System Optimization (Gains) Losses, Net

3 Months Ended

Mar. 29, 2026

System Optimization

System Optimization (Gains) Losses, Net

System Optimization (Gains) Losses, Net

System Optimization (Gains) Losses, Net

The Company optimizes the Wendy’s system by facilitating Franchise Flips, evaluating strategic acquisitions of franchised restaurants and strategic dispositions of Company-operated restaurants to existing and new franchisees and, at times, closing certain underperforming restaurants, to further strengthen the franchisee base, support franchisee economics and drive new restaurant development. During the three months ended March 29, 2026, the Company facilitated 41 Franchise Flips. During the three months ended March 30, 2025, the Company did not facilitate any Franchise Flips. Additionally, during the three months ended March 29, 2026 and March 30, 2025, the Company completed the sale of three and two Company-operated restaurants to franchisees, respectively.

Gains and losses recognized on dispositions are recorded to “System optimization (gains) 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 29, 2026		March 30, 2025
Number of restaurants sold to franchisees	3		2
Proceeds from sales of restaurants (a)	$	1,804	$	55
Net assets sold (b)	(1,572)		(169)
Other	(232)		(25)
Loss on sales of restaurants, net	—		(139)
Gain on sales of other assets, net (c)	1,625		49
System optimization gains (losses), net	$	1,625	$	(90)

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(a)During the three months ended March 29, 2026, the Company received net cash proceeds of $1,804 related to the sale of three Company-operated restaurants as part of the Company’s strategic build to suit development fund. These proceeds are included within operating activities in the Company’s condensed consolidated statements of cash flows.

(b)Net assets sold consisted primarily of equipment.

(c)During the three months ended March 29, 2026, the Company received net cash proceeds of $2,796, primarily from the sale of surplus and other properties.

Assets Held for Sale

As of March 29, 2026 and December 28, 2025, the Company had assets held for sale of $21,783 and $3,696, respectively, primarily consisting of surplus properties. Assets held for sale are included in “Prepaid expenses and other current assets.”