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System Optimization Gains, Net
 12 Months Ended
Dec. 29, 2024
System optimization gains, net  
System Optimization Gains, Net Properties
Year End
December 29, 2024December 31, 2023
Land$379,581 $373,634 
Buildings and improvements534,054 519,244 
Leasehold improvements453,381 432,051 
Office, restaurant and transportation equipment362,312 344,623 
1,729,328 1,669,552 
Accumulated depreciation and amortization(821,541)(778,472)
$907,787 $891,080 

Depreciation and amortization expense related to properties was $75,575, $70,108 and $69,239 during 2024, 2023 and 2022, 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 December 29, 2024, Company-operated restaurant ownership was 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 and drive new restaurant development. During 2024, 2023 and 2022, the Company facilitated 50, 99 and 79 Franchise Flips, respectively. Additionally, during 2024, the Company completed the sale of three Company-operated restaurants to franchisees and, during 2022, the Company completed the sale of one Company-operated restaurant to a franchisee. No Company-operated restaurants were sold to franchisees during 2023.

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.” 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
202420232022
Number of restaurants sold to franchisees3 — 1 
Proceeds from sales of restaurants (a)$1,808 $— $79 
Net assets sold (b)(1,081)— (141)
Net unfavorable leases— — (360)
Other(1)— 6 
726 — (416)
Post-closing adjustments on sales of restaurants (c)694 858 2,877 
Gain on sales of restaurants, net1,420 858 2,461 
(Loss) gain on sales of other assets, net (d)(201)22 4,318 
System optimization gains, net$1,219 $880 $6,779 
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(a)In addition to the proceeds noted herein, the Company received cash proceeds of $378 during 2022 related to a note receivable issued in connection with restaurants previously sold to a franchisee.

(b)Net assets sold consisted primarily of land and equipment.

(c)2024, 2023 and 2022 include the recognition of deferred gains of $800, $858 and $3,522, respectively, as a result of the resolution of certain contingencies related to the extension of lease terms for restaurants previously sold to franchisees.

(d)During 2024, 2023 and 2022, the Company received cash proceeds of $3,138, $2,115 and $7,780, respectively, primarily from the sale of surplus and other properties.
Assets Held for Sale

As of December 29, 2024 and December 31, 2023, the Company had assets held for sale of $2,833 and $2,689, respectively, primarily consisting of surplus properties. Assets held for sale are included in “Prepaid expenses and other current assets.”