System Optimization Losses, Net

3 Months Ended

Mar. 30, 2025

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 franchisee-to-franchisee restaurant transfers (“Franchise Flips”). As of March 30, 2025, 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 the three months ended March 30, 2025, the Company did not facilitate any Franchise Flips. During the three months ended March 31, 2024, the Company facilitated 11 Franchise Flips. Additionally, during the three months ended March 30, 2025, the Company completed the sale of two Company-operated restaurants to franchisees. No Company-operated restaurants were sold to or purchased from franchisees during the three months ended March 31, 2024.

Gains and losses recognized on dispositions are recorded to “System optimization losses, net” in our condensed 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:


	Three Months Ended
	March 30, 2025		March 31, 2024
Number of restaurants sold to franchisees	2		—

Proceeds from sales of restaurants	$	55	$	—
Net assets sold (a)	(169)		—
Other	(25)		—
Loss on sales of restaurants, net	(139)		—



Gain (loss) on sales of other assets, net (b)	49		(127)
System optimization losses, net	$	(90)	$	(127)

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(a)Net assets sold consisted primarily of equipment.

(b)During the three months ended March 31, 2024, the Company received net cash proceeds of $26, primarily from the sale of surplus and other properties.

Assets Held for Sale

As of March 30, 2025 and December 29, 2024, the Company had assets held for sale of $3,727 and $2,833, respectively, primarily consisting of surplus properties. Assets held for sale are included in “Prepaid expenses and other current assets.”