System Optimization Gains, Net

9 Months Ended

Sep. 28, 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 September 28, 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 nine months ended September 28, 2025 and September 29, 2024, the Company facilitated one and 14 Franchise Flips, respectively. Additionally, during the nine months ended September 28, 2025 and September 29, 2024, the Company completed the sale of five and one Company-operated restaurants to franchisees, respectively.

Gains and losses recognized on dispositions are recorded to “System optimization gains, 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				Nine Months Ended
	September 28, 2025		September 29, 2024		September 28, 2025		September 29, 2024
Number of restaurants sold to franchisees	3		1		5		1

Proceeds from sales of restaurants	$	125	$	834	$	180	$	834
Net assets sold (a)	—		(725)		(169)		(725)
Other	(125)		6		(150)		6
Gain (loss) on sales of restaurants, net	—		115		(139)		115
Post-closing adjustments on sales of restaurants (b)	(6)		440		(16)		694
(Loss) gain on sales of restaurants, net	(6)		555		(155)		809

Gain (loss) on sales of other assets, net (c)	35		(135)		481		(236)
System optimization gains, net	$	29	$	420	$	326	$	573

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

(b)The three and nine months ended September 29, 2024 represent the recognition of deferred gains as a result of the resolution of certain contingencies related to the extension of lease terms for restaurants previously sold to franchisees.

(c)During the three and nine months ended September 28, 2025, the Company received net cash proceeds of $5 and $1,305, respectively, primarily from the sale of surplus and other properties. During the three and nine months ended September 29, 2024, the Company received net cash proceeds of $1,787 and $2,388, respectively, primarily from the sale of surplus and other properties.

Assets Held for Sale

As of September 28, 2025 and December 29, 2024, the Company had assets held for sale of $4,831 and $2,833, respectively, primarily consisting of surplus properties. Assets held for sale are included in “Prepaid expenses and other current assets.”