What changed in this filing

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Item 1. Business

2023-03-01 compared with 2022-03-01 · 89 added, 98 removed, 226 unchanged (45% of the section changed)

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Wendy’s opened its first restaurant in Columbus, Ohio in 1969.

Today, Wendy’s is the second largest quick-service restaurant company in the hamburger sandwich segment in the United States (the “U.S.”) based on traffic share, and the third largest globally with 6,949 restaurants in the United States and 31 foreign countries and U.S.

and 31 foreign countries and U.S.

territories as of January 1, 2023.

At January 2, 2022, there were 5,938 Wendy’s restaurants in operation in the United States.

At January 1, 2023, there were 5,994 Wendy’s restaurants in operation in the U.S.

Of these restaurants, 403 were operated by the Company and 5,591 were operated by a total of 217 franchisees.

In addition, at January 1, 2023, there were 1,101 Wendy’s restaurants in operation in 31 foreign countries and U.S.

Of the international restaurants, 1,006 were operated by franchisees and five were operated by the Company in the United Kingdom (the “U.K.”).

Of the international restaurants, 1,089 were operated by 106 franchisees and 12 were operated by the Company in the United Kingdom (the “U.K.”).

The Company’s principal executive offices are located at One Dave Thomas Blvd., Dublin, Ohio 43017, and its telephone number is (614) 764-3100.

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The Wendy’s Company’s corporate predecessor was incorporated in Ohio in 1929 and was reincorporated in Delaware in June 1994.

Effective September 29, 2008, in conjunction with the Wendy’s Merger (as defined below), the Company’s corporate name was changed from Triarc Companies, Inc.

Effective September 29, 2008, in conjunction with the merger of Triarc Companies, Inc.

and Wendy’s International, Inc., the Company’s corporate name was changed from Triarc Companies, Inc.

to Wendy’s/Arby’s Group, Inc.

(“Wendy’s/Arby’s”).

Effective July 5, 2011, in connection with the Company’s sale of Arby’s Restaurant Group, Inc.

(“Arby’s”), the Company’s corporate name was changed to The Wendy’s Company.

Merger with Wendy’s

On September 29, 2008, Triarc Companies, Inc.

and Wendy’s International, Inc.

completed their merger (the “Wendy’s Merger”) in an all-stock transaction in which Wendy’s shareholders received 4.25 shares of Wendy’s/Arby’s Class A common stock for each Wendy’s common share owned.

In the Wendy’s Merger, approximately 377,000,000 shares of Wendy’s/Arby’s Class A common stock were issued to Wendy’s shareholders.

In addition, effective on the date of the Wendy’s Merger, Wendy’s/Arby’s Class B common stock was converted into Class A common stock.

In connection with the May 28, 2009 amendment and restatement of Wendy’s/Arby’s Certificate of Incorporation, Wendy’s/Arby’s Class A common stock was redesignated as “Common Stock.”

Sale of Arby’s

On July 4, 2011, the Company completed the sale of 100% of the common stock of Arby’s to ARG IH Corporation (“ARG”), a wholly-owned subsidiary of ARG Holding Corporation (“ARG Parent”), for $130.0 million in cash (subject to customary purchase price adjustments) and 18.5% of the common stock of ARG Parent (through which the Company indirectly retained an 18.5% interest in Arby’s).

Our 18.5% equity interest was diluted to 12.3% on February 5, 2018, when a subsidiary of ARG Parent acquired Buffalo Wild Wings, Inc.

As a result, our diluted ownership interest included both the Arby’s ® and Buffalo Wild Wings ® brands under the newly formed combined company, Inspire Brands, Inc.

(“Inspire Brands”).

On August 16, 2018, the Company sold its remaining 12.3% ownership interest to Inspire Brands for $450.0 million.

(Arby’s is a registered trademark of Arby’s IP Holder, LLC and Buffalo Wild Wings is a registered trademark of Buffalo Wild Wings, Inc.)

The Company’s fiscal reporting periods consist of 52 or 53 weeks ending on the Sunday closest to December 31 and are referred to herein as (1) “the year ended January 2, 2022” or “2021,” which consisted of 52 weeks, (2) “the year ended January 3, 2021” or “2020,” which consisted of 53 weeks, and (3) “the year ended December 29, 2019” or “2019,” which consisted of 52 weeks.

Effective July 5, 2011, in connection with the Company’s sale of Arby’s Restaurant Group, Inc., the Company’s corporate name was changed to The Wendy’s Company.

The Company’s fiscal reporting periods consist of 52 or 53 weeks ending on the Sunday closest to December 31 and are referred to herein as (1) “the year ended January 1, 2023” or “2022,” which consisted of 52 weeks, (2) “the year ended January 2, 2022” or “2021,” which consisted of 52 weeks, and (3) “the year ended January 3, 2021” or “2020,” which consisted of 53 weeks.

Business Strategy

Wendy’s long-term growth opportunities include investing in accelerated global growth through (1) building our breakfast daypart, (2) accelerating our implementation of consumer-facing digital platforms and technologies and (3) expanding the Company’s footprint through targeted U.S.

restaurant expansion and accelerated international restaurant expansion.

Wendy’s long-term growth opportunities include delivering accelerated global growth through (1) driving strong same-restaurant sales momentum across all dayparts, (2) accelerating our implementation of consumer-facing digital platforms and technologies and (3) expanding the Company’s footprint through global restaurant expansion.

Wendy’s vision is to become the world’s most thriving and beloved restaurant brand.

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Restaurant Openings and Closings

During 2021, Wendy’s opened 12 new Company-operated restaurants and closed eight generally underperforming Company-operated restaurants.

During 2022 , Wendy’s opened 14 new Company-operated restaurants and closed seven generally underperforming Company-operated restaurants.

During 2022 , Wendy’s franchisees opened 262 new restaurants and closed 123 generally underperforming restaurants.

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In March 2020, Wendy’s entered the breakfast daypart across the U.S.

Wendy’s breakfast menu features a variety of breakfast sandwiches, biscuits and croissants, sides such as seasoned potatoes, oatmeal bars and seasonal fruit, and a beverage platform that includes hot coffee, cold brew iced coffee and our vanilla and chocolate Frosty-ccino iced coffee.

system and, in May 2022, launched breakfast in Canada.

Wendy’s breakfast menu features a variety of breakfast sandwiches such as the Breakfast Baconator ® and sides such as seasoned potatoes.

Free-standing Wendy’s restaurants generally include a pick-up window in addition to a dining room.

In 2019, approximately two-thirds of sales at Company-operated restaurants occurred through the pick-up window.

In 2020 and 2021,

pick-up window sales represented approximately 83% and 82% of sales at Company-operated restaurants, respectively, reflecting the impact of the COVID-19 pandemic and other macroeconomic factors.

In 2020, 2021 and 2022 pick-up window sales represented approximately 83%, 82% and 77% of sales at Company-operated restaurants, respectively.

Wendy’s strives to maintain quality and uniformity throughout all restaurants by publishing detailed specifications for food products, preparation and service, continual in-service training of employees, restaurant operational audits and field visits from Wendy’s supervisors.

In the case of franchisees, field visits are made by Wendy’s personnel who review operations, including quality, service and cleanliness and make recommendations to assist in compliance with Wendy’s specifications.

In the case of franchisees, field visits are made by Wendy’s personnel who review restaurant operations, including quality, service and cleanliness, and make recommendations to assist in compliance with Wendy’s specifications.

Supply Chain, Distribution and Purchasing

As of January 2, 2022, three independent processors (five total production facilities) supplied all of the beef used by Wendy’s restaurants in the United States.

In addition, seven independent processors (15 total production facilities) supplied all of the chicken used by Wendy’s restaurants in the United States.

In addition, there was one main in-line distributor of food, packaging and beverage products, excluding breads, that serviced approximately 67% of Wendy’s restaurants in the United States and four additional in-line distributors that, in the aggregate, serviced approximately 32% of Wendy’s restaurants in the United States.

As of January 1, 2023 , three independent processors (five total production facilities) supplied all of the beef used by Wendy’s restaurants in the U.S.

In addition, seven independent processors (14 total production facilities) supplied all of the chicken used by Wendy’s restaurants in the U.S.

In addition, there was one main in-line distributor of food, packaging and beverage products, excluding breads, that serviced approximately 67% of Wendy’s restaurants in the U.S.

and four additional in-line distributors that, in the aggregate, serviced approximately 32% of Wendy’s restaurants in the U.S.

Except as discussed below, Wendy’s and its franchisees have not experienced any material shortages of food, equipment, fixtures or other products that are necessary to maintain restaurant operations, and Wendy’s anticipates no such shortages of products and believes that alternate suppliers and distribution sources are available.

During 2020, the COVID-19 pandemic led to interruptions in the delivery of certain products to Wendy’s restaurants.

For example, we experienced disruptions to our beef supply beginning in early May 2020 as beef suppliers across North America faced production challenges.

As a result, some menu items were occasionally in short supply at some Wendy’s system restaurants.

While we and our supply chain partners effectively managed through this disruption and the beef supply subsequently returned to normal levels across the Wendy’s system, the pandemic has continued to impact our supply chain and there can be no assurances that we will not see similar disruptions in the future.

Suppliers and distributors to the Wendy’s system must comply with United States Department of Agriculture (“USDA”) and United States Food and Drug Administration (“FDA”) regulations governing the manufacture, packaging, storage, distribution and sale of all food and packaging products.

During 2020, the COVID-19 pandemic led to interruptions in the delivery of beef and other products and, as a result, some menu items were occasionally in short supply at some Wendy’s system restaurants.

While we and our supply chain partners effectively managed through this disruption, there can be no assurances that we will not see similar disruptions in the future.

Suppliers and distributors to the Wendy’s system must comply with U.S.

Department of Agriculture (“USDA”) and U.S.

Food and Drug Administration (“FDA”) regulations governing the manufacture, packaging, storage, distribution and sale of all food and packaging products.

Wendy’s has a purchasing co-op relationship structure with its franchisees that establishes Quality Supply Chain Co-op, Inc.

QSCC manages, for the Wendy’s system in the United States and Canada, contracts for the purchase and distribution of food, proprietary paper, operating supplies and equipment under national agreements with pricing based upon total system volume.

QSCC’s supply chain management facilitates the continuity of supply and provides consolidated purchasing efficiencies while monitoring and seeking to minimize possible obsolete inventory throughout the Wendy’s supply chain in the United States and Canada.

QSCC manages, for the Wendy’s system in the U.S.

and Canada, contracts for the purchase and distribution of food, proprietary paper, operating supplies and equipment under national agreements with pricing based upon total system volume.

Wendy’s and its franchisees pay sourcing fees to third-party vendors on certain products sourced by QSCC.

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Wendy’s quality assurance program is designed to verify that the food products supplied to our restaurants are processed in a safe, sanitary environment and in compliance with our food safety and quality standards.

Wendy’s quality assurance personnel regularly conduct sanitation and production audits for all of our core menu product processing facilities, which include beef, chicken, pork, buns, french fries, Frosty® dessert ingredients and produce.

Wendy’s quality assurance personnel regularly conduct sanitation and production audits for all of our core menu product processing facilities, which include beef, chicken, egg, pork, buns, french fries, Frosty ® dessert ingredients and produce.

Animal welfare audits are also conducted at all beef, chicken and pork facilities to confirm compliance with our required animal welfare and handling policies and procedures.

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Wendy’s representatives, including third-party auditors, regularly conduct evaluations and inspections of all Company-operated and franchised restaurants to test conformance to our sanitation, food safety and operational requirements.

In addition, restaurant crew and managers at Company-operated and franchised restaurants are re-certified each year on critical food safety standards.

Wendy’s has the right to terminate franchise agreements if franchisees fail to comply with quality standards.

In response to the COVID-19 pandemic, we adapted and evolved certain of our auditing practices which were traditionally conducted onsite, taking advantage of various virtual tools and resources to engage effectively with our suppliers.

We also reviewed and reinforced our strict policies and procedures related to food safety procedures, personal hygiene standards, handwashing requirements and sanitation protocols through frequent communications and retraining.

As the COVID-19 pandemic continues to evolve, we provide guidance to Company-operated and franchised restaurants to be aware of any federal, state/provincial or local laws, regulations, rules or requirements related to the pandemic, including face mask, occupancy or vaccination confirmation requirements, to encourage compliance.

Information Technology

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Trademarks and Service Marks

Wendy’s or its subsidiaries have registered certain trademarks and service marks in the United States Patent and Trademark Office and in international jurisdictions, some of which include Wendy’s ® , Quality Is Our Recipe ® and the Wendy Cameo design.

Wendy’s or its subsidiaries have registered certain trademarks and service marks in the U.S.

Patent and Trademark Office and in international jurisdictions, some of which include Wendy’s ® , Quality Is Our Recipe ® and the Wendy Cameo design.

Wendy’s believes that these and other related marks are of material importance to its business.

Domestic trademarks and service marks have their next required maintenance filings at various times from 2022 to 2032 in order to keep such registrations in force, while international trademarks and service marks have various durations of ten to 15 years.

Domestic trademarks and service marks have their next required maintenance filings at various times from 2023 to 2033 in order to keep such registrations in force, while international trademarks and service marks have various durations of seven to 15 years.

Wendy’s generally intends to maintain and renew its trademarks and service mark registrations in accordance with applicable deadlines.

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Thomas, Wendy’s has, through its extensive investment in the advertising and promotional use of Mr.

Thomas’ name, likeness, image, voice, caricature, endorsement rights and photographs (the “Thomas Persona”), made the Thomas Persona well known in the United States and throughout North America and a valuable asset for both Wendy’s and Mr.

Thomas’ name, likeness, image, voice, caricature, endorsement rights and photographs (the “Thomas Persona”), made the Thomas Persona well known in the U.S.

and throughout North America and a valuable asset for both Wendy’s and Mr.

Thomas’ estate.

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The number and location of restaurants, quality and speed of service, attractiveness of facilities, effectiveness of marketing and new product development by Wendy’s and its competitors are also important factors.

The price charged for each menu item may vary from market to market (and within markets) depending on competitive pricing

and the local cost structure.

The price charged for each menu item may vary from market to market (and within markets) depending on competitive pricing and the local cost structure.

Wendy’s competes within the food service industry and the quick-service restaurant sector for customers as well as for personnel, suitable real estate sites and qualified franchisees.

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Additionally, convenience stores and retail outlets at gas stations frequently offer a wide variety of sandwiches and other foods.

Wendy’s also competes with grocery chains and other retail outlets that sell food to be prepared at home.

Competition with these chains and other outlets could increase based on the gap between the price of food prepared at home compared to the price of food purchased at restaurants.

Wendy’s also competes with grocery chains, food delivery providers and other retail outlets that sell food to be prepared at home.

Competition with these chains, providers and other outlets could increase based on the gap between the price of food prepared at home compared to the price of food purchased at restaurants.

Technology and delivery are becoming increasingly critical parts of the restaurant consumer experience.

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Franchise Arrangements

The rights and obligations governing the majority of franchised restaurants operating in the United States are set forth in the Wendy’s current Unit Franchise Agreement (the “Current Franchise Agreement”) (non-traditional locations, including delivery kitchens, may operate under an amended agreement or alternate form of agreement).

The rights and obligations governing the majority of franchised restaurants operating in the U.S.

are set forth in the Wendy’s current Unit Franchise Agreement (the “Current Franchise Agreement”) (non-traditional locations, including delivery kitchens, may operate under an amended agreement or alternate form of agreement).

This agreement provides the franchisee the right to construct, own and operate a Wendy’s restaurant upon a site accepted by Wendy’s and to use the Wendy’s system in connection with the operation of the restaurant at that site.

The Current Franchise Agreement provides for a 20-year term and a ten-year renewal subject to certain conditions.

The initial term may be extended up to 25 years and the renewal extended up to 20 years for qualifying restaurants under the new restaurant development incentive and reimage programs described below in “Franchise Development and Other Relationships”.

Wendy’s has in the past franchised under different agreements on a multi-unit basis;

The Current Franchise Agreement provides for a 20-year term and a 10-year renewal subject to certain conditions.

The initial term may be extended up to 25 years and the renewal extended up to 20 or 25 years for qualifying restaurants under the new restaurant development incentive and reimage programs described below in “Franchise Development and Other Relationships.” Wendy’s has in the past franchised under different agreements on a multi-unit basis;

however, Wendy’s now grants new Wendy’s franchises on a unit-by-unit basis.

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The agreement also typically requires that the franchisee pay Wendy’s an initial technical assistance fee.

In the United States, the standard technical assistance fee required under a newly executed Current Franchise Agreement is currently $50,000 for each new restaurant opened.

In the U.S., the standard technical assistance fee required under a newly executed Current Franchise Agreement is currently $50,000 for each new restaurant opened.

The technical assistance fee is used to defray some of the costs to Wendy’s for training, start-up and transitional services related to new and existing franchisees acquiring Company-operated restaurants and in the development and opening of new restaurants.

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The standard technical assistance fee is currently C$50,000 for each new restaurant opened.

Franchisees who wish to operate Wendy’s restaurants outside of the United States and Canada enter into franchise or license agreements with Wendy’s that generally provide franchise rights for each restaurant for an initial term of ten years or 20 years, depending on the country, and typically include a ten-year renewal provision, subject to certain conditions.

Franchisees who wish to operate Wendy’s restaurants outside of the U.S.

and Canada enter into franchise or license agreements with Wendy’s that generally provide franchise rights for each restaurant for an initial term of ten years or 20 years, depending on the country, and typically include a ten-year renewal provision, subject to certain conditions.

The agreements grant a license to the franchisee to use the Wendy’s trademarks and know-how in the operation of a Wendy’s restaurant at a specified location.

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In these instances, the franchisee generally pays Wendy’s an upfront development fee, annual development fees or a per restaurant development fee.

In certain circumstances, Wendy’s may grant a franchisee the right to sub-franchise in a stated territory, subject to certain conditions.

In certain circumstances, Wendy’s may charge an upfront development fee for a non-exclusive territory, which is proportionate to a multi-unit development commitment.

Wendy’s may also grant a franchisee the right to sub-franchise in a stated territory, subject to certain conditions.

Non-Traditional Development

Non-traditional locations, such as fuel and transportation centers, food courts and other retail locations, military bases and delivery kitchens, represent an increasing component of Wendy’s development strategy.

For example, in 2021, we announced a new development commitment with REEF Kitchens to open and operate up to 700 delivery kitchens over a five-year period across the United States, Canada and the United Kingdom.

These delivery kitchens and other non-traditional locations may be subject to different rights and obligations than our traditional franchise arrangements, including with respect to initial and renewal franchise terms, technical assistance fees, monthly royalty rates and advertising contribution rates, and the sales levels at these locations may also differ from sales levels at traditional Wendy’s restaurants.

Non-traditional locations, such as fuel and transportation centers, food courts and other retail locations, military bases and delivery kitchens, represent a component of Wendy’s development strategy.

These non-traditional locations may be subject to different rights and obligations than our traditional franchise arrangements, including with respect to initial and renewal franchise terms, technical assistance fees, monthly royalty rates and advertising contribution rates, and the sales levels at these locations may also differ from sales levels at traditional Wendy’s restaurants.

Franchise Development and Other Relationships

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The relationship agreement addresses other aspects of the franchisor-franchisee relationship, such as restrictions on operating competing restaurants, participation in brand initiatives such as the Image Activation program, employment of approved operators, confidentiality and restrictions on engaging in sale/leaseback or debt refinancing transactions without Wendy’s prior consent.

In order to promote new restaurant development, Wendy’s has an incentive program for franchisees that provides for technical assistance fee waivers and reductions in royalty and national advertising payments for up to the first two years of operation for qualifying new restaurants opened prior to December 31, 2022.

In addition, Wendy’s has a restaurant development incentive program that provides for incremental reductions in royalty and national advertising payments for up to the first two years of operation for qualifying new restaurants for existing franchisees that sign up for the program under a new development agreement, or through an extension of their existing development agreement, and commit to incremental development of new Wendy’s restaurants.

Under any extended development agreements, franchisees are also eligible for technical assistance fee waivers for restaurants opened one year in advance of their original development schedule so long as the restaurants are opened prior to December 31, 2022.

To promote new restaurant development, Wendy’s has provided franchisees with certain incentive programs for qualifying new restaurants .

In February 2023, Wendy’s announced a new restaurant development incentive program in the U.S.

Canada that provides for waivers of royalty, national advertising and technical assistance fees for up to the first three years of operation for qualifying new restaurants (“Pacesetter”).

Wendy’s previously offered and will continue to offer a restaurant development incentive program that provides for reductions in royalty and national advertising fees for up to the first two years of operation for qualifying new restaurants (“Groundbreaker”).

and Canadian franchisees may elect either the Pacesetter program or the Groundbreaker program when committing to new multi-unit development agreements or adding incremental commitments to existing development agreements.

Wendy’s also provides franchisees with the option of an early 20-year or 25-year renewal of their franchise agreement upon completion of reimaging utilizing certain approved Image Activation reimage designs.

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Advertising and Marketing

In the United States and Canada, Wendy’s advertises nationally through national advertising funds on network and cable television programs, including nationally televised events, and advertises locally primarily through regional network and cable television, radio and social media.

Wendy’s maintains two national advertising funds established to collect and administer

funds contributed for use in advertising through television, radio, the Internet and a variety of promotional campaigns, including through digital and social media platforms.

Separate national advertising funds are administered for Wendy’s United States and Canadian restaurant locations.

and Canada, Wendy’s advertises nationally through national advertising funds primarily on network and cable television programs, including nationally televised events, as well as through audio and digital media, and advertises locally primarily through regional network and cable television, audio and digital media and out-of-home media, such as billboards.

Wendy’s maintains two national advertising funds established to collect and administer funds contributed for use in advertising through television, radio, the Internet and a variety of promotional campaigns, including through digital and social media platforms.

Separate national advertising funds are administered for Wendy’s U.S.

and Canadian restaurant locations.

Contributions to the national advertising funds are required to be made by both Company-operated and franchised restaurants and are based on a percentage of restaurant sales.

In addition to the contributions to the national advertising funds, Wendy’s requires additional contributions to be made for both Company-operated and franchised restaurants based on a percentage of restaurant sales for the purpose of local and regional advertising programs.

Required franchisee contributions to the national advertising funds and for local and regional advertising programs are governed by the Current Franchise Agreement in the United States and by the Single Unit Sub-Franchise Agreement in Canada.

Required franchisee contributions to the national advertising funds and for local and regional advertising programs are governed by the Current Franchise Agreement in the U.S.

and by the Single Unit Sub-Franchise Agreement in Canada.

Required contributions by Company-operated restaurants for advertising and promotional programs are at the same percentage of sales as franchised restaurants within the Wendy’s system.

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Our restaurants, our food and the value and service we provide to our customers are all integral to our long-term success, but ultimately it is our people that help us deliver our brand promise of “Fast Food Done Right” every single day.

We continue to invest in employees to ensure we are able to attract, hire, develop and retain great talent throughout our organization.

We measure our effectiveness in these areas using various tools and metrics, including administering an employee engagement survey twice a year and tracking our employee turnover rates compared to others in the restaurant industry.

During 2021, we continued to outperform our peer group and industry benchmarks in the areas of employee engagement and turnover.

As of January 2, 2022, the Company was comprised of approximately 14,500 employees, of which nearly two-thirds were part-time, and one-third were full-time.

The vast majority of our employees are located in the United States and work in our Company-operated restaurants within our Wendy’s U.S.

We continue to invest in employees to ensure we are able to attract, hire and retain great talent throughout our organization.

We measure our effectiveness in these areas using various tools and metrics, including administering employee engagement surveys annually and tracking our employee turnover rates compared to others in the restaurant industry.

As of January 1, 2023, the Company was comprised of approximately 14,500 employees, of which approximately one-third were full-time, and two-thirds were part-time.

The vast majority of our employees are located in the U.S.

and work in our Company-operated restaurants within our Wendy’s U.S.

business segment.

Outside of our Company-operated restaurants, our largest population of employees work in our field support organization or at our restaurant support center in Dublin, Ohio.

Outside of our Company-operated restaurants, our

largest population of employees work in our restaurant support organization, which includes employees across the globe and at our restaurant support center in Dublin, Ohio.

We are proud to have a workforce with diverse backgrounds and experiences.

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From day one, the Wendy’s business has always been of, for and about people.

Respect and fair treatment for our team members, franchisees, supplier partners and vendors is a central part of our business.

Respect and fair treatment for our team members, franchisees, supplier partners and vendors are a central part of our business.

So is staying true to the values established by our founder Dave Thomas more than 50 years ago, which include Doing the Right Thing, Treating People with Respect and Giving Something Back.

Our commitment to these values is reflected in our Code of Business Conduct and Ethics, which applies to Company employees and directors, and in our Supplier Code of Conduct, which sets forth our expectations for suppliers to the Wendy’s system.

We strive to bring our values to life through daily interactions with our team members, franchisees and customers and in the communities where we do business.

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Creating and fostering inclusive work environments allows us to create an engaging and welcoming culture for our employees, which we believe positively affects the quality of products, service and experience we deliver to our customers.

In 2021, we created an Office of DE&I and appointed Dr.

Beverly Stallings-Johnson as our Chief DE&I Officer.

Under her leadership, we strive to increase our knowledge and accountability and expect our DE&I strategy to continue to grow and evolve.

We also announced a

focus on five goals related to increasing diverse representation at multiple levels of our organization and among franchisee owners over a five-year period.

Through the leadership and support of our Office of DE&I, we continue to make meaningful progress against all of our goals, including increasing the diversity of representation among Company leadership and management and attracting new, diverse franchisees into our system.

We are fortunate to have several thriving Employee Resource Groups (“ERGs”), which are voluntary employee-led groups, each sponsored by a Wendy’s senior leadership team member.

Our ERGs serve an important role in support of our DE&I strategy, creating forums for learning and inclusion, providing opportunities to celebrate different backgrounds, empowering employees to bring their authentic self to work, and creating leadership and professional development opportunities.

Our ERGs are open to all Company employees at our restaurant support center and focus on employees and allies who identify as Women (Women of Wendy’s), LGBTQ+ (WeQual), Military Veterans & Families (WeVets), Culturally Diverse (WCDN), Black (WeBERG) and Young Professionals (WenGEN).

Our ERGs focus on employees and allies who identify as Women (W omen of Wendy’s), LGBTQ+ (WeQual), Military Veterans & Families (WeVets), Culturally Diverse (WCD), Black (WeBERG) and Young Professionals (WenGEN).

In 2022, we added our newest ERG, GiveCare, with a focus on caretakers for children, siblings, parents, partners and other family members.

Compensation and Benefits

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We enable this by benchmarking and analyzing pay and benefits both externally and internally.

In addition to receiving competitive hourly rates and base salaries, all general managers and district managers of our Company-operated restaurants are eligible for performance-based cash incentive bonuses, along with all corporate management staff.

Restaurant support service employees are also eligible to participate in a performance-based annual bonus plan.

For our restaurant-level employees, we offer the potential for raises based on individual performance reviews throughout the year.

At Wendy’s, we are committed to providing pay equity for all employees, regardless of gender or ethnicity.

We also offer a robust set of benefits to help eligible employees and their families stay healthy, manage spend related to health and financial wellbeing and effectively balance work and life.

This includes insurance for medical, dental, vision and prescription drugs, telehealth access, 401(k) savings and retirement plans, health savings accounts, employee assistance program, paid sick leave, bonding leave and adoption assistance.

We also offer a robust set of benefits to help eligible employees and their families stay healthy, manage spend related to health and financial well-being and effectively balance work and life.

employees, this includes offerings such as insurance for medical, dental, vision and prescription drugs, telehealth access, 401(k) savings and retirement plans, health savings accounts, employee assistance program, paid sick leave, bonding leave and adoption assistance.

Safety and Well-Being

We are committed to providing our employees with safe and comfortable work environments and offering resources that our employees can use to help promote their well-being.

Throughout 2021, we continued to evolve our approach to effectively manage the impact of COVID-19 on our business, restaurants and employees, continuing some measures adopted in 2020, such as enhanced safety training, and evolving in other areas, such as expanding our paid sick time policy.

As we have done since the onset of the pandemic, we continued to monitor public health guidance and follow federal, state/provincial and local laws, regulations, rules and requirements related to COVID-19.

We are extremely proud of the work our employees have done to support our restaurants, employees, customers and communities that we serve throughout the pandemic and that commitment remains.

We are extremely proud of the work our employees have done to support our restaurants, employees, customers and communities that we serve throughout the COVID-19 pandemic.

As the Company and our communities have transitioned from pandemic crisis intervention to ongoing prevention and protection, we remain committed to continuing to do our part to support the well-being of each other, our customers and our workplaces.

We remain focused on our high standards of quality and cleanliness at our restaurants through processes like reviewing cleaning procedures, maintaining an adequate supply of cleaning products and conducting our annual food safety recertification for our restaurant crew and managers.

We also recognize that the well-being of our employees goes beyond work and our work environments.

We offer several ben efits to support the health and well-being of our employees, including our employee assistance program (EAP), available at no cost to all Company Employees and their household members, as well as other training and resources related to overall health and well-being.

Talent Development

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Wendy’s University also provides targeted programming for corporate management staff, including diversity training, people manager training, leadership dialogues and the opportunity to participate in third-party conferences and training.

In 2022, we launched a new leadership development program (WeLead), facilitating a six-month program designed to build a performance-driven culture and develop talent across our organization.

Community-Based Giving

Wendy’s maintains charitable giving programs that support four core categories:

Wendy’s maintains a charitable giving program that supports four core categories:

(1) foster care adoption;

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In 2022, Wendy’s made charitable donations to a variety of organizations across the globe, highlighted by our continued support of the Dave Thomas Foundation for Adoption, a charitable foundation created by our founder, Dave Thomas, which has been our signature charitable cause for more than 25 years.

In addition to corporate contributions, we also hosted an employee-driven Community Giving Program, in which employees from across the Wendy’s system nominated worthy charitable organizations to receive charitable grants from The Wendy’s Foundation.

In addition to corporate contributions, we also host an employee-driven Community Giving Program, in which employees from across the Wendy’s system nominate worthy charitable organizations to receive charitable grants from The Wendy’s Foundation.

We also made grants available to charitable organizations chosen by each of our ERGs in support of their missions.

Additional information about our people and human capital initiatives is available on our website at www.wendys.com/what-we-value, in our annual Corporate Social Responsibility report and on The Square Deal TM Wendy’s Blog at

www.squaredealblog.com.

The contents of our website and these additional information sources are not incorporated by reference in this Form 10-K or any other report or document we file with the Securities and Exchange Commission.

Governmental Regulations

The Company and our franchisees are subject to various federal, state and local laws and regulations affecting the operation of our respective businesses, including laws and regulations relating to building and zoning, health, fire and safety, sanitation, food preparation, nutritional content and menu labeling, advertising, information security, privacy and consumer protection, as well as laws, regulations, recommendations and guidelines related to the COVID-19 pandemic.

Each Wendy’s restaurant is subject to licensing and regulation by a number of governmental authorities in the state or municipality in which the restaurant is located.

Each Wendy’s restaurant is subject to licensing and regulation by a number of governmental authorities in the state and/or municipality in which the restaurant is located.

The Company is also subject to federal, state and local laws governing labor and employment matters, including minimum wage requirements, overtime and other working conditions, family leave and health care mandates, union organizing, work authorization requirements, insurance and workers’ compensation rules and anti-discrimination and anti-harassment laws applicable to Company employees, and our franchisees are subject to labor and employment laws with respect to their employees.

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Several states require registration and disclosure of the FDD in connection with franchise offers and sales and have laws regulating the franchisor-franchisee relationship.

These state laws often limit, among other things, the duration and scope of non-competition provisions and the ability of franchisors to terminate franchise agreements or withhold consent to the renewal or transfer of franchise agreements.

These state laws often limit, among other things, the duration and scope of non-competition provisions and the ability of franchisors to terminate franchise agreements or withhold consent to the

renewal or transfer of franchise agreements.

The Company believes that our FDD, together with applicable state versions or supplements, and franchising procedures comply in all material respects with the FTC’s franchise rules and applicable state franchise laws.

International Operations

Internationally, the Company and our franchisees are subject to national, provincial and local laws and regulations that often are similar to those impacting us and our franchisees in the U.S., including laws and regulations concerning franchises, labor and employment, building and zoning, health, fire and safety, sanitation, food preparation, nutritional content, menu labeling, advertising, information security, privacy and consumer protection, as well as laws, regulations, recommendations and guidelines related to the COVID-19 pandemic.

Wendy’s restaurants outside the U.S.

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Environmental Matters

The Company’s operations, including the selection and development of properties that we own or lease and any construction or improvements made at those properties, are subject to a variety of federal, state, local and international environmental laws and regulations, including laws and regulations concerning the storage, handling and disposal of hazardous or toxic substances.

The Company’s operations, including the selection and development of properties that we own, lease and/or sublease to franchisees, and any construction or improvements made at those properties, are subject to a variety of federal, state, local and international environmental laws and regulations, including laws and regulations concerning the storage, handling and disposal of hazardous or toxic substances.

Our properties are sometimes located in developed commercial or industrial areas and might previously have been occupied by more environmentally significant operations, such as gas stations.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business