Notes, anticipated repayment date 2031 646,750 — Series 2019-1 Class A-2 Notes: 3.783% Series 2019-1 Class A-2-I Notes, anticipated repayment date 2026 368,000 386,000 4.080% Series 2019-1 Class A-2-II Notes, anticipated repayment date 2029 414,000 434,250 Series 2018-1 Class A-2 Notes: 3.573% Series 2018-1 Class A-2-I Notes, repaid in connection with the June 2021 refinancing — 436,500 3.884% Series 2018-1 Class A-2-II Notes, anticipated repayment date 2028 456,000 460,750 Series 2015-1 Class A-2 Notes: 4.497% Series 2015-1 Class A-2-III Notes, repaid in connection with the June 2021 refinancing — 473,750 Canadian revolving credit facility — 1,962 7% debentures, due in 2025 85,175 83,998 Unamortized debt issuance costs (37,009) (30,085) 2,380,666 2,247,125 Less amounts payable within one year (24,250) (28,962) Total long-term debt $ 2,356,416 $ 2,218,163 |
Aggregate maturities of long-term debt | Aggregate annual maturities of long-term debt, excluding the effect of purchase accounting adjustments, as of January 2, 2022 were as follows: Fiscal Year 2022 $ 24,250 2023 24,250 2024 24,250 2025 114,250 2026 372,250 Thereafter 1,863,250 $ 2,422,500 |
Pledged Assets | The following is a summary of the Company’s assets pledged as collateral for certain debt: Year End January 2, Cash and cash equivalents $ 29,201 Restricted cash and other assets (including long-term) 27,193 Accounts and notes receivable, net 41,964 Inventories 5,180 Properties 59,717 Other intangible assets 1,026,736 $ 1,189,991 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Jan. 02, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value, by Balance Sheet Grouping | The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments: Year End January 2, 2022 January 3, 2021 Carrying Fair Carrying Fair Fair Value Financial assets Cash equivalents $ — $ — $ 75,067 $ 75,067 Level 1 Other investments in equity securities (a) 10,000 10,000 — — Level 2 Financial liabilities Series 2021-1 Class A-2-I Notes (b) 447,750 439,283 — — Level 2 Series 2021-1 Class A-2-II Notes (b) 646,750 642,352 — — Level 2 Series 2019-1 Class A-2-I Notes (b) 368,000 381,579 386,000 409,778 Level 2 Series 2019-1 Class A-2-II Notes (b) 414,000 439,792 434,250 469,555 Level 2 Series 2018-1 Class A-2-I Notes (b) — — 436,500 450,381 Level 2 Series 2018-1 Class A-2-II Notes (b) 456,000 473,693 460,750 491,021 Level 2 Series 2015-1 Class A-2-III Notes (b) — — 473,750 481,851 Level 2 Canadian revolving credit facility — — 1,962 1,962 Level 2 7% debentures, due in 2025 (b) 85,175 101,142 83,998 98,775 Level 2 _______________ (a) The fair value of our other investments in equity securities is based on our review of information provided by the investment manager, which is based on observable price changes in orderly transactions for an identical or similar investment of the same issuer. (b) The fair values were based on quoted market prices in markets that are not considered active markets. |
Fair value of assets and liabilities (other than cash and cash equivalents) measured at fair value on a nonrecurring basis | Fair Value Measurements 2021 Total Losses January 2, Level 1 Level 2 Level 3 Held and used $ 1,618 $ — $ — $ 1,618 $ 2,051 Held for sale 371 — — 371 200 Total $ 1,989 $ — $ — $ 1,989 $ 2,251 Fair Value Measurements 2020 Total Losses January 3, Level 1 Level 2 Level 3 Held and used $ 2,653 $ — $ — $ 2,653 $ 7,586 Held for sale 855 — — 855 451 Total $ 3,508 $ — $ — $ 3,508 $ 8,037 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jan. 02, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax, Domestic and Foreign | Income before income taxes is set forth below: Year Ended 2021 2020 2019 Domestic $ 228,756 $ 149,046 $ 160,474 Foreign (a) 11,822 3,749 11,007 $ 240,578 $ 152,795 $ 171,481 _______________ (a) Excludes foreign income of domestic subsidiaries. |
Schedule of Components of Income Tax (Expense) Benefit | The (provision for) benefit from income taxes is set forth below: Year Ended 2021 2020 2019 Current: U.S. federal $ (38,416) $ (16,176) $ (18,421) State (7,039) (3,723) (6,093) Foreign (8,512) (4,798) (9,190) Current tax provision (53,967) (24,697) (33,704) Deferred: U.S. federal (52) (6,707) 1,585 State 15,993 (3,185) (2,449) Foreign (2,160) (374) 27 Deferred tax (provision) benefit 13,781 (10,266) (837) Income tax provision $ (40,186) $ (34,963) $ (34,541) |
Schedule of Deferred Tax Assets and Liabilities | Deferred tax assets (liabilities) are set forth below: Year End January 2, 2022 January 3, 2021 Deferred tax assets: Operating and finance lease liabilities $ 368,932 $ 365,005 Net operating loss and credit carryforwards 60,620 62,210 Deferred revenue 23,636 24,303 Unfavorable leases 19,060 23,511 Accrued compensation and related benefits 18,487 16,443 Accrued expenses and reserves 6,763 7,673 Other 7,586 5,869 Valuation allowances (38,277) (49,968) Total deferred tax assets 466,807 455,046 Deferred tax liabilities: Operating and finance lease assets (341,681) (332,515) Intangible assets (290,088) (301,969) Fixed assets (63,936) (63,826) Other (38,812) (37,491) Total deferred tax liabilities (734,517) (735,801) $ (267,710) $ (280,755) |
Summary of Net Operating Loss and Tax Credit Carryforwards | The amounts and expiration dates of net operating loss and tax credit carryforwards are as follows: Amount Expiration Tax credit carryforwards: U.S. federal foreign tax credits $ 15,309 2022-2032 State tax credits 593 2022-2023 Foreign tax credits of non-U.S. subsidiaries 4,159 Indefinite Total $ 20,061 Net operating loss carryforwards (pre-tax): State and local net operating loss carryforwards $ 1,131,604 2022-Indefinite Foreign net operating loss carryforwards 6,962 Indefinite Total $ 1,138,566 |
Schedule of Effective Income Tax Rate Reconciliation | The reconciliation of income tax computed at the U.S. federal statutory rate of 21% to reported income tax is set forth below: Year Ended 2021 2020 2019 Income tax provision at the U.S. federal statutory rate $ (50,521) $ (32,087) $ (36,011) State income tax provision, net of U.S. federal income tax effect (6,256) (4,664) (6,470) Prior years’ tax matters (a) 1,820 1,761 6,135 Excess federal tax benefits from share-based compensation 7,160 5,338 5,841 Foreign and U.S. tax effects of foreign operations (5) (397) 250 Valuation allowances (b) 11,807 (4,593) (2,833) Non-deductible goodwill (c) (947) — — Tax credits 1,028 1,901 879 Non-deductible executive compensation (3,810) (1,973) (1,925) Unrepatriated earnings (282) (283) (402) Non-deductible expenses and other (180) 34 (5) $ (40,186) $ (34,963) $ (34,541) _______________ (a) 2019 primarily relates to a reduction in unrecognized tax benefits due to a lapse of statute of limitations. (b) 2021 primarily relates to the $12,606 benefit resulting from the state tax law change described above. The effect of the tax law change also included $840 of additional deferred tax expense included in the State income tax provision line item, for a total of $11,766. (c) Related to the sale of the New York Company-operated restaurants (including Manhattan). See Note 4 for further information. |
Schedule of Unrecognized Tax Benefits Roll Forward | As of January 2, 2022, the Company had unrecognized tax benefits of $18,849, which, if resolved favorably would reduce income tax expense by $14,890. A reconciliation of the beginning and ending amount of unrecognized tax benefits follows: Year Ended 2021 2020 2019 Beginning balance $ 20,973 $ 22,323 $ 27,632 Additions: Tax positions of current year 157 322 1,356 Tax positions of prior years — — — Reductions: Tax positions of prior years (2,015) (1,183) (227) Settlements (46) (119) — Lapse of statute of limitations (220) (370) (6,438) Ending balance $ 18,849 $ 20,973 $ 22,323 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Jan. 02, 2022 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Treasury Stock | There were 470,424 shares of common stock issued at the beginning and end of 2021, 2020 and 2019. Treasury stock activity for 2021, 2020 and 2019 was as follows: Year Ended 2021 2020 2019 Number of shares at beginning of year 246,156 245,535 239,191 Repurchases of common stock 11,487 3,512 10,158 Common shares issued: Stock options, net (2,657) (2,358) (2,912) Restricted stock, net (337) (465) (834) Director fees (17) (15) (14) Other (57) (53) (54) Number of shares at end of year 254,575 246,156 245,535 |
Schedule of Accumulated Other Comprehensive Income (Loss) | The following table provides a rollforward of accumulated other comprehensive loss, which is entirely comprised of foreign currency translation: Year Ended 2021 2020 2019 Balance at beginning of period $ (49,641) $ (53,828) $ (61,673) Foreign currency translation 1,441 4,187 7,845 Balance at end of period $ (48,200) $ (49,641) $ (53,828) |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Jan. 02, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Share-based Compensation, Stock Options, Activity | The following table summarizes stock option activity during 2021: Number of Options Weighted Weighted Aggregate Outstanding at January 3, 2021 11,242 $ 16.06 Granted 1,435 23.70 Exercised (2,746) 11.38 Forfeited and/or expired (73) 21.27 Outstanding at January 2, 2022 9,858 $ 18.44 6.94 $ 55,337 Vested or expected to vest at January 2, 2022 9,727 $ 18.38 6.91 $ 53,197 Exercisable at January 2, 2022 6,514 $ 16.43 6.00 $ 48,372 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The weighted average grant date fair value of stock options was determined using the following assumptions: 2021 2020 2019 Risk-free interest rate 0.70 % 0.22 % 1.57 % Expected option life in years 4.50 4.50 4.50 Expected volatility 38.00 % 38.02 % 23.55 % Expected dividend yield 2.03 % 1.72 % 2.03 % |
Schedule of Nonvested Restricted Stock Units Activity | The following table summarizes activity of Restricted Shares during 2021: Number of Restricted Shares Weighted Non-vested at January 3, 2021 1,089 $ 19.01 Granted 365 23.27 Vested (304) 18.69 Forfeited (56) 21.08 Non-vested at January 2, 2022 1,094 $ 20.09 |
Schedule of Share-based Payment Award, Performance Share Awards, Valuation Assumptions | The input variables are noted in the table below: 2021 2020 2019 Risk-free interest rate 0.20 % 1.38 % 2.51 % Expected life in years 3.00 3.00 3.00 Expected volatility 49.47 % 23.26 % 23.19 % Expected dividend yield (a) 0.00 % 0.00 % 0.00 % _______________ (a) The Monte Carlo method assumes a reinvestment of dividends. |
Schedule of Nonvested Performance-based Units Activity | The following table summarizes activity of performance shares at Target during 2021: Performance Condition Awards Market Condition Awards Shares Weighted Shares Weighted Non-vested at January 3, 2021 429 $ 19.06 346 $ 23.65 Granted 209 20.21 187 22.96 Dividend equivalent units issued (a) 10 20.48 8 24.53 Vested (b) (88) 15.65 (119) 15.65 Forfeited (55) 15.65 — — Non-vested at January 2, 2022 505 $ 20.48 422 $ 24.52 _______________ (a) Dividend equivalent units are issued in lieu of cash dividends for non-vested performance shares. There is no weighted average fair value associated with dividend equivalent units. (b) Market condition awards exclude the vesting of an additional 52 shares, which resulted from the performance of the awards exceeding Target. |
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs | Total share-based compensation and the related income tax benefit recognized in the Company’s consolidated statements of operations were as follows: Year Ended 2021 2020 2019 Stock options $ 9,256 $ 8,499 $ 7,685 Restricted shares (a) 6,677 6,507 5,762 Performance shares: Performance condition awards 2,861 782 2,195 Market condition awards 3,225 2,521 2,023 Modifications, net — 621 1,011 Share-based compensation 22,019 18,930 18,676 Less: Income tax benefit (2,790) (2,958) (2,990) Share-based compensation, net of income tax benefit $ 19,229 $ 15,972 $ 15,686 _______________ (a) 2021, 2020 and 2019 include $19, $213 and $396, respectively, related to retention awards in connection with the Company’s G&A Realignment Plan, which is included in “Reorganization and realignment costs.” See Note 5 for further information. |
Impairment of Long-Lived Asse_2
Impairment of Long-Lived Assets (Tables) | 12 Months Ended |
Jan. 02, 2022 | |
Asset Impairment Charges [Abstract] | |
Impairment of Long-Lived Assets | The following is a summary of impairment losses recorded, which represent the excess of the carrying amount over the fair value of the affected assets and are included in “Impairment of long-lived assets:” Year Ended 2021 2020 2019 Company-operated restaurants $ 1,862 $ 7,586 $ 294 Restaurants leased or subleased to franchisees 189 — 5,308 Surplus properties 200 451 1,397 $ 2,251 $ 8,037 $ 6,999 |
Investment Income, Net (Tables)
Investment Income, Net (Tables) | 12 Months Ended |
Jan. 02, 2022 | |
Investment Income, Net [Abstract] | |
Investment Income | Year Ended 2021 2020 2019 Gain on sale of investments, net (a) $ 63 $ — $ 24,496 Impairment loss on other investments in equity securities — (471) — Other, net (24) 246 1,102 $ 39 $ (225) $ 25,598 _______________ (a) In October 2019, the Company received a $25,000 cash settlement related to a previously held investment. As a result, the Company recorded $24,366 to “Investment income (loss), net” and $634 to “General and administrative” for the reimbursement of related costs. |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Jan. 02, 2022 | |
Leases [Abstract] | |
Lease, Cost | The components of lease cost for 2021, 2020 and 2019 are as follows: Year Ended 2021 2020 2019 Finance lease cost: Amortization of finance lease assets $ 13,992 $ 13,395 $ 11,241 Interest on finance lease liabilities 41,419 40,682 37,012 55,411 54,077 48,253 Operating lease cost 89,283 91,475 90,537 Variable lease cost (a) 63,853 59,076 58,978 Short-term lease cost 5,102 4,641 4,717 Total operating lease cost (b) 158,238 155,192 154,232 Total lease cost $ 213,649 $ 209,269 $ 202,485 _______________ (a) Includes expenses for executory costs of $39,646, $38,652, and $37,758 for 2021, 2020 and 2019, respectively, for which the Company is reimbursed by sublessees. (b) Includes $132,158, $125,553 and $123,899 for 2021, 2020 and 2019, respectively, recorded to “Franchise rental expense” for leased properties that are subsequently leased to franchisees. Also includes $23,558, $26,866 and $27,419 for 2021, 2020 and 2019, respectively, recorded to “Cost of sales” for leases for Company-operated restaurants. |
Schedule of Supplemental Cash Flow and Non-cash Information Related to Leases | The following table includes supplemental cash flow and non-cash information related to leases: Year Ended 2021 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from finance leases $ 42,277 $ 39,349 $ 39,887 Operating cash flows from operating leases 91,930 85,689 91,824 Financing cash flows from finance leases 13,640 8,383 6,835 Right-of-use assets obtained in exchange for lease obligations: Finance lease liabilities 82,032 34,918 50,061 Operating lease liabilities 58,770 18,327 15,411 |
Schedule of Supplemental Information Related to Leases | The following table includes supplemental information related to leases: Year End January 2, 2022 January 3, Weighted-average remaining lease term (years): Finance leases 15.8 16.2 Operating leases 14.1 14.6 Weighted average discount rate: Finance leases 8.91 % 9.54 % Operating leases 4.94 % 5.06 % Supplemental balance sheet information: Finance lease assets, gross $ 307,965 $ 261,308 Accumulated amortization (63,686) (55,155) Finance lease assets 244,279 206,153 Operating lease assets 812,620 821,480 |
Finance Lease, Liability, Maturity | The following table illustrates the Company’s future minimum rental payments for non-cancelable leases as of January 2, 2022: Finance Operating Fiscal Year Company-Operated Franchise Company-Operated Franchise 2022 $ 6,361 $ 51,720 $ 20,521 $ 69,692 2023 6,317 52,957 20,989 69,158 2024 6,410 53,383 20,956 69,133 2025 6,610 53,876 20,745 68,910 2026 6,754 55,117 21,198 68,093 Thereafter 84,693 624,335 192,250 630,404 Total minimum payments $ 117,145 $ 891,388 $ 296,659 $ 975,390 Less interest (41,554) (391,879) (82,860) (288,546) Present value of minimum lease payments (a) (b) $ 75,591 $ 499,509 $ 213,799 $ 686,844 _______________ (a) The present value of minimum finance lease payments of $15,513 and $559,587 are included in “Current portion of finance lease liabilities” and “Long-term finance lease liabilities,” respectively. (b) The present value of minimum operating lease payments of $47,315 and $853,328 are included in “Current portion of operating lease liabilities” and “Long-term operating lease liabilities,” respectively. |
Lessee, Operating Lease, Liability, Maturity | The following table illustrates the Company’s future minimum rental payments for non-cancelable leases as of January 2, 2022: Finance Operating Fiscal Year Company-Operated Franchise Company-Operated Franchise 2022 $ 6,361 $ 51,720 $ 20,521 $ 69,692 2023 6,317 52,957 20,989 69,158 2024 6,410 53,383 20,956 69,133 2025 6,610 53,876 20,745 68,910 2026 6,754 55,117 21,198 68,093 Thereafter 84,693 624,335 192,250 630,404 Total minimum payments $ 117,145 $ 891,388 $ 296,659 $ 975,390 Less interest (41,554) (391,879) (82,860) (288,546) Present value of minimum lease payments (a) (b) $ 75,591 $ 499,509 $ 213,799 $ 686,844 _______________ (a) The present value of minimum finance lease payments of $15,513 and $559,587 are included in “Current portion of finance lease liabilities” and “Long-term finance lease liabilities,” respectively. (b) The present value of minimum operating lease payments of $47,315 and $853,328 are included in “Current portion of operating lease liabilities” and “Long-term operating lease liabilities,” respectively. |
Lease, Income | The components of lease income for 2021, 2020 and 2019 are as follows: Year Ended 2021 2020 2019 Sales-type and direct-financing leases: Selling profit $ 4,244 $ 1,995 $ 2,285 Interest income (a) 30,648 29,067 26,333 Operating lease income 173,442 174,452 176,629 Variable lease income 63,213 58,196 56,436 Franchise rental income (b) $ 236,655 $ 232,648 $ 233,065 _______________ (a) Included in “Interest expense, net.” (b) Includes sublease income of $174,327, $169,921 and $171,126 recognized during 2021, 2020 and 2019, respectively. Sublease income includes lessees’ variable payments to the Company for executory costs of $39,650, $38,636 and $37,739 for 2021, 2020 and 2019, respectively. |
Sales-type and Direct Financing Leases, Lease Receivable, Maturity | The following table illustrates the Company’s future minimum rental receipts for non-cancelable leases and subleases as of January 2, 2022: Sales-Type and Operating Fiscal Year Subleases Owned Properties Subleases Owned Properties 2022 $ 33,883 $ 2,543 $ 110,714 $ 53,076 2023 34,933 2,589 111,330 53,384 2024 36,929 2,599 111,591 54,490 2025 35,803 2,717 111,102 55,086 2026 36,950 2,887 110,537 56,845 Thereafter 438,518 31,876 1,020,240 647,591 Total future minimum receipts 617,016 45,211 $ 1,575,514 $ 920,472 Unearned interest income (331,403) (24,851) Net investment in sales-type and direct financing leases (a) $ 285,613 $ 20,360 _______________ (a) The present value of minimum sales-type and direct financing rental receipts of $6,266 and $299,707 are included in “Accounts and notes receivable, net” and “Net investment in sales-type and direct financing leases,” respectively. The present value of minimum sales-type and direct financing rental receipts includes a net investment in unguaranteed residual assets of $549. |
Lessor, Operating Lease, Payments to be Received, Maturity | The following table illustrates the Company’s future minimum rental receipts for non-cancelable leases and subleases as of January 2, 2022: Sales-Type and Operating Fiscal Year Subleases Owned Properties Subleases Owned Properties 2022 $ 33,883 $ 2,543 $ 110,714 $ 53,076 2023 34,933 2,589 111,330 53,384 2024 36,929 2,599 111,591 54,490 2025 35,803 2,717 111,102 55,086 2026 36,950 2,887 110,537 56,845 Thereafter 438,518 31,876 1,020,240 647,591 Total future minimum receipts 617,016 45,211 $ 1,575,514 $ 920,472 Unearned interest income (331,403) (24,851) Net investment in sales-type and direct financing leases (a) $ 285,613 $ 20,360 _______________ (a) The present value of minimum sales-type and direct financing rental receipts of $6,266 and $299,707 are included in “Accounts and notes receivable, net” and “Net investment in sales-type and direct financing leases,” respectively. The present value of minimum sales-type and direct financing rental receipts includes a net investment in unguaranteed residual assets of $549. |
Schedule of Property Subject To Operating Lease | Properties owned by the Company and leased to franchisees and other third parties under operating leases include: Year End January 2, 2022 January 3, 2021 Land $ 258,513 $ 279,956 Buildings and improvements 288,782 309,605 Restaurant equipment 1,701 1,701 548,996 591,262 Accumulated depreciation and amortization (173,243) (170,722) $ 375,753 $ 420,540 |
Transactions with Related Par_2
Transactions with Related Parties (Tables) | 12 Months Ended |
Jan. 02, 2022 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions by Related Party | The following is a summary of transactions between the Company and its related parties: Year Ended 2021 2020 2019 Transactions with QSCC: Wendy’s Co-op (a) $ 279 $ — $ 504 Rental receipts (b) 217 217 217 TimWen lease and management fee payments (c) $ 18,687 $ 16,130 $ 16,660 Yellow Cab royalty, advertising fund, lease and other income (d) $ 9,869 $ 1,090 $ — _______________ Transactions with QSCC (a) Wendy’s has a purchasing co-op relationship structure (the “Wendy’s Co-op”) with its franchisees that establishes Quality Supply Chain Co-op, Inc. (“QSCC”). QSCC manages, for the Wendy’s system in the U.S. and Canada, contracts for the purchase and distribution of food, proprietary paper, operating supplies and equipment under national agreements with pricing based upon total system volume. QSCC’s supply chain management facilitates continuity of supply and provides consolidated purchasing efficiencies while monitoring and seeking to minimize possible obsolete inventory throughout the Wendy’s supply chain in the U.S. and Canada. Wendy’s and its franchisees pay sourcing fees to third-party vendors on certain products sourced by QSCC. Such sourcing fees are remitted by these vendors to QSCC and are the primary means of funding QSCC’s operations. Should QSCC’s sourcing fees exceed its expected needs, QSCC’s board of directors may return some or all of the excess to its members in the form of a patronage dividend. Wendy’s recorded its share of patronage dividends of $279 and $504 in 2021 and 2019, respectively, which are included as a reduction of “Cost of sales.” There were no patronage dividends recorded during 2020. (b) Pursuant to a lease agreement, Wendy’s leased 14,493 square feet of office space to QSCC for an annual base rental of $217. The lease was amended in June 2021 to increase both the leased square footage to 18,774 and the annual base rental to $250, subject to annual increases, and to extend the lease term through January 31, 2027. The Company received $217 of lease payments from QSCC during each of 2021, 2020 and 2019, which has been recorded to “Franchise rental income.” TimWen Lease and Management Fee Payments (c) A wholly-owned subsidiary of Wendy’s leases restaurant facilities from TimWen, which are then subleased to franchisees for the operation of Wendy’s/Tim Hortons combo units in Canada. Wendy’s paid TimWen $18,906, $16,339 and $16,867 under these lease agreements during 2021, 2020 and 2019, respectively. In addition, TimWen paid Wendy’s a management fee under the TimWen joint venture agreement of $219, $209 and $207 during 2021, 2020 and 2019, respectively, which has been included as a reduction to “General and administrative.” Transactions with Yellow Cab (d) Certain family members and affiliates of Mr. Nelson Peltz, our Chairman, and Mr. Peter May, our Senior Vice Chairman, as well as Mr. Matthew Peltz, our Vice Chairman, hold indirect, minority ownership interests in operating companies managed by Yellow Cab Holdings, LLC (“Yellow Cab”), a Wendy’s franchisee, that as of January 2, 2022 owned and operated 84 Wendy’s restaurants (including 54 restaurants acquired from NPC during the first quarter of 2021 as described below). During 2021 and the fourth quarter of 2020, the Company recognized $9,869 and $1,090, respectively, in royalty, advertising fund, lease and other income from Yellow Cab and related entities. As of January 2, 2022, $974 was due from Yellow Cab for such income, which is included in “Accounts and notes receivable, net” and “Advertising funds restricted assets.” In November 2020, the Company submitted a consortium bid together with a group of pre-qualified franchisees (of which Yellow Cab was a member) to acquire the Wendy’s restaurants owned by NPC, formerly the Company’s largest franchisee, which filed for chapter 11 bankruptcy in July 2020. As part of the consortium bid, in November 2020, the Company received deposits from each of the pre-qualified franchisees (including Yellow Cab), which amounts were transferred to a third-party escrow account pending resolution of the bankruptcy sale process. On January 7, 2021, following a court-approved mediation process, Yellow Cab was selected as the purchaser for 54 of NPC’s Wendy’s restaurants. In March 2021, Yellow Cab closed on its acquisition of these restaurants and its deposit was applied against the purchase price for the restaurants. See Note 3 for further information. |
Advertising Costs and Funds (Ta
Advertising Costs and Funds (Tables) | 12 Months Ended |
Jan. 02, 2022 | |
Restricted Assets and Liabilities | |
Restricted Assets and Liabilities | |
Schedule of Restricted Assets and Liabilities | Restricted assets and related liabilities of the Advertising Funds at January 2, 2022 and January 3, 2021 are as follows: Year End January 2, 2022 January 3, 2021 Cash and cash equivalents $ 89,993 $ 77,279 Accounts receivable, net 65,497 63,252 Other assets 4,328 1,775 Advertising funds restricted assets $ 159,818 $ 142,306 Accounts payable $ 136,043 $ 123,064 Accrued expenses and other current liabilities 21,858 17,447 Advertising funds restricted liabilities $ 157,901 $ 140,511 |
Geographic Information (Tables)
Geographic Information (Tables) | 12 Months Ended |
Jan. 02, 2022 | |
Segments, Geographical Areas [Abstract] | |
Geographic Information | The table below presents revenues and properties information by geographic area: U.S. International Total 2021 Revenues $ 1,771,997 $ 125,001 $ 1,896,998 Properties 856,841 50,026 906,867 2020 Revenues $ 1,635,696 $ 98,129 $ 1,733,825 Properties 879,806 36,083 915,889 2019 Revenues $ 1,606,619 $ 102,383 $ 1,709,002 Properties 941,607 35,393 977,000 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Jan. 02, 2022 | |
Segment Reporting [Abstract] | |
Reconciliation of Revenue from Segments to Consolidated | Revenues by segment are as follows: Year Ended 2021 2020 2019 Wendy’s U.S. $ 1,567,496 $ 1,431,382 $ 1,404,307 Wendy’s International 86,369 65,642 68,198 Global Real Estate & Development 243,133 236,801 236,497 Total revenues $ 1,896,998 $ 1,733,825 $ 1,709,002 |
Reconciliation of Profit from Segments to Consolidated | The following table reconciles profit by segment to the Company’s consolidated income before income taxes: Year Ended 2021 2020 2019 Wendy’s U.S. (a) $ 450,117 $ 393,314 $ 369,193 Wendy’s International 27,386 20,119 20,246 Global Real Estate & Development 106,113 100,731 107,116 Total segment profit 583,616 514,164 496,555 Unallocated franchise support and other costs (753) — — Advertising funds surplus 2,770 2,904 1,337 Unallocated general and administrative (b) (116,273) (94,256) (81,230) Depreciation and amortization (125,540) (132,775) (131,693) System optimization gains, net 33,545 3,148 1,283 Reorganization and realignment costs (8,548) (16,030) (16,965) Impairment of long-lived assets (2,251) (8,037) (6,999) Unallocated other operating income, net 394 190 291 Interest expense, net (109,185) (117,737) (115,971) Loss on early extinguishment of debt (17,917) — (8,496) Investment income (loss), net 39 (225) 25,598 Other income, net 681 1,449 7,771 Income before income taxes $ 240,578 $ 152,795 $ 171,481 _______________ (a) Includes advertising funds expense of $25,000 and $14,600 for 2021 and 2020, respectively, related to the Company funding of incremental advertising to support the breakfast daypart. (b) Includes corporate overhead costs, such as employee compensation and related benefits. |
Reconciliation of Other Significant Reconciling Items from Segments to Consolidated | Net income (loss) of our equity method investments for the Brazil JV and TimWen are included in segment profit for the Wendy’s International and Global Real Estate & Development segments, respectively. Net income (loss) of equity method investments by segment was as follows: Year Ended 2021 2020 2019 Wendy’s International $ — $ (417) $ (1,022) Global Real Estate & Development 11,203 6,513 9,695 Total net income of equity method investments $ 11,203 $ 6,096 $ 8,673 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies Corporate Structure (Details) | Jan. 02, 2022number_of_restaurantscountries |
Franchisor Disclosure | |
Number of Restaurants | 6,949 |
Entity Operated Units | |
Franchisor Disclosure | |
Number of Restaurants | 408 |
Franchised Units | |
Franchisor Disclosure | |
Number of Restaurants | 6,541 |
International | |
Franchisor Disclosure | |
Number of Countries Entity Operates | countries | 31 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies Cash Equivalents (Details) $ in Thousands | Jan. 02, 2022USD ($) |
Accounting Policies [Abstract] | |
Cash Equivalents, Insurance from Securities Investor Protection Corporation, Maximum per Account | $ 500 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies Properties and Depreciation and Amortization (Details) | 12 Months Ended |
Jan. 02, 2022 | |
Office and restaurant equipment | Minimum | |
Properties | |
Property, Plant and Equipment, Useful Life | 3 years |
Office and restaurant equipment | Maximum | |
Properties | |
Property, Plant and Equipment, Useful Life | 20 years |
Transportation equipment | Minimum | |
Properties | |
Property, Plant and Equipment, Useful Life | 3 years |
Transportation equipment | Maximum | |
Properties | |
Property, Plant and Equipment, Useful Life | 15 years |
Buildings and improvements | Minimum | |
Properties | |
Property, Plant and Equipment, Useful Life | 7 years |
Buildings and improvements | Maximum | |
Properties | |
Property, Plant and Equipment, Useful Life | 30 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies Other Intangible Assets and Deferred Financing Costs (Details) | 12 Months Ended |
Jan. 02, 2022 | |
Computer software | Minimum | |
Finite-Lived Intangible Assets | |
Finite-Lived Intangible Asset, Useful Life | 1 year |
Computer software | Maximum | |
Finite-Lived Intangible Assets | |
Finite-Lived Intangible Asset, Useful Life | 5 years |
Reacquired rights under franchise agreements | Minimum | |
Finite-Lived Intangible Assets | |
Finite-Lived Intangible Asset, Useful Life | 4 years |
Reacquired rights under franchise agreements | Maximum | |
Finite-Lived Intangible Assets | |
Finite-Lived Intangible Asset, Useful Life | 20 years |
Franchise agreements | |
Finite-Lived Intangible Assets | |
Finite-Lived Intangible Asset, Useful Life | 20 years |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies Investments (Details) | Jan. 02, 2022 |
TimWen | |
Schedule of Investments | |
Equity Method Investment, Ownership Percentage | 50.00% |
Brazil JV | |
Schedule of Investments | |
Equity Method Investment, Ownership Percentage | 20.00% |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies Self-insurance (Details) $ in Thousands | Jan. 02, 2022USD ($) |
Insurance Claims | |
Loss Contingencies | |
Loss Contingency, Range of Possible Loss per Occurrence, Maximum | $ 500 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies Leases (Details) | Jan. 02, 2022 |
Minimum | |
Operating Leased Assets | |
Lessee, Operating Lease, Term of Contract | 15 years |
Maximum | |
Operating Leased Assets | |
Lessee, Operating Lease, Term of Contract | 20 years |
Summary of Significant Accou_10
Summary of Significant Accounting Policies Concentration of Risk (Details) | 12 Months Ended | ||
Jan. 02, 2022customerscountriesnumber_of_restaurantsstatesdistributors | Jan. 03, 2021customers | Dec. 29, 2019customers | |
Concentration Risk | |||
Number of Customers Accounting for More Than 10% of Revenues | customers | 0 | 0 | 0 |
Number of Restaurants | 6,949 | ||
U.S. | |||
Concentration Risk | |||
Number of Main In-line Distributors | distributors | 1 | ||
Number of Additional In-line Distributors | distributors | 4 | ||
Number of States Where Restaurants are Located | states | 50 | ||
International | |||
Concentration Risk | |||
Number of Countries Entity Operates (Including Canada) | countries | 31 | ||
Entity Operated Units | |||
Concentration Risk | |||
Number of Restaurants | 408 | ||
Entity Operated Units | Canada | |||
Concentration Risk | |||
Number of Restaurants | 0 | ||
U.S Main In-Line Distributor Risk | U.S. | Restaurants in U.S. System | |||
Concentration Risk | |||
Concentration Risk, Percentage | 67.00% | ||
U.S. Additional In-Line Distributor Risk | U.S. | Restaurants in U.S. System | |||
Concentration Risk | |||
Concentration Risk, Percentage | 32.00% | ||
Geographic Concentration Risk, Canada | Canada | Franchised Units | |||
Concentration Risk | |||
Concentration Risk, Percentage | 10.00% |
Disaggregation of Revenue (Deta
Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2022 | Jan. 03, 2021 | Dec. 29, 2019 | |
Disaggregation of Revenue | |||
Franchise agreement term | 20 years | ||
Franchise agreement renewal term | 10 years | ||
Franchise agreement extension term | 25 years | ||
Franchise agreement renewal term extension | 20 years | ||
Franchise rental income | $ 236,655 | $ 232,648 | $ 233,065 |
Total revenues | $ 1,896,998 | 1,733,825 | 1,709,002 |
Minimum | |||
Disaggregation of Revenue | |||
Lessee, Operating Lease, Term of Contract | 15 years | ||
Maximum | |||
Disaggregation of Revenue | |||
Lessee, Operating Lease, Term of Contract | 20 years | ||
Sales at Company-operated restaurants | |||
Disaggregation of Revenue | |||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 734,074 | 722,764 | 707,485 |
Franchise royalty revenue | |||
Disaggregation of Revenue | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 460,709 | 416,508 | 400,700 |
Franchise fees | |||
Disaggregation of Revenue | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 76,039 | 28,241 | 28,299 |
Advertising funds revenue | |||
Disaggregation of Revenue | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 389,521 | 333,664 | 339,453 |
Wendy's U.S. | |||
Disaggregation of Revenue | |||
Franchise rental income | 0 | 0 | 0 |
Total revenues | 1,567,496 | 1,431,382 | 1,404,307 |
Wendy's U.S. | Sales at Company-operated restaurants | |||
Disaggregation of Revenue | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 730,415 | 722,764 | 707,485 |
Wendy's U.S. | Franchise royalty revenue | |||
Disaggregation of Revenue | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 407,317 | 373,162 | 355,702 |
Wendy's U.S. | Franchise fees | |||
Disaggregation of Revenue | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 64,170 | 22,126 | 21,889 |
Wendy's U.S. | Advertising funds revenue | |||
Disaggregation of Revenue | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 365,594 | 313,330 | 319,231 |
Wendy's International | |||
Disaggregation of Revenue | |||
Franchise rental income | 0 | 0 | 0 |
Total revenues | 86,369 | 65,642 | 68,198 |
Wendy's International | Sales at Company-operated restaurants | |||
Disaggregation of Revenue | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 3,659 | 0 | 0 |
Wendy's International | Franchise royalty revenue | |||
Disaggregation of Revenue | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 53,392 | 43,346 | 44,998 |
Wendy's International | Franchise fees | |||
Disaggregation of Revenue | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 5,391 | 1,962 | 2,978 |
Wendy's International | Advertising funds revenue | |||
Disaggregation of Revenue | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 23,927 | 20,334 | 20,222 |
Global Real Estate & Development | |||
Disaggregation of Revenue | |||
Franchise rental income | 236,655 | 232,648 | 233,065 |
Total revenues | 243,133 | 236,801 | 236,497 |
Global Real Estate & Development | Sales at Company-operated restaurants | |||
Disaggregation of Revenue | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 0 | 0 | 0 |
Global Real Estate & Development | Franchise royalty revenue | |||
Disaggregation of Revenue | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 0 | 0 | 0 |
Global Real Estate & Development | Franchise fees | |||
Disaggregation of Revenue | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 6,478 | 4,153 | 3,432 |
Global Real Estate & Development | Advertising funds revenue | |||
Disaggregation of Revenue | |||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 0 | $ 0 | $ 0 |
Contract Balances (Details)
Contract Balances (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2022 | Jan. 03, 2021 | Dec. 29, 2019 | |
Contract balances | |||
Deferred franchise fees at beginning of period | $ 97,785 | $ 100,689 | $ 102,205 |
Revenue recognized during the period | (19,838) | (8,955) | (9,487) |
New deferrals due to cash received and other | 19,239 | 6,051 | 7,971 |
Deferred franchise fees at end of period | 97,186 | 97,785 | $ 100,689 |
Deferred franchise fees, current | 9,084 | 8,691 | |
Deferred franchise fees, noncurrent | 88,102 | 89,094 | |
Accounts and notes receivable, net | Short-term Contract with Customer | |||
Contract balances | |||
Receivables, Net, Current | 49,168 | 57,677 | |
Advertising funds restricted assets | Short-term Contract with Customer | |||
Contract balances | |||
Receivables, Net, Current | $ 65,497 | $ 63,252 |
Remaining Performance Obligatio
Remaining Performance Obligation (Details) $ in Thousands | Jan. 02, 2022USD ($) |
Revenue, Remaining Performance Obligation | |
Revenue, Remaining Performance Obligation, Amount | $ 97,186 |
2022 | |
Revenue, Remaining Performance Obligation | |
Revenue, Remaining Performance Obligation, Amount | 9,084 |
2023 | |
Revenue, Remaining Performance Obligation | |
Revenue, Remaining Performance Obligation, Amount | 6,284 |
2024 | |
Revenue, Remaining Performance Obligation | |
Revenue, Remaining Performance Obligation, Amount | 6,096 |
2025 | |
Revenue, Remaining Performance Obligation | |
Revenue, Remaining Performance Obligation, Amount | 5,911 |
2026 | |
Revenue, Remaining Performance Obligation | |
Revenue, Remaining Performance Obligation, Amount | 5,795 |
Thereafter | |
Revenue, Remaining Performance Obligation | |
Revenue, Remaining Performance Obligation, Amount | $ 64,016 |
Acquisitions (Details)
Acquisitions (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Apr. 04, 2021USD ($)numberOfMarkets | Jan. 02, 2022USD ($)number_of_restaurants | Jan. 03, 2021USD ($)number_of_restaurants | Dec. 29, 2019USD ($)number_of_restaurants | Nov. 18, 2020numberOfMarkets | Jul. 31, 2020numberOfMarketsnumber_of_restaurants | |
Business Acquisition | ||||||
Number of Restaurants | number_of_restaurants | 6,949 | |||||
Goodwill | $ 775,278 | $ 751,049 | $ 755,911 | |||
Number of markets to be sold by NPC | numberOfMarkets | 8 | |||||
NPC consortium bid: number of markets to be purchased by franchisees | numberOfMarkets | 7 | |||||
NPC consortium bid: number of markets to be purchased by Company | numberOfMarkets | 1 | |||||
NPC Consortium bid deposit | 43,240 | |||||
NPC Consortium bid payable | 0 | 38,361 | ||||
NPC asset purchase agreement: number of markets to be purchased by FRG | numberOfMarkets | 4 | |||||
NPC asset purchase agreement: number of markets to be purchased by franchisees | numberOfMarkets | 4 | |||||
Acquisitions | $ 123,069 | $ 4,879 | $ 5,052 | |||
Acquisitions | ||||||
Business Acquisition | ||||||
Restaurants acquired from franchisees | number_of_restaurants | 93 | 0 | 5 | |||
Total consideration paid, net of cash received | $ 127,948 | $ 5,052 | ||||
Properties | 21,984 | 666 | ||||
Acquired franchise rights | 81,239 | 1,354 | ||||
Other | (9) | (2,316) | ||||
Total identifiable net assets | 104,506 | 970 | ||||
Goodwill | 23,442 | 4,082 | ||||
Finance lease assets | Acquisitions | ||||||
Business Acquisition | ||||||
Lease assets | 25,547 | 5,350 | ||||
Operating lease assets | Acquisitions | ||||||
Business Acquisition | ||||||
Lease assets | 44,282 | 0 | ||||
Finance lease liabilities | Acquisitions | ||||||
Business Acquisition | ||||||
Lease liabilities | (25,059) | (4,084) | ||||
Operating lease liabilities | Acquisitions | ||||||
Business Acquisition | ||||||
Lease liabilities | $ (43,478) | $ 0 | ||||
Settlement of NPC-related deposits | ||||||
Business Acquisition | ||||||
Acquisitions | $ (4,879) | |||||
Restaurants under construction | Acquisitions | ||||||
Business Acquisition | ||||||
Restaurants acquired from franchisees | number_of_restaurants | 2 | |||||
NPC franchised restaurants | ||||||
Business Acquisition | ||||||
Number of Restaurants | number_of_restaurants | 393 |
System Optimization Gains, Ne_2
System Optimization Gains, Net Summary of Disposition Activity (Details) $ in Thousands | 12 Months Ended | |||
Jan. 02, 2022USD ($)number_of_restaurants | Jan. 03, 2021USD ($)number_of_restaurants | Dec. 29, 2019USD ($)number_of_restaurants | Jan. 01, 2017 | |
System optimization gains, net | ||||
Company-operated restaurant ownership percentage | 5.00% | |||
Proceeds from sales of restaurants | $ 55,118 | $ 6,091 | $ 3,448 | |
Gain on sales-type leases | 4,244 | 1,995 | 2,285 | |
System optimization gains, net | $ 33,545 | $ 3,148 | $ 1,283 | |
Sale of franchise-operated restaurants to franchisees | ||||
System optimization gains, net | ||||
Number of restaurants sold to franchisees | number_of_restaurants | 34 | 54 | 37 | |
Sale of company-operated restaurants to franchisees | ||||
System optimization gains, net | ||||
Number of restaurants sold to franchisees | number_of_restaurants | 47 | 1 | 0 | |
Proceeds from sales of restaurants | $ 50,518 | $ 50 | $ 0 | |
Net assets sold | (16,939) | (34) | 0 | |
Goodwill related to sales of restaurants | (4,847) | 0 | 0 | |
Net unfavorable leases | (2,939) | 0 | 0 | |
Gain on sales-type leases | 7,156 | 0 | 0 | |
Other | (2,148) | 0 | 0 | |
Gain on sales of restaurants, net, before post-closing adjustments | 30,801 | 16 | 0 | |
Post-closing adjustments on sales of restaurants | 1,218 | 362 | 1,087 | |
System optimization gains, net | 32,019 | 378 | 1,087 | |
Favorable lease | 3,799 | |||
Unfavorable lease | 6,738 | |||
Deferred gain on sale of property | 3,500 | |||
Recognition of deferred gain on sale of property | 515 | 368 | 911 | |
Sale of other assets | ||||
System optimization gains, net | ||||
Proceeds from sales of restaurants | 4,561 | 6,041 | 3,448 | |
System optimization gains, net | 1,526 | $ 2,770 | $ 196 | |
Sale of manhattan company-operated restaurants to franchisees note receivable | ||||
System optimization gains, net | ||||
Proceeds from sales of restaurants | 39 | |||
Sale of manhattan company-operated restaurants to franchisees | ||||
System optimization gains, net | ||||
Gain on sales-type leases | 1,625 | |||
Write-off of lease assets | $ 927 |
System Optimization Gains, Ne_3
System Optimization Gains, Net Assets Held for Sale (Details) $ in Thousands | Jan. 02, 2022USD ($)number_of_restaurants | Apr. 04, 2021number_of_restaurants | Jan. 03, 2021USD ($)number_of_restaurants |
Long lived assets held for sale | |||
Number of restaurants classified as held for sale | number_of_restaurants | 0 | 43 | |
Number of Manhattan restaurants classified as held for sale | number_of_restaurants | 4 | 4 | |
Net restaurant assets held for sale | |||
Long lived assets held for sale | |||
Assets held for sale | $ | $ 0 | $ 20,587 | |
Other assets held for sale | |||
Long lived assets held for sale | |||
Assets held for sale | $ | $ 3,541 | $ 1,732 |
Reorganization and Realignmen_3
Reorganization and Realignment Costs Summary (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2022 | Jan. 03, 2021 | Dec. 29, 2019 | |
Restructuring Cost and Reserve | |||
Reorganization and realignment costs | $ 8,548 | $ 16,030 | $ 16,965 |
Operations and Field Realignment | |||
Restructuring Cost and Reserve | |||
Reorganization and realignment costs | 1,758 | 3,801 | 0 |
IT Realignment | |||
Restructuring Cost and Reserve | |||
Reorganization and realignment costs | (10) | 7,288 | 9,127 |
G&A Realignment | |||
Restructuring Cost and Reserve | |||
Reorganization and realignment costs | (52) | 614 | 7,749 |
System Optimization Initiative | |||
Restructuring Cost and Reserve | |||
Reorganization and realignment costs | $ 6,852 | $ 4,327 | $ 89 |
Reorganization and Realignmen_4
Reorganization and Realignment Costs Operations and Field Realignment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2022 | Jan. 03, 2021 | Dec. 29, 2019 | |
Restructuring Cost and Reserve | |||
Reorganization and realignment costs | $ 8,548 | $ 16,030 | $ 16,965 |
Operations and Field Realignment | |||
Restructuring Cost and Reserve | |||
Reorganization and realignment costs | 1,758 | 3,801 | $ 0 |
Restructuring and Related Cost, Incurred Cost | 1,758 | 3,180 | |
Restructuring and Related Cost, Cost Incurred to Date | 4,938 | ||
Restructuring Charges, Incurred to Date | 5,559 | ||
Operations and Field Realignment | Severance and related employee costs | |||
Restructuring Cost and Reserve | |||
Restructuring and Related Cost, Incurred Cost | 270 | 3,113 | |
Restructuring and Related Cost, Cost Incurred to Date | 3,383 | ||
Operations and Field Realignment | Third-party and other costs | |||
Restructuring Cost and Reserve | |||
Restructuring and Related Cost, Incurred Cost | 1,488 | 67 | |
Restructuring and Related Cost, Cost Incurred to Date | 1,555 | ||
Operations and Field Realignment | Share-based compensation | |||
Restructuring Cost and Reserve | |||
Restructuring and Related Cost, Incurred Cost | 0 | $ 621 | |
Restructuring and Related Cost, Cost Incurred to Date | $ 621 |
Reorganization and Realignmen_5
Reorganization and Realignment Costs Operations and Field Realignment Accrual Rollforward (Details) - Operations and Field Realignment - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 02, 2022 | Jan. 03, 2021 | |
Restructuring Cost and Reserve | ||
Beginning balance | $ 2,600 | $ 0 |
Charges | 1,758 | 3,180 |
Payments | (4,192) | (580) |
Ending balance | 166 | 2,600 |
Severance and related employee costs | ||
Restructuring Cost and Reserve | ||
Beginning balance | 2,600 | 0 |
Charges | 270 | 3,113 |
Payments | (2,715) | (513) |
Ending balance | 155 | 2,600 |
Third-party and other costs | ||
Restructuring Cost and Reserve | ||
Beginning balance | 0 | 0 |
Charges | 1,488 | 67 |
Payments | (1,477) | (67) |
Ending balance | 11 | 0 |
Accrued expenses and other current liabilities | ||
Restructuring Cost and Reserve | ||
Beginning balance | 2,487 | |
Ending balance | 2,487 | |
Other liabilities | ||
Restructuring Cost and Reserve | ||
Beginning balance | $ 113 | |
Ending balance | $ 113 |
Reorganization and Realignmen_6
Reorganization and Realignment Costs IT Realignment Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2022 | Jan. 03, 2021 | Dec. 29, 2019 | |
Restructuring Cost and Reserve | |||
Reorganization and realignment costs | $ 8,548 | $ 16,030 | $ 16,965 |
IT Realignment | |||
Restructuring Cost and Reserve | |||
Reorganization and realignment costs | (10) | 7,288 | 9,127 |
Restructuring and Related Cost, Incurred Cost | (10) | 7,288 | 8,934 |
Restructuring and Related Cost, Cost Incurred to Date | 16,212 | ||
Restructuring Charges, Incurred to Date | 16,405 | ||
IT Realignment | Severance and related employee costs | |||
Restructuring Cost and Reserve | |||
Restructuring and Related Cost, Incurred Cost | (165) | 843 | 7,548 |
Restructuring and Related Cost, Cost Incurred to Date | 8,226 | ||
IT Realignment | Recruitment and relocation costs | |||
Restructuring Cost and Reserve | |||
Restructuring and Related Cost, Incurred Cost | 146 | 1,296 | 0 |
Restructuring and Related Cost, Cost Incurred to Date | 1,442 | ||
IT Realignment | Third-party and other costs | |||
Restructuring Cost and Reserve | |||
Restructuring and Related Cost, Incurred Cost | 9 | 5,149 | 1,386 |
Restructuring and Related Cost, Cost Incurred to Date | 6,544 | ||
IT Realignment | Share-based compensation | |||
Restructuring Cost and Reserve | |||
Restructuring and Related Cost, Incurred Cost | 0 | $ 0 | $ 193 |
Restructuring and Related Cost, Cost Incurred to Date | $ 193 |
Reorganization and Realignmen_7
Reorganization and Realignment Costs IT Realignment Accrual Rollforward (Details) - IT Realignment - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2022 | Jan. 03, 2021 | Dec. 29, 2019 | |
Restructuring Cost and Reserve | |||
Beginning balance | $ 1,508 | $ 8,624 | |
Charges | (10) | 7,288 | $ 8,934 |
Payments | (1,405) | (14,404) | |
Ending balance | 93 | 1,508 | 8,624 |
Severance and related employee costs | |||
Restructuring Cost and Reserve | |||
Beginning balance | 1,508 | 7,548 | |
Charges | (165) | 843 | 7,548 |
Payments | (1,250) | (6,883) | |
Ending balance | 93 | 1,508 | 7,548 |
Recruitment and relocation costs | |||
Restructuring Cost and Reserve | |||
Beginning balance | 0 | 0 | |
Charges | 146 | 1,296 | 0 |
Payments | (146) | (1,296) | |
Ending balance | 0 | 0 | 0 |
Third-party and other costs | |||
Restructuring Cost and Reserve | |||
Beginning balance | 0 | 1,076 | |
Charges | 9 | 5,149 | 1,386 |
Payments | (9) | (6,225) | |
Ending balance | $ 0 | $ 0 | $ 1,076 |
Reorganization and Realignmen_8
Reorganization and Realignment Costs G&A Realignment Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2022 | Jan. 03, 2021 | Dec. 29, 2019 | |
Restructuring Cost and Reserve | |||
Reorganization and realignment costs | $ 8,548 | $ 16,030 | $ 16,965 |
G&A Realignment | |||
Restructuring Cost and Reserve | |||
Reorganization and realignment costs | (52) | 614 | 7,749 |
Restructuring and Related Cost, Incurred Cost | (71) | 401 | 6,535 |
Restructuring and Related Cost, Cost Incurred to Date | 29,294 | ||
Restructuring Charges, Incurred to Date | 38,759 | ||
G&A Realignment | Severance and related employee costs | |||
Restructuring Cost and Reserve | |||
Restructuring and Related Cost, Incurred Cost | (74) | 28 | 5,485 |
Restructuring and Related Cost, Cost Incurred to Date | 24,192 | ||
G&A Realignment | Recruitment and relocation costs | |||
Restructuring Cost and Reserve | |||
Restructuring and Related Cost, Incurred Cost | 1 | 360 | 950 |
Restructuring and Related Cost, Cost Incurred to Date | 2,877 | ||
G&A Realignment | Third-party and other costs | |||
Restructuring Cost and Reserve | |||
Restructuring and Related Cost, Incurred Cost | 2 | 13 | 100 |
Restructuring and Related Cost, Cost Incurred to Date | 2,225 | ||
G&A Realignment | Share-based compensation | |||
Restructuring Cost and Reserve | |||
Restructuring and Related Cost, Incurred Cost | 19 | 213 | 1,214 |
Restructuring and Related Cost, Cost Incurred to Date | 8,130 | ||
G&A Realignment | Termination of defined benefit plans | |||
Restructuring Cost and Reserve | |||
Restructuring and Related Cost, Incurred Cost | 0 | $ 0 | $ 0 |
Restructuring and Related Cost, Cost Incurred to Date | $ 1,335 |
Reorganization and Realignmen_9
Reorganization and Realignment Costs G&A Realignment Accrual Rollforward (Details) - G&A Realignment - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2022 | Jan. 03, 2021 | Dec. 29, 2019 | |
Restructuring Cost and Reserve | |||
Beginning balance | $ 932 | $ 5,359 | |
Charges | (71) | 401 | $ 6,535 |
Payments | (850) | (4,828) | |
Ending balance | 11 | 932 | 5,359 |
Severance and related employee costs | |||
Restructuring Cost and Reserve | |||
Beginning balance | 932 | 5,276 | |
Charges | (74) | 28 | 5,485 |
Payments | (847) | (4,372) | |
Ending balance | 11 | 932 | 5,276 |
Recruitment and relocation costs | |||
Restructuring Cost and Reserve | |||
Beginning balance | 0 | 83 | |
Charges | 1 | 360 | 950 |
Payments | (1) | (443) | |
Ending balance | 0 | 0 | 83 |
Third-party and other costs | |||
Restructuring Cost and Reserve | |||
Beginning balance | 0 | 0 | |
Charges | 2 | 13 | 100 |
Payments | (2) | (13) | |
Ending balance | $ 0 | $ 0 | $ 0 |
Reorganization and Realignme_10
Reorganization and Realignment Costs System Optimization Costs (Details) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2022USD ($)number_of_restaurants | Jan. 03, 2021USD ($)number_of_restaurants | Dec. 29, 2019USD ($)number_of_restaurants | |
Restructuring Cost and Reserve | |||
Reorganization and realignment costs | $ 8,548 | $ 16,030 | $ 16,965 |
Acquisitions | |||
Restructuring Cost and Reserve | |||
Restaurants acquired from franchisees | number_of_restaurants | 93 | 0 | 5 |
System Optimization Initiative | |||
Restructuring Cost and Reserve | |||
Reorganization and realignment costs | $ 6,852 | $ 4,327 | $ 89 |
Restructuring and Related Cost, Expected Benefit Remaining | 800 | ||
Restructuring and Related Cost, Incurred Cost | 3,996 | 4,327 | 89 |
Restructuring and Related Cost, Cost Incurred to Date | 50,193 | ||
Restructuring Charges, Incurred to Date | 83,460 | ||
System Optimization Initiative | Severance and related employee costs | |||
Restructuring Cost and Reserve | |||
Restructuring and Related Cost, Incurred Cost | 661 | 0 | 0 |
Restructuring and Related Cost, Cost Incurred to Date | 18,898 | ||
System Optimization Initiative | Professional fees | |||
Restructuring Cost and Reserve | |||
Restructuring and Related Cost, Incurred Cost | 1,570 | 4,323 | 72 |
Restructuring and Related Cost, Cost Incurred to Date | 23,677 | ||
System Optimization Initiative | Other | |||
Restructuring Cost and Reserve | |||
Restructuring and Related Cost, Incurred Cost | 1,765 | 4 | 17 |
Restructuring and Related Cost, Cost Incurred to Date | 7,618 | ||
System Optimization Initiative | Other | NPC Transaction Fees | |||
Restructuring Cost and Reserve | |||
Restructuring and Related Cost, Incurred Cost | 1,350 | ||
System Optimization Initiative | Accelerated depreciation and amortization | |||
Restructuring Cost and Reserve | |||
Restructuring and Related Cost, Incurred Cost | 0 | 0 | 0 |
Restructuring and Related Cost, Cost Incurred to Date | 25,398 | ||
System Optimization Initiative | NPC lease termination costs | |||
Restructuring Cost and Reserve | |||
Restructuring and Related Cost, Incurred Cost | 2,856 | 0 | 0 |
Restructuring and Related Cost, Cost Incurred to Date | 2,856 | ||
System Optimization Initiative | NPC lease termination costs | Write-Off of Lease Assets | |||
Restructuring Cost and Reserve | |||
Restructuring and Related Cost, Incurred Cost | 1,376 | ||
System Optimization Initiative | NPC lease termination costs | Lease Termination Fees | |||
Restructuring Cost and Reserve | |||
Restructuring and Related Cost, Incurred Cost | 1,480 | ||
System Optimization Initiative | Share-based compensation | |||
Restructuring Cost and Reserve | |||
Restructuring and Related Cost, Incurred Cost | 0 | $ 0 | $ 0 |
Restructuring and Related Cost, Cost Incurred to Date | $ 5,013 |
Reorganization and Realignme_11
Reorganization and Realignment Costs System Optimization Accrual Rollforward (Details) - System Optimization Initiative - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2022 | Jan. 03, 2021 | Dec. 29, 2019 | |
Restructuring Cost and Reserve | |||
Beginning balance | $ 1,230 | $ 0 | |
Charges | 3,996 | 4,327 | $ 89 |
Payments | (5,226) | (3,097) | |
Ending balance | 0 | 1,230 | 0 |
Severance and related employee costs | |||
Restructuring Cost and Reserve | |||
Beginning balance | 0 | ||
Charges | 661 | 0 | 0 |
Payments | (661) | ||
Ending balance | 0 | 0 | |
Professional fees | |||
Restructuring Cost and Reserve | |||
Beginning balance | 1,230 | 0 | |
Charges | 1,570 | 4,323 | 72 |
Payments | (2,800) | (3,093) | |
Ending balance | 0 | 1,230 | 0 |
Other | |||
Restructuring Cost and Reserve | |||
Beginning balance | 0 | 0 | |
Charges | 1,765 | 4 | 17 |
Payments | (1,765) | (4) | |
Ending balance | $ 0 | $ 0 | $ 0 |
Net Income Per Share (Details)
Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Jan. 02, 2022 | Jan. 03, 2021 | Dec. 29, 2019 | |
Earnings Per Share [Abstract] | |||
Net income | $ 200,392 | $ 117,832 | $ 136,940 |
Weighted average basic shares outstanding | 221,375 | 223,684 | 229,944 |
Dilutive effect of stock options and restricted shares | 3,030 | 4,330 | 5,131 |
Weighted average diluted shares outstanding | 224,405 | 228,014 | 235,075 |
Earnings Per Share, Basic | $ 0.91 | $ 0.53 | $ 0.60 |
Earnings Per Share, Diluted | $ 0.89 | $ 0.52 | $ 0.58 |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 2,404 | 2,064 | 2,518 |
Cash and Receivables Cash and C
Cash and Receivables Cash and Cash Equivalents (Details) - USD ($) $ in Thousands | Jan. 02, 2022 | Jan. 03, 2021 | Dec. 29, 2019 | Dec. 30, 2018 |
Cash and Cash Equivalents | ||||
Cash | $ 249,438 | $ 231,922 | ||
Cash equivalents | 0 | 75,067 | ||
Cash and cash equivalents | 249,438 | 306,989 | $ 300,195 | |
Restricted cash and cash equivalents, current | 27,535 | 33,973 | 34,539 | |
Total restricted cash and cash equivalents, current | 117,528 | 111,252 | ||
Total cash, cash equivalents and restricted cash | 366,966 | 418,241 | $ 358,707 | $ 486,512 |
Restricted Cash | ||||
Cash and Cash Equivalents | ||||
Restricted cash and cash equivalents, current | 27,535 | 33,973 | ||
Restricted Cash | Accounts held by trustee for the securitized financing facility | ||||
Cash and Cash Equivalents | ||||
Restricted cash and cash equivalents, current | 27,188 | 33,635 | ||
Restricted Cash | Other | ||||
Cash and Cash Equivalents | ||||
Restricted cash and cash equivalents, current | 347 | 338 | ||
Advertising funds restricted assets | ||||
Cash and Cash Equivalents | ||||
Restricted cash and cash equivalents, current | $ 89,993 | $ 77,279 |
Cash and Receivables Accounts a
Cash and Receivables Accounts and Notes Receivable (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2022 | Jan. 03, 2021 | Dec. 29, 2019 | |
Accounts, Notes, Loans and Financing Receivable | |||
Accounts receivable, gross, current | $ 104,744 | $ 97,399 | |
Accounts receivable, allowance for doubtful accounts, current | (3,229) | (3,739) | |
Accounts receivable, net current | 101,515 | 93,660 | |
Notes receivable from franchisees, gross, current | 23,000 | 21,227 | |
Notes receivable from franchisees, allowance for doubtful accounts, current | (4,975) | (4,996) | |
Notes receivable from franchisees, net, current | 18,025 | 16,231 | |
Accounts and notes receivables, gross, current | 127,744 | 118,626 | |
Accounts and notes receivable, allowance for doubtful accounts, current | (8,204) | (8,735) | |
Accounts and notes receivable, net, current | 119,540 | 109,891 | |
Notes receivable from franchisees, gross, noncurrent | 4,514 | 6,759 | |
Notes receivable from franchisees, allowance for doubtful accounts, noncurrent | (315) | (629) | |
Notes receivable from franchisees, net, noncurrent | 4,199 | 6,130 | |
Increase (Decrease) in Accounts Receivable | 5,613 | 16,243 | $ (16,935) |
Rent Receivable | |||
Accounts, Notes, Loans and Financing Receivable | |||
Increase (Decrease) in Accounts Receivable | 5,226 | ||
Accounts and Notes Receivable Net | |||
Accounts, Notes, Loans and Financing Receivable | |||
Income taxes receivable | 11,901 | 5,399 | |
Sales-type and direct financing leases, lease receivable | 6,266 | 5,965 | |
India franchisee | |||
Accounts, Notes, Loans and Financing Receivable | |||
Notes receivable from franchisees, gross, current | 335 | 356 | |
Notes receivable from franchisees, gross, noncurrent | 315 | 629 | |
Notes receivable from franchisees, allowance for doubtful accounts, current and noncurrent | (650) | (985) | |
Indonesia franchisee | |||
Accounts, Notes, Loans and Financing Receivable | |||
Notes receivable from franchisees, gross, current | 1,795 | 831 | |
Notes receivable from franchisees, gross, noncurrent | 1,780 | ||
Brazil JV | |||
Accounts, Notes, Loans and Financing Receivable | |||
Notes receivable from franchisees, gross, current | 12,925 | 12,775 | |
Notes receivable from franchisees, gross, noncurrent | $ 4,200 | $ 4,350 |
Cash and Receivables Allowance
Cash and Receivables Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2022 | Jan. 03, 2021 | Dec. 29, 2019 | |
Allowance for Doubtful Accounts Receivable | |||
Balance at beginning of period; accounts receivable | $ 3,739 | $ 3,314 | $ 4,939 |
Provision for doubtful accounts; accounts receivable | (148) | 647 | (1,618) |
Uncollectible accounts written off, net of recoveries; accounts receivable | (362) | (222) | (7) |
Balance at end of period; accounts receivable | 3,229 | 3,739 | 3,314 |
Balance at beginning of period; notes receivable | 5,625 | 6,705 | 2,000 |
Provision for doubtful accounts; notes receivable | (335) | 206 | 4,912 |
Uncollectible accounts written off, net of recoveries; notes receivable | 0 | (1,286) | (207) |
Balance at end of period; notes receivable | 5,290 | 5,625 | 6,705 |
Balance at beginning of period; total | 9,364 | 10,019 | 6,939 |
Provision for doubtful accounts; total | (483) | 853 | 3,294 |
Uncollectible accounts written off, net of recoveries; total | (362) | (1,508) | (214) |
Balance at end of period; total | $ 8,519 | $ 9,364 | $ 10,019 |
Investments Carrying Value of I
Investments Carrying Value of Investments (Details) - USD ($) $ in Thousands | Jan. 02, 2022 | Jan. 03, 2021 |
Schedule of Investments | ||
Equity method investments | $ 39,870 | $ 44,574 |
Other investments in equity securities | 10,000 | 0 |
Investments | $ 49,870 | $ 44,574 |
Investments Equity Investment S
Investments Equity Investment Summary (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Jun. 28, 2015 | Jan. 02, 2022 | Jan. 03, 2021 | Dec. 29, 2019 | |
Schedule of Equity Method Investments | ||||
Equity in earnings for the period | $ 11,203 | $ 6,096 | $ 8,673 | |
Financing Receivable, before Allowance for Credit Loss, Noncurrent | 4,514 | 6,759 | ||
Financing Receivable, Allowance for Credit Loss, Current | (4,975) | (4,996) | ||
TimWen and Brazil JV | ||||
Schedule of Equity Method Investments | ||||
Equity in earnings for the period | $ 14,329 | 8,389 | 10,943 | |
TimWen | ||||
Schedule of Equity Method Investments | ||||
Equity Method Investment, Ownership Percentage | 50.00% | |||
Equity Method Investment, Difference Between Carrying Amount and Underlying Equity | $ 20,532 | 23,433 | ||
Brazil JV | ||||
Schedule of Equity Method Investments | ||||
Equity Method Investment, Ownership Percentage | 20.00% | |||
Payments to Acquire Interest in Joint Venture | $ 1 | |||
Payments to Acquire Interest in Joint Venture, Starbord | 2 | |||
Payments to Acquire Interest in Joint Venture, Infinity | $ 2 | |||
Equity Method Investment, Initial Ownership Percentage | 20.00% | |||
Equity Method Investment Ownership Percentage, Starbord | 40.00% | |||
Equity Method Investment Ownership Percentage, Infinity | 40.00% | |||
Equity in earnings for the period | $ 0 | (417) | $ (1,022) | |
Financing Receivable, before Allowance for Credit Loss, Current and Noncurrent | 17,125 | 17,125 | ||
Financing Receivable, 90 Days or More Past Due, Still Accruing | 12,775 | |||
Financing Receivable, before Allowance for Credit Loss, Noncurrent | 4,350 | |||
Financing Receivable, Allowance for Credit Loss, Current | $ (4,640) | $ (4,640) | ||
Brazil JV | Minimum | ||||
Schedule of Equity Method Investments | ||||
Interest Rate | 3.25% | |||
Brazil JV | Maximum | ||||
Schedule of Equity Method Investments | ||||
Interest Rate | 6.50% |
Investments Investment Rollforw
Investments Investment Rollforward (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2022 | Jan. 03, 2021 | Dec. 29, 2019 | |
Schedule of Equity Method Investments | |||
Balance at beginning of period | $ 44,574 | ||
Investment | 10,000 | $ 0 | $ 0 |
Equity in earnings for the period | 11,203 | 6,096 | 8,673 |
Distributions received | (16,337) | (8,376) | (13,400) |
Foreign currency translation adjustment included in “Other comprehensive income, net” | 1,441 | 4,187 | $ 7,845 |
Balance at end of period | $ 39,870 | $ 44,574 | |
TimWen | |||
Schedule of Equity Method Investments | |||
Equity Method Investment, Purchase Price Adjustment, Amortization Period | 21 years | 21 years | 21 years |
TimWen and Brazil JV | |||
Schedule of Equity Method Investments | |||
Balance at beginning of period | $ 44,574 | $ 45,310 | $ 47,021 |
Equity in earnings for the period | 14,329 | 8,389 | 10,943 |
Amortization of purchase price adjustments | (3,126) | (2,293) | (2,270) |
Equity in Earnings, Net of Amortization of Purchase Price Adjustment | 11,203 | 6,096 | 8,673 |
Distributions received | (16,337) | (8,376) | (13,400) |
Foreign currency translation adjustment included in “Other comprehensive income, net” | 430 | 1,544 | 3,016 |
Balance at end of period | $ 39,870 | $ 44,574 | $ 45,310 |
Investments Other Investments i
Investments Other Investments in Equity Securities (Details) - USD ($) $ in Thousands | Oct. 31, 2019 | Jan. 02, 2022 | Jan. 03, 2021 | Dec. 29, 2019 |
Payments for investments | $ 10,000 | $ 0 | $ 0 | |
Proceeds from sale of investments | (63) | (169) | (24,496) | |
Gain on sale of investment | 63 | $ 0 | $ 24,496 | |
Other investments in equity securities | ||||
Payments for investments | $ 10,000 | |||
Gain on sale of investment | $ 25,000 | |||
Other investments in equity securities | Investment income (loss), net | ||||
Gain on sale of investment | 24,366 | |||
Other investments in equity securities | General and administrative | ||||
Gain on sale of investment | $ 634 |
Properties (Details)
Properties (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2022 | Jan. 03, 2021 | Dec. 29, 2019 | |
Plant, Property and Equipment | |||
Property, Plant and Equipment, Gross | $ 1,580,068 | $ 1,541,752 | |
Accumulated depreciation and amortization | (673,201) | (625,863) | |
Properties | 906,867 | 915,889 | $ 977,000 |
Depreciation and amortization | 125,540 | 132,775 | 131,693 |
Land | |||
Plant, Property and Equipment | |||
Property, Plant and Equipment, Gross | 370,742 | 372,473 | |
Buildings and improvements | |||
Plant, Property and Equipment | |||
Property, Plant and Equipment, Gross | 504,462 | 504,504 | |
Leasehold improvements | |||
Plant, Property and Equipment | |||
Property, Plant and Equipment, Gross | 422,094 | 409,306 | |
Office, restaurant and transportation equipment | |||
Plant, Property and Equipment | |||
Property, Plant and Equipment, Gross | 282,770 | 255,469 | |
Property, Plant and Equipment | |||
Plant, Property and Equipment | |||
Depreciation and amortization | $ 68,298 | $ 77,656 | $ 81,219 |
Goodwill And Other Intangible_3
Goodwill And Other Intangible Assets Schedule of Goodwill and Other Intangibles (Details) $ in Thousands | 12 Months Ended | |||
Jan. 02, 2022USD ($)number_of_restaurants | Jan. 03, 2021USD ($)number_of_restaurants | Apr. 04, 2021number_of_restaurants | Dec. 29, 2019USD ($) | |
Goodwill | ||||
Goodwill, gross | $ 784,675 | $ 760,446 | $ 765,308 | |
Accumulated impairment losses | (9,397) | (9,397) | (9,397) | |
Goodwill, net | 775,278 | 751,049 | 755,911 | |
Restaurant acquisitions | 23,442 | |||
Restaurant dispositions | (5,394) | |||
Restaurant dispositions | 547 | |||
Currency translation adjustment and other | $ 240 | $ 532 | ||
Number of restaurants classified as held for sale | number_of_restaurants | 0 | 43 | ||
Goodwill reclassified to assets held for sale | $ 21 | $ 5,394 | ||
Number of Manhattan restaurants classified as held for sale | number_of_restaurants | 4 | 4 | ||
Goodwill reclassified from assets held for sale | $ 568 | |||
Wendy's U.S. | ||||
Goodwill | ||||
Goodwill, gross | 620,863 | 596,874 | 602,491 | |
Accumulated impairment losses | 0 | 0 | 0 | |
Goodwill, net | 620,863 | 596,874 | 602,491 | |
Restaurant acquisitions | 23,442 | |||
Restaurant dispositions | (5,394) | |||
Restaurant dispositions | 547 | |||
Currency translation adjustment and other | 0 | (223) | ||
Wendy's International | ||||
Goodwill | ||||
Goodwill, gross | 41,264 | 41,024 | 40,269 | |
Accumulated impairment losses | (9,397) | (9,397) | (9,397) | |
Goodwill, net | 31,867 | 31,627 | 30,872 | |
Restaurant acquisitions | 0 | |||
Restaurant dispositions | 0 | |||
Restaurant dispositions | 0 | |||
Currency translation adjustment and other | 240 | 755 | ||
Global Real Estate & Development | ||||
Goodwill | ||||
Goodwill, gross | 122,548 | 122,548 | 122,548 | |
Accumulated impairment losses | 0 | 0 | 0 | |
Goodwill, net | 122,548 | 122,548 | $ 122,548 | |
Restaurant acquisitions | 0 | |||
Restaurant dispositions | 0 | |||
Restaurant dispositions | 0 | |||
Currency translation adjustment and other | $ 0 | $ 0 |
Goodwill And Other Intangible_4
Goodwill And Other Intangible Assets Schedule of Finite-Lived And Indefinite Lived Intangible Assets (Details) - USD ($) $ in Thousands | Jan. 02, 2022 | Jan. 03, 2021 |
Schedule of Finite Lived and Indefinite Lived Intangible Assets | ||
Indefinite Lived And Finite Lived Intangible Assets, Gross | $ 1,737,564 | $ 1,631,883 |
Finite-Lived Intangible Assets, Accumulated Amortization | (456,773) | (406,923) |
Other intangible assets | 1,280,791 | 1,224,960 |
Trademarks | ||
Schedule of Finite Lived and Indefinite Lived Intangible Assets | ||
Indefinite-lived Intangible Assets (Excluding Goodwill) | 903,000 | 903,000 |
Franchise agreements | ||
Schedule of Finite Lived and Indefinite Lived Intangible Assets | ||
Finite-Lived Intangible Assets, Gross | 349,391 | 349,255 |
Finite-Lived Intangible Assets, Accumulated Amortization | (220,663) | (203,938) |
Finite-Lived Intangible Assets, Net | 128,728 | 145,317 |
Favorable leases | ||
Schedule of Finite Lived and Indefinite Lived Intangible Assets | ||
Finite-Lived Intangible Assets, Gross | 159,488 | 163,015 |
Finite-Lived Intangible Assets, Accumulated Amortization | (62,136) | (55,581) |
Finite-Lived Intangible Assets, Net | 97,352 | 107,434 |
Reacquired rights under franchise agreements | ||
Schedule of Finite Lived and Indefinite Lived Intangible Assets | ||
Finite-Lived Intangible Assets, Gross | 91,111 | 9,872 |
Finite-Lived Intangible Assets, Accumulated Amortization | (4,732) | (3,414) |
Finite-Lived Intangible Assets, Net | 86,379 | 6,458 |
Software | ||
Schedule of Finite Lived and Indefinite Lived Intangible Assets | ||
Finite-Lived Intangible Assets, Gross | 234,574 | 206,741 |
Finite-Lived Intangible Assets, Accumulated Amortization | (169,242) | (143,990) |
Finite-Lived Intangible Assets, Net | $ 65,332 | $ 62,751 |
Goodwill And Other Intangible_5
Goodwill And Other Intangible Assets Aggregate Amortization Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2022 | Jan. 03, 2021 | Dec. 29, 2019 | |
Finite-Lived Intangible Assets | |||
Amortization of intangible assets | $ 55,236 | $ 52,588 | $ 53,182 |
Future amortization, 2022 | 53,690 | ||
Future amortization, 2023 | 49,919 | ||
Future amortization, 2024 | 45,315 | ||
Future amortization, 2025 | 38,088 | ||
Future amortization, 2026 | 32,234 | ||
Future amortization, Thereafter | $ 158,545 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Jan. 02, 2022 | Jan. 03, 2021 |
Accrued compensation and related benefits | $ 63,835 | $ 44,264 |
Accrued taxes | 28,142 | 27,162 |
NPC Consortium bid payable | 0 | 38,361 |
Other | 48,806 | 45,534 |
Accrued Liabilities, Current | $ 140,783 | $ 155,321 |
Long-Term Debt Schedule of Long
Long-Term Debt Schedule of Long Term Debt (Details) - USD ($) $ in Thousands | Jan. 02, 2022 | Jan. 03, 2021 | Dec. 29, 2019 |
Debt Instrument | |||
Unamortized debt issuance costs | $ (37,009) | $ (30,085) | |
Total debt | 2,380,666 | 2,247,125 | |
Less amounts payable within one year | (24,250) | (28,962) | |
Total long-term debt | 2,356,416 | 2,218,163 | |
Series 2021-1 Class A-2-I Notes | |||
Debt Instrument | |||
Senior Notes | $ 447,750 | ||
Debt Instrument, Interest Rate, Stated Percentage | 2.37% | ||
Series 2021-1 Class A-2-II Notes | |||
Debt Instrument | |||
Senior Notes | $ 646,750 | ||
Debt Instrument, Interest Rate, Stated Percentage | 2.775% | ||
Series 2019-1 Class A-2-I Notes | |||
Debt Instrument | |||
Senior Notes | $ 368,000 | $ 386,000 | |
Debt Instrument, Interest Rate, Stated Percentage | 3.783% | 3.783% | |
Series 2019-1 Class A-2-II Notes | |||
Debt Instrument | |||
Senior Notes | $ 414,000 | $ 434,250 | |
Debt Instrument, Interest Rate, Stated Percentage | 4.08% | 4.08% | |
Series 2018-1 Class A-2-I Notes | |||
Debt Instrument | |||
Senior Notes | $ 0 | $ 436,500 | |
Debt Instrument, Interest Rate, Stated Percentage | 3.573% | 3.573% | |
Series 2018-1 Class A-2-II Notes | |||
Debt Instrument | |||
Senior Notes | $ 456,000 | $ 460,750 | |
Debt Instrument, Interest Rate, Stated Percentage | 3.884% | 3.884% | |
Series 2015-1 Class A-2-III Notes | |||
Debt Instrument | |||
Senior Notes | $ 0 | $ 473,750 | |
Debt Instrument, Interest Rate, Stated Percentage | 4.497% | 4.497% | |
Canadian revolving credit facility | |||
Debt Instrument | |||
Line of Credit, Outstanding, Amount | $ 0 | $ 1,962 | |
7% debentures | |||
Debt Instrument | |||
7% debentures | $ 85,175 | $ 83,998 | |
Debt Instrument, Interest Rate, Stated Percentage | 7.00% | 7.00% | 7.00% |
Long-Term Debt Maturities of lo
Long-Term Debt Maturities of long-term debt (Details) $ in Thousands | Jan. 02, 2022USD ($) |
Debt Instrument | |
2022 | $ 24,250 |
2023 | 24,250 |
2024 | 24,250 |
2025 | 114,250 |
2026 | 372,250 |
Thereafter | 1,863,250 |
Total long-term debt, gross | $ 2,422,500 |
Long-Term Debt Other Long-term
Long-Term Debt Other Long-term Debt Disclosure (Details) $ in Thousands, $ in Thousands | Jul. 31, 2020USD ($) | Mar. 31, 2020USD ($) | Mar. 31, 2020CAD ($) | Jul. 04, 2021USD ($) | Apr. 04, 2021CAD ($) | Jan. 03, 2021CAD ($) | Dec. 29, 2019USD ($) | Jun. 30, 2019USD ($) | Jan. 02, 2022USD ($) | Jan. 03, 2021USD ($) | Dec. 29, 2019USD ($) | Jan. 02, 2022CAD ($) |
Debt Instrument | ||||||||||||
Letters of Credit Outstanding, Amount | $ 22,251 | |||||||||||
Restricted cash | $ 34,539 | 27,535 | $ 33,973 | $ 34,539 | ||||||||
Loss on early extinguishment of debt | 17,917 | 0 | 8,496 | |||||||||
Interest Expense | 109,185 | $ 117,737 | 115,971 | |||||||||
Series 2021-1 Class A-2-I Notes | ||||||||||||
Debt Instrument | ||||||||||||
Debt Instrument, Face Amount | $ 450,000 | |||||||||||
Debt Instrument, Interest Rate, Effective Percentage | 2.60% | 2.60% | ||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 2.37% | 2.37% | ||||||||||
Series 2021-1 Class A-2-II Notes | ||||||||||||
Debt Instrument | ||||||||||||
Debt Instrument, Face Amount | $ 650,000 | |||||||||||
Debt Instrument, Interest Rate, Effective Percentage | 2.90% | 2.90% | ||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 2.775% | 2.775% | ||||||||||
Series 2019-1 Class A-2-I Notes | ||||||||||||
Debt Instrument | ||||||||||||
Debt Instrument, Face Amount | $ 400,000 | |||||||||||
Debt Instrument, Interest Rate, Effective Percentage | 4.00% | 4.00% | ||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 3.783% | 3.783% | 3.783% | |||||||||
Series 2019-1 Class A-2-II Notes | ||||||||||||
Debt Instrument | ||||||||||||
Debt Instrument, Face Amount | $ 450,000 | |||||||||||
Debt Instrument, Interest Rate, Effective Percentage | 4.20% | 4.20% | ||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 4.08% | 4.08% | 4.08% | |||||||||
Series 2018-1 Class A-2-II Notes | ||||||||||||
Debt Instrument | ||||||||||||
Debt Instrument, Face Amount | $ 475,000 | |||||||||||
Debt Instrument, Interest Rate, Effective Percentage | 4.10% | 4.10% | ||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 3.884% | 3.884% | 3.884% | |||||||||
Series 2021-1 Class A-1 Notes | Line of Credit | ||||||||||||
Debt Instrument | ||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 300,000 | |||||||||||
Line of Credit, Outstanding, Amount | $ 0 | |||||||||||
Series 2021-1 Class A-1 Notes | Line of Credit | Minimum | ||||||||||||
Debt Instrument | ||||||||||||
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.40% | |||||||||||
Series 2021-1 Class A-1 Notes | Line of Credit | Maximum | ||||||||||||
Debt Instrument | ||||||||||||
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.75% | |||||||||||
Series 2021-1 Class A-1 Notes | Letter of Credit | ||||||||||||
Debt Instrument | ||||||||||||
Letters of Credit Outstanding, Amount | $ 21,888 | |||||||||||
Series 2019-1 Class A-1 Notes | Line of Credit | ||||||||||||
Debt Instrument | ||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | 150,000 | |||||||||||
Proceeds from Lines of Credit | $ 120,000 | |||||||||||
Repayments of Lines of Credit | $ 120,000 | |||||||||||
Series 2020-1 Class A-1 Notes | ||||||||||||
Debt Instrument | ||||||||||||
Debt Issuance Costs, Gross | $ 2,122 | |||||||||||
Series 2020-1 Class A-1 Notes | Line of Credit | ||||||||||||
Debt Instrument | ||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | 100,000 | |||||||||||
Series 2021-1 Senior Notes | ||||||||||||
Debt Instrument | ||||||||||||
Loss on early extinguishment of debt | $ 17,917 | |||||||||||
Specified make-whole payment | 9,632 | |||||||||||
Write off of Deferred Debt Issuance Cost | $ 8,285 | |||||||||||
Debt Issuance Costs, Gross | 20,873 | |||||||||||
Series 2019-1 Senior Notes | ||||||||||||
Debt Instrument | ||||||||||||
Loss on early extinguishment of debt | $ 7,150 | |||||||||||
Debt Issuance Costs, Gross | 14,008 | $ 14,008 | ||||||||||
7% debentures | ||||||||||||
Debt Instrument | ||||||||||||
Debt Instrument, Face Amount | $ 100,000 | |||||||||||
Loss on early extinguishment of debt | $ 1,346 | |||||||||||
Debt Instrument, Interest Rate, Effective Percentage | 8.60% | 8.60% | ||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 7.00% | 7.00% | 7.00% | 7.00% | 7.00% | |||||||
Debt Instrument, Repurchased Face Amount | $ 10,000 | $ 10,000 | ||||||||||
Debt Instrument, Repurchase Amount | 10,550 | 10,550 | ||||||||||
7% debentures | Premium | ||||||||||||
Debt Instrument | ||||||||||||
Debt Instrument, Repurchase Amount | 500 | 500 | ||||||||||
7% debentures | Transaction Fees | ||||||||||||
Debt Instrument | ||||||||||||
Debt Instrument, Repurchase Amount | $ 50 | 50 | ||||||||||
Restricted Cash | ||||||||||||
Debt Instrument | ||||||||||||
Restricted cash | $ 27,535 | $ 33,973 | ||||||||||
Restricted Cash | Restricted Cash Held for Principal Interest and Fees | ||||||||||||
Debt Instrument | ||||||||||||
Restricted cash | 27,188 | 33,635 | ||||||||||
Canadian Subsidiary | Line of Credit | ||||||||||||
Debt Instrument | ||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 6,000 | |||||||||||
Proceeds from Lines of Credit | $ 5,500 | |||||||||||
Repayments of Lines of Credit | $ 2,500 | $ 3,000 | ||||||||||
Line of Credit, Outstanding, Amount | $ 0 | |||||||||||
Wendy's U.S. Advertising Fund | Line of Credit | ||||||||||||
Debt Instrument | ||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | 25,000 | |||||||||||
Proceeds from Lines of Credit | 0 | 29,397 | ||||||||||
Repayments of Lines of Credit | 0 | 29,397 | ||||||||||
Line of Credit, Outstanding, Amount | $ 0 | |||||||||||
Debt Instrument, Basis Spread on Variable Rate | 2.15% | |||||||||||
Corporate Debt Securities | ||||||||||||
Debt Instrument | ||||||||||||
Interest Expense | $ 98,356 | $ 106,116 | $ 105,829 |
Long-Term Debt Assets Pledged a
Long-Term Debt Assets Pledged as Collateral (Details) $ in Thousands | Jan. 02, 2022USD ($) |
Assets Pledged as Collateral | |
Assets pledged as collateral | $ 1,189,991 |
Cash and cash equivalents | |
Assets Pledged as Collateral | |
Assets pledged as collateral | 29,201 |
Restricted cash and other assets (including long-term) | |
Assets Pledged as Collateral | |
Assets pledged as collateral | 27,193 |
Accounts and notes receivable, net | |
Assets Pledged as Collateral | |
Assets pledged as collateral | 41,964 |
Inventories | |
Assets Pledged as Collateral | |
Assets pledged as collateral | 5,180 |
Properties | |
Assets Pledged as Collateral | |
Assets pledged as collateral | 59,717 |
Other intangible assets | |
Assets Pledged as Collateral | |
Assets pledged as collateral | $ 1,026,736 |
Fair Value Measurements Financi
Fair Value Measurements Financial Instruments (Details) - USD ($) $ in Thousands | Jan. 02, 2022 | Jan. 03, 2021 | Dec. 29, 2019 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions | |||
Other investments in equity securities | $ 10,000 | $ 0 | |
Series 2021-1 Class A-2-I Notes | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | |||
Debt Instrument, Interest Rate, Stated Percentage | 2.37% | ||
Series 2021-1 Class A-2-II Notes | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | |||
Debt Instrument, Interest Rate, Stated Percentage | 2.775% | ||
Series 2019-1 Class A-2-I Notes | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | |||
Debt Instrument, Interest Rate, Stated Percentage | 3.783% | 3.783% | |
Series 2019-1 Class A-2-II Notes | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | |||
Debt Instrument, Interest Rate, Stated Percentage | 4.08% | 4.08% | |
Series 2018-1 Class A-2-I Notes | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | |||
Debt Instrument, Interest Rate, Stated Percentage | 3.573% | 3.573% | |
Series 2018-1 Class A-2-II Notes | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | |||
Debt Instrument, Interest Rate, Stated Percentage | 3.884% | 3.884% | |
Series 2015-1 Class A-2-III Notes | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | |||
Debt Instrument, Interest Rate, Stated Percentage | 4.497% | 4.497% | |
7% debentures | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | |||
Debt Instrument, Interest Rate, Stated Percentage | 7.00% | 7.00% | 7.00% |
Reported Value Measurement | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | |||
Cash equivalents | $ 0 | $ 75,067 | |
Other investments in equity securities | 10,000 | 0 | |
Reported Value Measurement | Series 2021-1 Class A-2-I Notes | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | |||
Debt instrument | 447,750 | ||
Reported Value Measurement | Series 2021-1 Class A-2-II Notes | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | |||
Debt instrument | 646,750 | ||
Reported Value Measurement | Series 2019-1 Class A-2-I Notes | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | |||
Debt instrument | 368,000 | 386,000 | |
Reported Value Measurement | Series 2019-1 Class A-2-II Notes | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | |||
Debt instrument | 414,000 | 434,250 | |
Reported Value Measurement | Series 2018-1 Class A-2-I Notes | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | |||
Debt instrument | 0 | 436,500 | |
Reported Value Measurement | Series 2018-1 Class A-2-II Notes | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | |||
Debt instrument | 456,000 | 460,750 | |
Reported Value Measurement | Series 2015-1 Class A-2-III Notes | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | |||
Debt instrument | 0 | 473,750 | |
Reported Value Measurement | Canadian revolving credit facility | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | |||
Debt instrument | 0 | 1,962 | |
Reported Value Measurement | 7% debentures | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | |||
Debt instrument | 85,175 | 83,998 | |
Estimate of Fair Value Measurement | Fair Value, Inputs, Level 1 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | |||
Cash equivalents | 0 | 75,067 | |
Estimate of Fair Value Measurement | Fair Value, Inputs, Level 2 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | |||
Other investments in equity securities | 10,000 | 0 | |
Estimate of Fair Value Measurement | Series 2021-1 Class A-2-I Notes | Fair Value, Inputs, Level 2 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | |||
Debt instrument | 439,283 | ||
Estimate of Fair Value Measurement | Series 2021-1 Class A-2-II Notes | Fair Value, Inputs, Level 2 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | |||
Debt instrument | 642,352 | ||
Estimate of Fair Value Measurement | Series 2019-1 Class A-2-I Notes | Fair Value, Inputs, Level 2 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | |||
Debt instrument | 381,579 | 409,778 | |
Estimate of Fair Value Measurement | Series 2019-1 Class A-2-II Notes | Fair Value, Inputs, Level 2 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | |||
Debt instrument | 439,792 | 469,555 | |
Estimate of Fair Value Measurement | Series 2018-1 Class A-2-I Notes | Fair Value, Inputs, Level 2 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | |||
Debt instrument | 0 | 450,381 | |
Estimate of Fair Value Measurement | Series 2018-1 Class A-2-II Notes | Fair Value, Inputs, Level 2 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | |||
Debt instrument | 473,693 | 491,021 | |
Estimate of Fair Value Measurement | Series 2015-1 Class A-2-III Notes | Fair Value, Inputs, Level 2 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | |||
Debt instrument | 0 | 481,851 | |
Estimate of Fair Value Measurement | Canadian revolving credit facility | Fair Value, Inputs, Level 2 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | |||
Debt instrument | 0 | 1,962 | |
Estimate of Fair Value Measurement | 7% debentures | Fair Value, Inputs, Level 2 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | |||
Debt instrument | $ 101,142 | $ 98,775 |
Fair Value Measurements Non-Rec
Fair Value Measurements Non-Recurring Fair Value Measurements (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2022 | Jan. 03, 2021 | Dec. 29, 2019 | |
Fair Value, Assets and Liabilities Measured on Nonrecurring Basis | |||
Held and used, Total losses | $ 2,051 | $ 7,586 | |
Held for sale, Total losses | 200 | 451 | |
Impairment of long-lived assets | 2,251 | 8,037 | $ 6,999 |
Fair Value, Measurements, Nonrecurring | |||
Fair Value, Assets and Liabilities Measured on Nonrecurring Basis | |||
Assets Held and used, Long Lived, Fair Value Disclosure | 1,618 | 2,653 | |
Assets Held for sale, Long Lived, Fair Value Disclosure | 371 | 855 | |
Total | 1,989 | 3,508 | |
Fair Value, Measurements, Nonrecurring | Fair Value, Inputs, Level 1 | |||
Fair Value, Assets and Liabilities Measured on Nonrecurring Basis | |||
Assets Held and used, Long Lived, Fair Value Disclosure | 0 | 0 | |
Assets Held for sale, Long Lived, Fair Value Disclosure | 0 | 0 | |
Total | 0 | 0 | |
Fair Value, Measurements, Nonrecurring | Fair Value, Inputs, Level 2 | |||
Fair Value, Assets and Liabilities Measured on Nonrecurring Basis | |||
Assets Held and used, Long Lived, Fair Value Disclosure | 0 | 0 | |
Assets Held for sale, Long Lived, Fair Value Disclosure | 0 | 0 | |
Total | 0 | 0 | |
Fair Value, Measurements, Nonrecurring | Fair Value, Inputs, Level 3 | |||
Fair Value, Assets and Liabilities Measured on Nonrecurring Basis | |||
Assets Held and used, Long Lived, Fair Value Disclosure | 1,618 | 2,653 | |
Assets Held for sale, Long Lived, Fair Value Disclosure | 371 | 855 | |
Total | $ 1,989 | $ 3,508 |
Income Taxes Income from Operat
Income Taxes Income from Operations before Income Tax (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2022 | Jan. 03, 2021 | Dec. 29, 2019 | |
Income before income taxes | |||
Domestic | $ 228,756 | $ 149,046 | $ 160,474 |
Foreign | 11,822 | 3,749 | 11,007 |
Income before income taxes | $ 240,578 | $ 152,795 | $ 171,481 |
Income Taxes (Provision For) Be
Income Taxes (Provision For) Benefit from Continuing Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2022 | Jan. 03, 2021 | Dec. 29, 2019 | |
Current: | |||
U.S. federal | $ (38,416) | $ (16,176) | $ (18,421) |
State | (7,039) | (3,723) | (6,093) |
Foreign | (8,512) | (4,798) | (9,190) |
Current tax provision | (53,967) | (24,697) | (33,704) |
Deferred: | |||
U.S. federal | (52) | (6,707) | 1,585 |
State | 15,993 | (3,185) | (2,449) |
Foreign | (2,160) | (374) | 27 |
Deferred tax (provision) benefit | 13,781 | (10,266) | (837) |
Income tax provision | $ (40,186) | $ (34,963) | $ (34,541) |
Income Taxes Deferred Tax Asset
Income Taxes Deferred Tax Assets (Liabilities) (Details) - USD ($) $ in Thousands | Jan. 02, 2022 | Jan. 03, 2021 |
Deferred Tax Assets | ||
Operating and finance lease liabilities | $ 368,932 | $ 365,005 |
Net operating loss and credit carryforwards | 60,620 | 62,210 |
Deferred revenue | 23,636 | 24,303 |
Unfavorable leases | 19,060 | 23,511 |
Accrued compensation and related benefits | 18,487 | 16,443 |
Accrued expenses and reserves | 6,763 | 7,673 |
Other | 7,586 | 5,869 |
Valuation allowances | (38,277) | (49,968) |
Total deferred tax assets | 466,807 | 455,046 |
Deferred Tax Liabilities | ||
Operating and finance lease assets | (341,681) | (332,515) |
Intangible assets | (290,088) | (301,969) |
Fixed assets | (63,936) | (63,826) |
Other | (38,812) | (37,491) |
Total deferred tax liabilities | (734,517) | (735,801) |
Total deferred tax liabilities, net | $ (267,710) | $ (280,755) |
Income Taxes Income Taxes Net O
Income Taxes Income Taxes Net Operating Losses and Tax Credits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2022 | Jan. 03, 2021 | Dec. 29, 2019 | |
Summary of Net Operating Loss and Tax Credit Carryforwards | |||
Tax Credit Carryforward, Amount | $ 20,061 | ||
Net Operating Loss Carryforwards | 1,138,566 | ||
Deferred Tax Assets, Valuation Allowance | 38,277 | $ 49,968 | |
Valuation Allowance, Deferred Tax Asset, (Decrease) Increase, Amount | (11,691) | $ 4,785 | $ 3,008 |
Domestic Tax Authority | |||
Summary of Net Operating Loss and Tax Credit Carryforwards | |||
Tax Credit Carryforward, Amount | 15,309 | ||
State and Local Jurisdiction | |||
Summary of Net Operating Loss and Tax Credit Carryforwards | |||
Tax Credit Carryforward, Amount | 593 | ||
Net Operating Loss Carryforwards | 1,131,604 | ||
Foreign Tax Authority | |||
Summary of Net Operating Loss and Tax Credit Carryforwards | |||
Tax Credit Carryforward, Amount | 4,159 | ||
Net Operating Loss Carryforwards | 6,962 | ||
Change in State Tax Law | |||
Summary of Net Operating Loss and Tax Credit Carryforwards | |||
Valuation Allowance, Deferred Tax Asset, (Decrease) Increase, Amount | $ (12,606) |
Income Taxes Refundable Income
Income Taxes Refundable Income Taxes (Details) - USD ($) $ in Thousands | Jan. 02, 2022 | Jan. 03, 2021 |
Refundable Income Taxes | ||
Income Taxes Receivable, Current | $ 11,901 | $ 5,399 |
Income Taxes Receivable, Noncurrent | $ 0 | $ 0 |
Income Taxes Income Taxes Effec
Income Taxes Income Taxes Effective Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2022 | Jan. 03, 2021 | Dec. 29, 2019 | |
Effective Income Tax Rate Reconciliation | |||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 21.00% | 21.00% |
Income tax provision at the U.S. federal statutory rate | $ (50,521) | $ (32,087) | $ (36,011) |
State income tax provision, net of U.S. federal income tax effect | (6,256) | (4,664) | (6,470) |
Prior years' tax matters | 1,820 | 1,761 | 6,135 |
Excess federal tax benefits from share-based compensation | 7,160 | 5,338 | 5,841 |
Foreign and U.S. tax effects of foreign operations | (5) | (397) | 250 |
Valuation allowances | 11,807 | (4,593) | (2,833) |
Non-deductible goodwill | (947) | 0 | 0 |
Tax credits | 1,028 | 1,901 | 879 |
Non-deductible executive compensation | (3,810) | (1,973) | (1,925) |
Unrepatriated earnings | (282) | (283) | (402) |
Non-deductible expenses and other | (180) | 34 | (5) |
Income tax provision | (40,186) | (34,963) | (34,541) |
Valuation Allowance, Deferred Tax Asset, (Decrease) Increase, Amount | (11,691) | 4,785 | 3,008 |
Deferred State and Local Income Tax Expense (Benefit) | (15,993) | $ 3,185 | $ 2,449 |
Change in State Tax Law | |||
Effective Income Tax Rate Reconciliation | |||
Income tax provision | 11,766 | ||
Valuation Allowance, Deferred Tax Asset, (Decrease) Increase, Amount | (12,606) | ||
Deferred State and Local Income Tax Expense (Benefit) | $ 840 |
Income Taxes Unrecognized Tax B
Income Taxes Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2022 | Jan. 03, 2021 | Dec. 29, 2019 | |
Income Tax Contingency | |||
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns | $ 14,890 | ||
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns | |||
Unrecognized Tax Benefits, Beginning Balance | 20,973 | $ 22,323 | $ 27,632 |
Tax positions of current year, additions | 157 | 322 | 1,356 |
Tax positions of prior years, additions | 0 | 0 | 0 |
Tax positions of prior years, reductions | (2,015) | (1,183) | (227) |
Settlements, reductions | (46) | (119) | 0 |
Lapse of statute of limitations, reductions | (220) | (370) | (6,438) |
Unrecognized Tax Benefits, Ending Balance | 18,849 | 20,973 | 22,323 |
Significant Change in Unrecognized Tax Benefits is Reasonably Possible, Estimated Range of Change, Upper Bound | 98 | ||
Unrecognized Tax Benefits, Interest on Income Taxes Expense | 138 | 159 | (489) |
Unrecognized Tax Benefits, Income Tax Penalties Income | 37 | 81 | $ 81 |
Unrecognized Tax Benefits, Interest on Income Taxes Accrued | 975 | 873 | |
Unrecognized Tax Benefits, Income Tax Penalties Accrued | $ 0 | $ 37 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | Feb. 28, 2022 | Nov. 30, 2021 | Feb. 29, 2020 | Nov. 30, 2019 | Mar. 06, 2022 | Feb. 29, 2020 | Jan. 02, 2022 | Jan. 03, 2021 | Dec. 29, 2019 | Feb. 22, 2022 | Aug. 31, 2021 | May 31, 2021 | Feb. 28, 2019 | Nov. 30, 2018 |
Common Stock, Dividends, Per Share, Cash Paid | $ 0.43 | $ 0.29 | $ 0.42 | |||||||||||
Common Stock, Number of Shares Issued, beginning of year | 470,424 | 470,424 | 470,424 | |||||||||||
Common Stock, Number of Shares Issued, end of year | 470,424 | 470,424 | 470,424 | |||||||||||
Stockholders' Equity Activity | ||||||||||||||
Treasury Stock, Number of Shares at beginning of year | 246,156 | |||||||||||||
Treasury Stock, Number of Shares at end of year | 254,575 | 246,156 | ||||||||||||
Preferred Stock, Shares Authorized | 100,000 | 100,000 | 100,000 | |||||||||||
Preferred Stock, Shares Issued | 0 | 0 | 0 | |||||||||||
Common Stock Held in Treasury | ||||||||||||||
Stockholders' Equity Activity | ||||||||||||||
Treasury Stock, Number of Shares at beginning of year | 246,156 | 245,535 | 239,191 | |||||||||||
Repurchases of common stock | 11,487 | 3,512 | 10,158 | |||||||||||
Common shares issued, stock options, net | (2,657) | (2,358) | (2,912) | |||||||||||
Common shares issued, restricted stock, net | (337) | (465) | (834) | |||||||||||
Common shares issued, Director fees | (17) | (15) | (14) | |||||||||||
Common shares issued, Other | (57) | (53) | (54) | |||||||||||
Treasury Stock, Number of Shares at end of year | 254,575 | 246,156 | 245,535 | |||||||||||
February 2020 Share Repurchase Program | ||||||||||||||
Stockholders' Equity Activity | ||||||||||||||
Repurchases of common stock | 1,572 | |||||||||||||
Stock Repurchase Program, Authorized Amount | $ 100,000 | $ 100,000 | ||||||||||||
Treasury Stock, Value, Acquired, Cost Method, excluding Commissions | $ 32,285 | |||||||||||||
Stock Repurchase Program, Repurchase Accrual | 723 | |||||||||||||
Stock Repurchase Program, Cost Incurred | $ 22 | |||||||||||||
May 2021 Share Repurchase Program | ||||||||||||||
Stockholders' Equity Activity | ||||||||||||||
Stock Repurchase Program, Authorized Amount | $ 50,000 | |||||||||||||
August 2021 Share Repurchase Program | ||||||||||||||
Stockholders' Equity Activity | ||||||||||||||
Stock Repurchase Program, Authorized Amount | $ 70,000 | |||||||||||||
November 2021 Share Repurchase Program | ||||||||||||||
Stockholders' Equity Activity | ||||||||||||||
Stock Repurchase Program, Authorized Amount | $ 80,000 | |||||||||||||
February 2020, May 2021, August 2021 and November 2021 Share Repurchase Program | ||||||||||||||
Stockholders' Equity Activity | ||||||||||||||
Repurchases of common stock | 6,577 | |||||||||||||
Stock Repurchase Program, Authorized Amount | $ 300,000 | |||||||||||||
Treasury Stock, Value, Acquired, Cost Method, excluding Commissions | $ 142,715 | |||||||||||||
Stock Repurchase Program, Cost Incurred | $ 93 | |||||||||||||
2021 Accelerated Share Repurchase Program | ||||||||||||||
Stockholders' Equity Activity | ||||||||||||||
Repurchases of common stock | 4,910 | |||||||||||||
Stock Repurchase Program, Authorized Amount | $ 125,000 | |||||||||||||
Initial Shares Delivered Under ASR Agreement Percentage | 85.00% | |||||||||||||
February 2019 Share Repurchase Program | ||||||||||||||
Stockholders' Equity Activity | ||||||||||||||
Repurchases of common stock | 1,312 | |||||||||||||
Stock Repurchase Program, Authorized Amount | $ 225,000 | |||||||||||||
Treasury Stock, Value, Acquired, Cost Method, excluding Commissions | $ 28,770 | |||||||||||||
Stock Repurchase Program, Cost Incurred | $ 18 | |||||||||||||
2019 Accelerated Share Repurchase Program | ||||||||||||||
Stockholders' Equity Activity | ||||||||||||||
Repurchases of common stock | 628 | 4,051 | 4,679 | |||||||||||
Stock Repurchase Program, Authorized Amount | $ 100,000 | |||||||||||||
Initial Shares Delivered Under ASR Agreement Percentage | 85.00% | |||||||||||||
Treasury Stock Acquired, Average Cost Per Share | $ 21.37 | |||||||||||||
November 2018 and February 2019 Share Repurchase Programs | ||||||||||||||
Stockholders' Equity Activity | ||||||||||||||
Repurchases of common stock | 6,107 | |||||||||||||
Treasury Stock, Value, Acquired, Cost Method, excluding Commissions | $ 117,685 | |||||||||||||
Stock Repurchase Program, Repurchase Accrual | 1,801 | |||||||||||||
Stock Repurchase Program, Cost Incurred | $ 86 | |||||||||||||
November 2018 Share Repurchase Program | ||||||||||||||
Stockholders' Equity Activity | ||||||||||||||
Stock Repurchase Program, Authorized Amount | $ 220,000 | |||||||||||||
Subsequent Event | 2021 Accelerated Share Repurchase Program | ||||||||||||||
Stockholders' Equity Activity | ||||||||||||||
Repurchases of common stock | 715 | 5,625 | ||||||||||||
Treasury Stock Acquired, Average Cost Per Share | $ 22.22 | |||||||||||||
Subsequent Event | February 2022 Share Repurchase Program | ||||||||||||||
Stockholders' Equity Activity | ||||||||||||||
Stock Repurchase Program, Authorized Amount | $ 100,000 |
Stockholders' Equity Accumulate
Stockholders' Equity Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Jan. 02, 2022 | Jan. 03, 2021 | Dec. 29, 2019 | Dec. 30, 2018 | |
Accumulated Other Comprehensive Loss | ||||
Accumulated other comprehensive loss | $ (48,200) | $ (49,641) | $ (53,828) | $ (61,673) |
Accumulated Translation Adjustment | ||||
Accumulated Other Comprehensive Loss | ||||
Current-period other comprehensive income (loss) | $ 1,441 | $ 4,187 | $ 7,845 |
Share-Based Compensation Summar
Share-Based Compensation Summary (Details) shares in Thousands | Jan. 02, 2022shares |
2020 Plan | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 22,425 |
Share-Based Compensation Stock
Share-Based Compensation Stock Options (Details) - Stock Options - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Jan. 02, 2022 | Jan. 03, 2021 | Dec. 29, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award | |||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 10 years | ||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years | ||
Share-based Compensation, Options, Outstanding | |||
Outstanding, beginning of period | 11,242 | ||
Granted | 1,435 | ||
Exercised | (2,746) | ||
Forfeited and/or expired | (73) | ||
Outstanding, end of period | 9,858 | 11,242 | |
Vested or expected to vest, end of period | 9,727 | ||
Exercisable, end of period | 6,514 | ||
Weighted average exercise price, outstanding at beginning of period | $ 16.06 | ||
Weighted average exercise price, granted | 23.70 | ||
Weighted average exercise price, exercised | 11.38 | ||
Weighted average exercise price, forfeited and/or expired | 21.27 | ||
Weighted average exercise price, outstanding at end of period | 18.44 | $ 16.06 | |
Weighted average exercise price, vested or expected to vest | 18.38 | ||
Weighted average exercise price, exercisable | $ 16.43 | ||
Weighted average remaining contractual life in years, outstanding | 6 years 11 months 8 days | ||
Weighted average remaining contractual life in years, vested or expected to vest | 6 years 10 months 28 days | ||
Weighted average remaining contractual life in years, exercisable | 6 years | ||
Aggregate intrinsic value, outstanding | $ 55,337 | ||
Aggregate intrinsic value, vested or expected to vest | 53,197 | ||
Aggregate intrinsic value, exercisable | 48,372 | ||
Total intrinsic value, exercises in period | $ 39,522 | $ 28,111 | $ 26,947 |
Weighted average grant date fair value, granted | $ 6.33 | $ 6.02 | $ 3.40 |
Fair Value Assumptions and Methodology | |||
Risk-free interest rate | 0.70% | 0.22% | 1.57% |
Expected option life in years | 4 years 6 months | 4 years 6 months | 4 years 6 months |
Expected volatility | 38.00% | 38.02% | 23.55% |
Expected dividend yield | 2.03% | 1.72% | 2.03% |
Share-Based Compensation Restri
Share-Based Compensation Restricted Shares (Details) - Restricted Stock - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Jan. 02, 2022 | Jan. 03, 2021 | Dec. 29, 2019 | |
Share-based Compensation, Restricted Stock, Nonvested, Number of Shares | |||
Non-vested, beginning of period | 1,089 | ||
Granted | 365 | ||
Vested | (304) | ||
Forfeited | (56) | ||
Non-vested, end of period | 1,094 | 1,089 | |
Weighted average grant date fair value, non-vested, beginning of period | $ 19.01 | ||
Weighted average grant date fair value, granted | 23.27 | ||
Weighted average grant date fair value, vested | 18.69 | ||
Weighted average grant date fair value, forfeited | 21.08 | ||
Weighted average grant date fair value, non-vested, end of period | $ 20.09 | $ 19.01 | |
Total fair value, vested in period | $ 7,048 | $ 8,634 | $ 9,996 |
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 1 year | ||
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years |
Share-Based Compensation Perfor
Share-Based Compensation Performance Shares (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Jan. 02, 2022 | Jan. 03, 2021 | Dec. 29, 2019 | |
Share-based Compensation, Performance Shares, Nonvested, Number of Shares | |||
Weighted average grant date fair value, dividend equivalent units issued | $ 0 | ||
Performance Condition Award | |||
Share-based Compensation, Performance Shares, Nonvested, Number of Shares | |||
Non-vested, beginning of period | 429 | ||
Granted | 209 | ||
Dividend equivalent units issued | 10 | ||
Vested | (88) | ||
Forfeited | (55) | ||
Non-vested, end of period | 505 | 429 | |
Weighted average grant date fair value, non-vested, beginning of period | $ 19.06 | ||
Weighted average grant date fair value, granted | 20.21 | ||
Weighted average grant date fair value, dividend equivalent units issued | 20.48 | ||
Weighted average grant date fair value, vested | 15.65 | ||
Weighted average grant date fair value, forfeited | 15.65 | ||
Weighted average grant date fair value, non-vested, end of period | $ 20.48 | $ 19.06 | |
Total fair value, vested in period | $ 1,784 | $ 3,447 | $ 7,720 |
Market Condition Performance Award | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Risk-free interest rate | 0.20% | 1.38% | 2.51% |
Expected life in years | 3 years | 3 years | 3 years |
Expected volatility | 49.47% | 23.26% | 23.19% |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Share-based Compensation, Performance Shares, Nonvested, Number of Shares | |||
Non-vested, beginning of period | 346 | ||
Granted | 187 | ||
Dividend equivalent units issued | 8 | ||
Vested | (119) | ||
Forfeited | 0 | ||
Non-vested, end of period | 422 | 346 | |
Weighted average grant date fair value, non-vested, beginning of period | $ 23.65 | ||
Weighted average grant date fair value, granted | 22.96 | ||
Weighted average grant date fair value, dividend equivalent units issued | 24.53 | ||
Weighted average grant date fair value, vested | 15.65 | ||
Weighted average grant date fair value, forfeited | 0 | ||
Weighted average grant date fair value, non-vested, end of period | $ 24.52 | $ 23.65 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period Incremental Above Target | 52 | ||
Total fair value, vested in period | $ 3,498 | $ 4,910 | $ 7,135 |
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Performance Shares Vesting Range, Percentage of Target | 0.00% | ||
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Performance Shares Vesting Range, Percentage of Target | 200.00% |
Share-Based Compensation Modifi
Share-Based Compensation Modifications of Share-Based Awards (Details) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2022employees | Jan. 03, 2021USD ($)employees | Dec. 29, 2019USD ($)employees | |
Share-based Compensation Arrangement by Share-based Payment Award | |||
Number of employees subject to modification | employees | 0 | 7 | 10 |
Reorganization and realignment | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Increase in employee share-based compensation due to award modification | $ | $ 621 | $ 1,011 |
Share-Based Compensation Share-
Share-Based Compensation Share-based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2022 | Jan. 03, 2021 | Dec. 29, 2019 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs | |||
Share-based compensation | $ 22,019 | $ 18,930 | $ 18,676 |
Income tax benefit | (2,790) | (2,958) | (2,990) |
Share-based compensation, net of income tax benefit | 19,229 | 15,972 | 15,686 |
Total share-based compensation not yet recognized, non-vested awards | $ 29,337 | ||
Total share-based compensation not yet recognized, period for recognition, non-vested awards | 2 years 21 days | ||
Stock Options | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs | |||
Share-based compensation | $ 9,256 | 8,499 | 7,685 |
Restricted Stock | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs | |||
Share-based compensation | 6,677 | 6,507 | 5,762 |
Performance Condition Award | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs | |||
Share-based compensation | 2,861 | 782 | 2,195 |
Market Condition Performance Award | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs | |||
Share-based compensation | 3,225 | 2,521 | 2,023 |
Modified Awards | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs | |||
Share-based compensation | 0 | 621 | 1,011 |
Reorganization and realignment | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs | |||
Share-based compensation | $ 19 | $ 213 | $ 396 |
Impairment of Long-Lived Asse_3
Impairment of Long-Lived Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2022 | Jan. 03, 2021 | Dec. 29, 2019 | |
Impairment of Long-Lived Assets | |||
Impairment of long-lived assets | $ 2,251 | $ 8,037 | $ 6,999 |
Company-operated restaurants | |||
Impairment of Long-Lived Assets | |||
Impairment of long-lived assets | 1,862 | 7,586 | 294 |
Restaurants leased or subleased to franchisees | |||
Impairment of Long-Lived Assets | |||
Impairment of long-lived assets | 189 | 0 | 5,308 |
Surplus properties | |||
Impairment of Long-Lived Assets | |||
Impairment of long-lived assets | $ 200 | $ 451 | $ 1,397 |
Investment Income, Net (Details
Investment Income, Net (Details) - USD ($) $ in Thousands | Oct. 31, 2019 | Jan. 02, 2022 | Jan. 03, 2021 | Dec. 29, 2019 |
Net Investment Income | ||||
Gain on sale of investment | $ 63 | $ 0 | $ 24,496 | |
Other than Temporary Impairment Losses, Investments | 0 | (471) | 0 | |
Other, net | (24) | 246 | 1,102 | |
Investment income, net | $ 39 | $ (225) | $ 25,598 | |
Other investments in equity securities | ||||
Net Investment Income | ||||
Gain on sale of investment | $ 25,000 | |||
Other investments in equity securities | Investment income (loss), net | ||||
Net Investment Income | ||||
Gain on sale of investment | 24,366 | |||
Other investments in equity securities | General and administrative | ||||
Net Investment Income | ||||
Gain on sale of investment | $ 634 |
Retirement Benefit Plans Define
Retirement Benefit Plans Defined Contribution Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2022 | Jan. 03, 2021 | Dec. 29, 2019 | |
Defined Contribution Plan | |||
Defined Contribution Plan, Maximum Annual Contribution Per Employee, Percent | 75.00% | ||
Defined Contribution Plan, Employer Matching Contribution, Percent | 4.00% | ||
Defined Contribution Plan, Cost | $ 4,583 | $ 5,175 | $ 4,631 |
Retirement Benefit Plans Execut
Retirement Benefit Plans Executive Plan (Details) - Supplemental Employee Retirement Plans, Defined Benefit - USD ($) $ in Thousands | Jan. 02, 2022 | Jan. 03, 2021 |
Defined Benefit Plans and Other Postretirement Benefit Plans | ||
Liability, Defined Benefit Plan | $ 294 | $ 432 |
Deferred Compensation Arrangements, Recorded Liability | $ 1,455 | $ 1,108 |
Leases Lessee Lease Narrative (
Leases Lessee Lease Narrative (Details) | Jan. 02, 2022number_of_restaurants |
Lessee, Lease, Description | |
Number of restaurants | 6,949 |
Entity Operated Units | |
Lessee, Lease, Description | |
Number of restaurants | 408 |
Land And Building - Company Owned | Entity Operated Units | |
Lessee, Lease, Description | |
Number of restaurants | 159 |
Building - Company Owned; Land - Leased | Entity Operated Units | |
Lessee, Lease, Description | |
Number of restaurants | 141 |
Land And Building - Leased | Entity Operated Units | |
Lessee, Lease, Description | |
Number of restaurants | 108 |
Leases Lessor Lease Narrative (
Leases Lessor Lease Narrative (Details) | Jan. 02, 2022number_of_restaurants |
Lessor, Lease, Description | |
Number of restaurants | 6,949 |
Franchised Units | |
Lessor, Lease, Description | |
Number of restaurants | 6,541 |
Land And Building - Company Owned | Franchised Units | |
Lessor, Lease, Description | |
Number of restaurants | 485 |
Land And Building - Leased | Franchised Units | |
Lessor, Lease, Description | |
Number of restaurants | 1,235 |
Leases Components of Lease Cost
Leases Components of Lease Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2022 | Jan. 03, 2021 | Dec. 29, 2019 | |
Lease, Cost | |||
Amortization of finance lease assets | $ 13,992 | $ 13,395 | $ 11,241 |
Interest on finance lease liabilities | 41,419 | 40,682 | 37,012 |
Total finance lease cost | 55,411 | 54,077 | 48,253 |
Operating lease cost | 89,283 | 91,475 | 90,537 |
Variable lease cost | 63,853 | 59,076 | 58,978 |
Short-term lease cost | 5,102 | 4,641 | 4,717 |
Total operating lease cost | 158,238 | 155,192 | 154,232 |
Total lease cost | 213,649 | 209,269 | 202,485 |
Franchise rental expense | |||
Lease, Cost | |||
Total operating lease cost | 132,158 | 125,553 | 123,899 |
Cost of sales | |||
Lease, Cost | |||
Total operating lease cost | 23,558 | 26,866 | 27,419 |
Executory costs paid by lessee | |||
Lease, Cost | |||
Variable lease cost | $ 39,646 | $ 38,652 | $ 37,758 |
Leases Supplemental Cash Flow a
Leases Supplemental Cash Flow and Non-cash Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2022 | Jan. 03, 2021 | Dec. 29, 2019 | |
Cash Flow, Operating Activities, Lessee | |||
Operating cash flows from finance leases | $ 42,277 | $ 39,349 | $ 39,887 |
Operating cash flows from operating leases | 91,930 | 85,689 | 91,824 |
Cash Flow, Financing Activities, Lessee | |||
Financing cash flows from finance leases | 13,640 | 8,383 | 6,835 |
Lessee, Lease, Description | |||
Right-of-use assets obtained in exchange for finance lease liabilities | 82,032 | 34,918 | 50,061 |
Right-of-use assets obtained in exchange for operating lease liabilities | $ 58,770 | $ 18,327 | $ 15,411 |
Leases Supplemental Information
Leases Supplemental Information (Details) - USD ($) $ in Thousands | Jan. 02, 2022 | Jan. 03, 2021 |
Lessee, Lease, Description | ||
Weighted-average remaining lease term (years): Finance leases | 15 years 9 months 18 days | 16 years 2 months 12 days |
Weighted-average remaining lease term (years): Operating leases | 14 years 1 month 6 days | 14 years 7 months 6 days |
Weighted average discount rate: Finance leases | 8.91% | 9.54% |
Weighted average discount rate: Operating leases | 4.94% | 5.06% |
Finance lease assets, gross | $ 307,965 | $ 261,308 |
Accumulated amortization | (63,686) | (55,155) |
Finance lease assets | 244,279 | 206,153 |
Operating lease assets | $ 812,620 | $ 821,480 |
Leases Future Minimum Rental Pa
Leases Future Minimum Rental Payments for Non-cancelable Leases (Details) $ in Thousands | Jan. 02, 2022USD ($) |
Entity Operated Units | |
Finance Lease Liabilities, Payments, Due | |
Future minimum finance lease payments, next twelve months | $ 6,361 |
Future minimum finance lease payments, due year two | 6,317 |
Future minimum finance lease payments, due year three | 6,410 |
Future minimum finance lease payments, due year four | 6,610 |
Future minimum finance lease payments, due year five | 6,754 |
Future minimum finance lease payments, due after year five | 84,693 |
Total minimum finance lease payments | 117,145 |
Interest incurred on total minimum finance lease payments | (41,554) |
Present value of minimum finance lease payments | 75,591 |
Operating Lease Liabilities, Payments Due | |
Future minimum operating lease payments, next twelve months | 20,521 |
Future minimum operating lease payments, due year two | 20,989 |
Future minimum operating lease payments, due year three | 20,956 |
Future minimum operating lease payments, due year four | 20,745 |
Future minimum operating lease payments, due year five | 21,198 |
Future minimum operating lease payments, due after year five | 192,250 |
Total minimum operating lease payments | 296,659 |
Interest incurred on total minimum operating lease payments | (82,860) |
Present value of minimum operating lease payments | 213,799 |
Franchised Units | |
Finance Lease Liabilities, Payments, Due | |
Future minimum finance lease payments, next twelve months | 51,720 |
Future minimum finance lease payments, due year two | 52,957 |
Future minimum finance lease payments, due year three | 53,383 |
Future minimum finance lease payments, due year four | 53,876 |
Future minimum finance lease payments, due year five | 55,117 |
Future minimum finance lease payments, due after year five | 624,335 |
Total minimum finance lease payments | 891,388 |
Interest incurred on total minimum finance lease payments | (391,879) |
Present value of minimum finance lease payments | 499,509 |
Operating Lease Liabilities, Payments Due | |
Future minimum operating lease payments, next twelve months | 69,692 |
Future minimum operating lease payments, due year two | 69,158 |
Future minimum operating lease payments, due year three | 69,133 |
Future minimum operating lease payments, due year four | 68,910 |
Future minimum operating lease payments, due year five | 68,093 |
Future minimum operating lease payments, due after year five | 630,404 |
Total minimum operating lease payments | 975,390 |
Interest incurred on total minimum operating lease payments | (288,546) |
Present value of minimum operating lease payments | 686,844 |
Current portion of finance lease liabilities | |
Finance Lease Liabilities, Payments, Due | |
Present value of minimum finance lease payments | 15,513 |
Long-term finance lease liabilities | |
Finance Lease Liabilities, Payments, Due | |
Present value of minimum finance lease payments | 559,587 |
Current portion of operating lease liabilities | |
Operating Lease Liabilities, Payments Due | |
Present value of minimum operating lease payments | 47,315 |
Long-term operating lease liabilities | |
Operating Lease Liabilities, Payments Due | |
Present value of minimum operating lease payments | $ 853,328 |
Leases Components of Lease Inco
Leases Components of Lease Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2022 | Jan. 03, 2021 | Dec. 29, 2019 | |
Lessor Lease Income | |||
Sales-type leases, selling profit | $ 4,244 | $ 1,995 | $ 2,285 |
Sales-type and direct-financing leases, interest income | 30,648 | 29,067 | 26,333 |
Operating lease income | 173,442 | 174,452 | 176,629 |
Variable lease income | 63,213 | 58,196 | 56,436 |
Franchise rental income | 236,655 | 232,648 | 233,065 |
Sublease income | 174,327 | 169,921 | 171,126 |
Executory costs paid to lessor | |||
Lessor Lease Income | |||
Variable lease income | $ 39,650 | $ 38,636 | $ 37,739 |
Leases Future Minimum Rental Re
Leases Future Minimum Rental Receipts for Non-cancelable Leases (Details) - USD ($) $ in Thousands | Jan. 02, 2022 | Jan. 03, 2021 |
Direct Financing Lease, Net Investment in Leases | ||
Net investment in unguaranteed residual assets | $ 549 | |
Subleases, sales-type and direct financing | ||
Sales-type and Direct Financing Leases, Lease Receivable, Fiscal Year Maturity | ||
Future minimum sales-type and direct financing lease receipts, next twelve months | 33,883 | |
Future minimum sales-type and direct financing lease receipts, due year two | 34,933 | |
Future minimum sales-type and direct financing lease receipts, due year three | 36,929 | |
Future minimum sales-type and direct financing lease receipts, due year four | 35,803 | |
Future minimum sales-type and direct financing lease receipts, due year five | 36,950 | |
Future minimum sales-type and direct financing lease receipts, due after year five | 438,518 | |
Total future minimum sales-type and direct financing lease receipts | 617,016 | |
Unearned interest on total minimum sales-type and direct financing lease receipts | (331,403) | |
Present value of minimum sales-type and direct financing lease receipts | 285,613 | |
Owned properties, sales-type and direct financing | ||
Sales-type and Direct Financing Leases, Lease Receivable, Fiscal Year Maturity | ||
Future minimum sales-type and direct financing lease receipts, next twelve months | 2,543 | |
Future minimum sales-type and direct financing lease receipts, due year two | 2,589 | |
Future minimum sales-type and direct financing lease receipts, due year three | 2,599 | |
Future minimum sales-type and direct financing lease receipts, due year four | 2,717 | |
Future minimum sales-type and direct financing lease receipts, due year five | 2,887 | |
Future minimum sales-type and direct financing lease receipts, due after year five | 31,876 | |
Total future minimum sales-type and direct financing lease receipts | 45,211 | |
Unearned interest on total minimum sales-type and direct financing lease receipts | (24,851) | |
Present value of minimum sales-type and direct financing lease receipts | 20,360 | |
Subleases, operating | ||
Lessor, Operating Lease, Payments, Fiscal Year Maturity | ||
Future minimum operating lease receipts, next twelve months | 110,714 | |
Future minimum operating lease receipts, due year two | 111,330 | |
Future minimum operating lease receipts, due year three | 111,591 | |
Future minimum operating lease receipts, due year four | 111,102 | |
Future minimum operating lease receipts, due year five | 110,537 | |
Future minimum operating lease receipts, due after year five | 1,020,240 | |
Total future minimum operating lease receipts | 1,575,514 | |
Owned properties, operating | ||
Lessor, Operating Lease, Payments, Fiscal Year Maturity | ||
Future minimum operating lease receipts, next twelve months | 53,076 | |
Future minimum operating lease receipts, due year two | 53,384 | |
Future minimum operating lease receipts, due year three | 54,490 | |
Future minimum operating lease receipts, due year four | 55,086 | |
Future minimum operating lease receipts, due year five | 56,845 | |
Future minimum operating lease receipts, due after year five | 647,591 | |
Total future minimum operating lease receipts | 920,472 | |
Accounts and notes receivable, net | ||
Sales-type and Direct Financing Leases, Lease Receivable, Fiscal Year Maturity | ||
Present value of minimum sales-type and direct financing lease receipts | 6,266 | $ 5,965 |
Net investment in sales-type and direct financing leases | ||
Sales-type and Direct Financing Leases, Lease Receivable, Fiscal Year Maturity | ||
Present value of minimum sales-type and direct financing lease receipts | $ 299,707 |
Leases Properties Leased to Thi
Leases Properties Leased to Third Parties (Details) - USD ($) $ in Thousands | Jan. 02, 2022 | Jan. 03, 2021 |
Property, Plant and Equipment | ||
Properties owned by Company and leased to franchisees under operating lease, before accumulated depreciation | $ 548,996 | $ 591,262 |
Accumulated depreciation and amortization | (173,243) | (170,722) |
Properties owned by Company and leased to franchisees under operating lease, after accumulated depreciation | 375,753 | 420,540 |
Land | ||
Property, Plant and Equipment | ||
Properties owned by Company and leased to franchisees under operating lease, before accumulated depreciation | 258,513 | 279,956 |
Buildings and improvements | ||
Property, Plant and Equipment | ||
Properties owned by Company and leased to franchisees under operating lease, before accumulated depreciation | 288,782 | 309,605 |
Restaurant equipment | ||
Property, Plant and Equipment | ||
Properties owned by Company and leased to franchisees under operating lease, before accumulated depreciation | $ 1,701 | $ 1,701 |
Guarantees and Other Commitme_2
Guarantees and Other Commitments and Contingencies Franchisee Image Activation Programs (Details) | 12 Months Ended |
Jan. 02, 2022 | |
Maximum | New Build Incentive Program | |
Other commitments | |
Years of reduction in royalty payment attributable to new builds | 2 years |
Maximum | 2021 New Build Incentive Program | |
Other commitments | |
Years of reduction in royalty payment attributable to new builds | 2 years |
Maximum | Remodel Incentive Program | |
Other commitments | |
Years of early franchise agreement renewal attributable to incentive program | 25 |
Minimum | Remodel Incentive Program | |
Other commitments | |
Years of early franchise agreement renewal attributable to incentive program | 20 |
Guarantees and Other Commitme_3
Guarantees and Other Commitments and Contingencies Lease Guarantees (Details) $ in Thousands | Jan. 02, 2022USD ($) |
Property Lease Guarantee | |
Guarantor Obligations | |
Guarantor Obligations, Maximum Exposure, Undiscounted | $ 90,649 |
Guarantees and Other Commitme_4
Guarantees and Other Commitments and Contingencies Insurance (Details) $ in Thousands | Jan. 02, 2022USD ($) |
Other commitments | |
Accrued Risk Insurance | $ 18,590 |
Accrued Health Insurance | 2,966 |
Insurance Claims | |
Other commitments | |
Loss Contingency, Range of Possible Loss per Occurrence, Maximum | $ 500 |
Guarantees and Other Commitme_5
Guarantees and Other Commitments and Contingencies Letters of Credit (Details) $ in Thousands | Jan. 02, 2022USD ($) |
Guarantor Obligations | |
Letters of Credit Outstanding, Amount | $ 22,251 |
Guarantees and Other Commitme_6
Guarantees and Other Commitments and Contingencies Beverage Agreement (Details) - Beverage Agreement - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2022 | Jan. 03, 2021 | Dec. 29, 2019 | |
Long-term Purchase Commitment | |||
Purchase Obligation, Purchases During Period | $ 9,709 | $ 10,986 | $ 11,440 |
Purchase Obligation, Due in Next Twelve Months | 10,700 | ||
Purchase Obligation, Due in Second Year | 10,800 | ||
Purchase Obligation, Due in Third Year | 11,100 | ||
Purchase Obligation, Due in Fourth Year | 11,400 | ||
Accounts payable | |||
Long-term Purchase Commitment | |||
Amount Due from (to) Vendors for Purchase and Capital Commitments | $ (4,325) |
Guarantees and Other Commitme_7
Guarantees and Other Commitments and Contingencies IT Services Agreement (Details) - IT Services Agreement - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2022 | Jan. 03, 2021 | Dec. 29, 2019 | |
Long-term Purchase Commitment | |||
Purchase Obligation, Purchases During Period | $ 20,053 | $ 16,961 | $ 1,386 |
Purchase Obligation, Due in Next Twelve Months | 17,100 | ||
Purchase Obligation, Due in Second Year | 14,700 | ||
Purchase Obligation, Due in Third Year | 13,800 | ||
Purchase Obligation, Due in Fourth Year | 7,100 | ||
Accrued expenses and other current liabilities | |||
Long-term Purchase Commitment | |||
Amount Due from (to) Vendors for Purchase and Capital Commitments | $ (1,899) |
Guarantees and Other Commitme_8
Guarantees and Other Commitments and Contingencies Marketing Agreement (Details) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2022USD ($)Broadcasters | Jan. 03, 2021USD ($) | Dec. 29, 2019USD ($) | |
Long-term Purchase Commitment | |||
Number of National Broadcasters | Broadcasters | 2 | ||
Marketing Agreement | |||
Long-term Purchase Commitment | |||
Purchase Obligation, Purchases During Period | $ 15,000 | $ 0 | $ 11,000 |
Purchase Obligation, Due in Next Twelve Months | 12,900 | ||
Purchase Obligation, Due in Second Year | 13,400 | ||
Purchase Obligation, Due in Third Year | $ 12,700 |
Transactions with Related Par_3
Transactions with Related Parties Related Party Transaction Summary (Details) $ in Thousands | Jan. 07, 2021number_of_restaurants | Jan. 03, 2021USD ($) | Jan. 02, 2022USD ($)number_of_restaurants | Jan. 03, 2021USD ($) | Dec. 29, 2019USD ($) | Jun. 30, 2021USD ($)ft² | Nov. 30, 2018USD ($)ft² |
Related Party Transaction | |||||||
Number of Restaurants | number_of_restaurants | 6,949 | ||||||
Franchised Units | |||||||
Related Party Transaction | |||||||
Number of Restaurants | number_of_restaurants | 6,541 | ||||||
QSCC | |||||||
Related Party Transaction | |||||||
Area of Real Estate Property | ft² | 18,774 | 14,493 | |||||
Annual Base Rental | $ 250 | $ 217 | |||||
Proceeds from Rents Received | $ 217 | $ 217 | $ 217 | ||||
QSCC | Cost of sales | Patronage Dividends | |||||||
Related Party Transaction | |||||||
Related Party Transaction, Other Revenues from Transactions with Related Party | 279 | 0 | 504 | ||||
TimWen | |||||||
Related Party Transaction | |||||||
Related Party Transaction, Expenses from Transactions with Related Party | 18,687 | 16,130 | 16,660 | ||||
TimWen | Cost of sales | Franchise Rental Expense | |||||||
Related Party Transaction | |||||||
Related Party Transaction, Expenses from Transactions with Related Party | 18,906 | 16,339 | 16,867 | ||||
TimWen | General and administrative | Management Fee Income | |||||||
Related Party Transaction | |||||||
Related Party Transaction, Other Revenues from Transactions with Related Party | $ 219 | $ 209 | 207 | ||||
Yellow Cab | Franchised Units | |||||||
Related Party Transaction | |||||||
Number of Restaurants | number_of_restaurants | 84 | ||||||
Significant Changes, Franchises Purchased During Period | number_of_restaurants | 54 | ||||||
Yellow Cab | Royalty, Advertising Fund, Lease, and Other Income | |||||||
Related Party Transaction | |||||||
Related Party Transaction, Other Revenues from Transactions with Related Party | $ 1,090 | $ 9,869 | $ 0 | ||||
Yellow Cab | Accounts Receivable and Advertising Funds Restricted Assets | Royalty, Advertising Fund, Lease, and Other Income | |||||||
Related Party Transaction | |||||||
Accounts Receivable, Related Parties, Current | $ 974 |
Legal and Environmental Matte_2
Legal and Environmental Matters (Details) $ in Thousands | Jan. 02, 2022USD ($)Civil_complaintsDefendants |
Loss Contingencies | |
Number of Putative Shareholder Derivative Complaints | Civil_complaints | 2 |
Loss contingency, number of defendants | Defendants | 1 |
Derivative Lawsuit | |
Loss Contingency, Estimate | |
Loss Contingency, Estimate of Possible Loss | $ | $ 950 |
Advertising Costs and Funds (De
Advertising Costs and Funds (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2022 | Jan. 03, 2021 | Dec. 29, 2019 | |
Restricted Assets and Liabilities | |||
Cash and cash equivalents | $ 27,535 | $ 33,973 | $ 34,539 |
Accounts receivable, net | 101,515 | 93,660 | |
Advertising funds restricted assets | 159,818 | 142,306 | |
Accounts payable | 41,163 | 31,063 | |
Accrued expenses and other current liabilities | 140,783 | 155,321 | |
Advertising funds restricted liabilities | 157,901 | 140,511 | |
Cost of sales | |||
Restricted Assets and Liabilities | |||
Advertising Expense | 31,617 | 29,671 | $ 29,954 |
Advertising funds restricted assets | |||
Restricted Assets and Liabilities | |||
Cash and cash equivalents | 89,993 | 77,279 | |
Accounts receivable, net | 65,497 | 63,252 | |
Other assets | 4,328 | 1,775 | |
Advertising funds restricted liabilities | |||
Restricted Assets and Liabilities | |||
Accounts payable | 136,043 | 123,064 | |
Accrued expenses and other current liabilities | $ 21,858 | $ 17,447 |
Geographic Information (Details
Geographic Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2022 | Jan. 03, 2021 | Dec. 29, 2019 | |
Revenues from External Customers and Long-Lived Assets | |||
Revenues | $ 1,896,998 | $ 1,733,825 | $ 1,709,002 |
Properties | 906,867 | 915,889 | 977,000 |
U.S. | |||
Revenues from External Customers and Long-Lived Assets | |||
Revenues | 1,771,997 | 1,635,696 | 1,606,619 |
Properties | 856,841 | 879,806 | 941,607 |
International | |||
Revenues from External Customers and Long-Lived Assets | |||
Revenues | 125,001 | 98,129 | 102,383 |
Properties | $ 50,026 | $ 36,083 | $ 35,393 |
Segment Information Reconciliat
Segment Information Reconciliation of Revenue from Segments to Consolidated (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2022 | Jan. 03, 2021 | Dec. 29, 2019 | |
Segment Reporting, Revenue Reconciling Item | |||
Total revenues | $ 1,896,998 | $ 1,733,825 | $ 1,709,002 |
Wendy's U.S. | |||
Segment Reporting, Revenue Reconciling Item | |||
Total revenues | 1,567,496 | 1,431,382 | 1,404,307 |
Wendy's International | |||
Segment Reporting, Revenue Reconciling Item | |||
Total revenues | 86,369 | 65,642 | 68,198 |
Global Real Estate & Development | |||
Segment Reporting, Revenue Reconciling Item | |||
Total revenues | $ 243,133 | $ 236,801 | $ 236,497 |
Segment Information Reconcili_2
Segment Information Reconciliation of Profit from Segments to Consolidated (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2022 | Jan. 03, 2021 | Dec. 29, 2019 | |
Segment Reporting, Reconciling Item for Profit from Segment to Consolidated | |||
Segment profit | $ 366,960 | $ 269,308 | $ 262,579 |
Unallocated franchise support and other costs | (42,900) | (26,464) | (43,686) |
Advertising funds surplus | 2,770 | 2,904 | 1,337 |
Unallocated general and administrative | (242,970) | (206,876) | (200,206) |
Depreciation and amortization | (125,540) | (132,775) | (131,693) |
System optimization gains, net | 33,545 | 3,148 | 1,283 |
Reorganization and realignment costs | (8,548) | (16,030) | (16,965) |
Impairment of long-lived assets | (2,251) | (8,037) | (6,999) |
Unallocated other operating income, net | 14,468 | 8,397 | 11,418 |
Interest expense, net | (109,185) | (117,737) | (115,971) |
Loss on early extinguishment of debt | (17,917) | 0 | (8,496) |
Investment income (loss), net | 39 | (225) | 25,598 |
Other income, net | 681 | 1,449 | 7,771 |
Income before income taxes | 240,578 | 152,795 | 171,481 |
Corporate and Other | |||
Segment Reporting, Reconciling Item for Profit from Segment to Consolidated | |||
Unallocated franchise support and other costs | (753) | 0 | 0 |
Unallocated general and administrative | (116,273) | (94,256) | (81,230) |
Unallocated other operating income, net | 394 | 190 | 291 |
Operating Segments | |||
Segment Reporting, Reconciling Item for Profit from Segment to Consolidated | |||
Segment profit | 583,616 | 514,164 | 496,555 |
Operating Segments | Wendy's U.S. | |||
Segment Reporting, Reconciling Item for Profit from Segment to Consolidated | |||
Segment profit | 450,117 | 393,314 | 369,193 |
Advertising funds surplus | (25,000) | (14,600) | |
Operating Segments | Wendy's International | |||
Segment Reporting, Reconciling Item for Profit from Segment to Consolidated | |||
Segment profit | 27,386 | 20,119 | 20,246 |
Operating Segments | Global Real Estate & Development | |||
Segment Reporting, Reconciling Item for Profit from Segment to Consolidated | |||
Segment profit | $ 106,113 | $ 100,731 | $ 107,116 |
Segment Information Reconcili_3
Segment Information Reconciliation of Other Significant Reconciling Items from Segments to Consolidated (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2022 | Jan. 03, 2021 | Dec. 29, 2019 | |
Segment Reporting, Other Significant Reconciling Item | |||
Total net income of equity method investments | $ 11,203 | $ 6,096 | $ 8,673 |
Wendy's International | |||
Segment Reporting, Other Significant Reconciling Item | |||
Total net income of equity method investments | 0 | (417) | (1,022) |
Global Real Estate & Development | |||
Segment Reporting, Other Significant Reconciling Item | |||
Total net income of equity method investments | $ 11,203 | $ 6,513 | $ 9,695 |