The transaction is part of the Company's System Optimization initiative, designed to promote new restaurant growth and reimaging, while generating a more predictable revenue stream for the Company.
The Wendy's Company (NASDAQ: WEN) announced the sale of 70 restaurants in the Dallas-Ft. Worth metroplex to Texas-based MUY Hamburger Partners, LLC, a Wendy's® franchisee. The transaction is part of the Company's System Optimization initiative, designed to promote new restaurant growth and reimaging, while generating a more predictable revenue stream for the Company.
The Company is geographically concentrating its restaurant ownership through the sale of about 415 Company-operated restaurants in 13 U.S. markets, primarily in the West. The Company has completed the market-by-market sale of 314 restaurants so far, and now expects to complete all of the sales by the end of the First Quarter 2014. The Company anticipates total proceeds from System Optimization of approximately $235 million, including $138 million in 2013.
With the purchase of the Dallas-Ft. Worth restaurants, MUY Hamburger Partners, led by President and Chief Executive Officer James Bodenstedt, will now operate a total of 87 Wendy's restaurants in Texas.
The purchase agreement includes a commitment to reimage selected restaurants in Wendy's contemporary Image Activation restaurant design, as well as development plans for new restaurants.
As a result of System Optimization, the Company expects to generate a higher operating margin and stronger free cash flow, along with further enhancing the quality of its earnings with a more predictable revenue stream from a higher percentage of royalty and rental income.
"Jim is a tremendous operator with strong operational focus and customer service orientation," said Wendy's President and Chief Executive Officer Emil Brolick. "We're confident the MUY organization has the talent, proven experience and resources to build on Wendy's strong presence in the Dallas-Fort Worth market through restaurant reimaging, new development and other growth initiatives."
The Wendy's Company is the world's third-largest quick-service hamburger company. The Wendy's system includes more than 6,500 franchise and Company-operated restaurants in the United States and 28 countries and U.S. territories worldwide.
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