What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-02-23 compared with 2025-02-21 · 104 added, 123 removed, 403 unchanged (36% of the section changed)

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See “Results of Operations” below and Note 26 to the Consolidated Financial Statements contained in Item 8 herein for segment financial information.

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 December 29, 2024” or “2024,” (2) “the year ended December 31, 2023” or “2023,” and (3) “the year ended January 1, 2023” or “2022,” all of which consisted of 52 weeks.

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 December 28, 2025” or “2025,” (2) “the year ended December 29, 2024” or “2024,” and (3) “the year ended December 31, 2023” or “2023,” all of which consisted of 52 weeks.

All references to years, quarters and months relate to fiscal periods rather than calendar periods.

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In addition, at December 28, 2025, there were 1,428 Wendy’s restaurants in operation in 38 foreign countries and U.S.

Of the international restaurants, 1,294 were operated by 107 franchisees and 13 were operated by the Company in the U.K.

Of the international restaurants, 1,417 were operated by a total of 117 franchisees and 11 were operated by the Company in the U.K.

The revenues from our restaurant business are derived from two principal sources:

(1) sales at Company-operated restaurants and (2) franchise-related revenues, including royalties, national advertising funds contributions, rents and franchise fees received from Wendy’s franchised restaurants.

Company-operated restaurants comprised approximately 5% of the total Wendy’s system as of December 29, 2024.

Wendy’s operating results are impacted by a number of external factors, including commodity costs, labor costs, intense price competition, unemployment and consumer spending levels, general economic and market trends and weather.

Wendy’s strategic framework includes providing fresh, famous food to consumers, delivering an exceptional customer experience through operational excellence and expanding the Company’s footprint across the globe.

Our opportunities to execute on this framework for long-term profitable growth include (1) driving same-restaurant sales and share growth, (2) accelerating digital growth, (3) improving restaurant profitability and (4) driving global unit growth.

During 2025, the Company announced Project Fresh , a comprehensive plan to drive profitable growth and long-term value across our U.S.

The four strategic pillars of Project Fresh include (1) brand revitalization, (2) operational excellence, (3) system optimization and (4) capital allocation.

These pillars are designed to drive profitable average unit volume growth and increase traffic in the U.S.

by improving marketing effectiveness, menu offerings and the customer experience, and to enhance franchisee economics.

Internationally, the Company’s strategic priorities also include driving profitable average unit volume growth and sustaining strong net unit growth.

Key Business Measures

We track our results of operations and manage our business using the following key business measures, which include non-GAAP financial measures:

We track our results of operations and manage our business using the following key business measures:

• Same-Restaurant Sales - We report same-restaurant sales commencing after new restaurants have been open for 15 continuous months and as soon as reimaged restaurants reopen.

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Company-operated restaurant margin is influenced by factors such as price increases, the effectiveness of our advertising and marketing initiatives, featured products, product mix, fluctuations in food and labor costs, restaurant openings, remodels and closures and the level of our fixed and semi-variable costs.

• Systemwide Sales - Systemwide sales is a non-GAAP financial measure, which includes sales by both Company-operated restaurants and franchised restaurants.

• Systemwide Sales - Systemwide sales includes sales by both Company-operated restaurants and franchised restaurants.

Franchised restaurants’ sales are reported by our franchisees and represent their revenues from sales at franchised Wendy’s restaurants.

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• Average Unit Volumes - We calculate Company-operated restaurant average unit volumes by summing the average weekly sales of all Company-operated restaurants which reported sales during the week.

Franchised restaurant average unit volumes is a non-GAAP financial measure, which includes sales by franchised restaurants, which are reported by our franchisees and represent their revenue from sales at franchised Wendy’s restaurants.

Franchised restaurant average unit volumes includes sales by franchised restaurants, which are reported by our franchisees and represent their revenue from sales at franchised Wendy’s restaurants.

The Company’s consolidated financial statements do not include sales by franchised restaurants to their customers.

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the Company’s historical and prospective operating performance.

The Company believes that these metrics are important supplemental measures of operating performance because they highlight trends in the Company’s business that may not otherwise be apparent when relying solely on GAAP financial measures.

The Company believes investors, analysts and other interested parties use these metrics in evaluating issuers and that the presentation of these measures facilitates a comparative assessment of the Company’s operating performance.

With respect to same-restaurant sales, systemwide sales and franchised restaurant average unit volumes, the Company also believes that the data is useful in assessing consumer demand for the Company’s products and the overall success of the Wendy’s brand.

The non-GAAP financial measures discussed above do not replace the presentation of the Company’s financial results in accordance with GAAP.

Because all companies do not calculate non-GAAP financial measures in the same way, these measures as used by other companies may not be consistent with the way the Company calculates such measures.

2024 Financial Highlights

• Revenue increased 3.0% to $2.25 billion in 2024 compared to $2.18 billion in 2023;

• Global same-restaurant sales increased 1.5%, U.S.

same-restaurant sales increased 1.4% and international same-restaurant sales increased 2.8% compared to 2023.

On a two-year basis, global same-restaurant sales increased 5.8%;

• Global Company-operated restaurant margin was 15.4% in 2024, an increase of 80 basis points compared to 2023;

• Net income decreased 4.9% to $194.4 million in 2024 compared to $204.4 million in 2023.

Wendy’s long-term growth opportunities include accelerating consumer-facing digital platforms and technologies.

Over the past several years, the Company has invested significant resources to focus on consumer-facing technology, including enhancements to Wendy’s mobile apps and loyalty programs and establishing delivery arrangements with third-party vendors for Wendy’s U.S.

and Canadian restaurants.

The Company is also continuing to make digital investments and is partnering with key technology providers to help execute our digital, restaurant technology and enterprise technology initiatives and support our technology innovation and growth.

The Company’s digital business has continued to grow and digital sales increased from approximately 13.2% of global systemwide sales during 2023 to approximately 17.6% during 2024.

New Restaurant Development

Wendy’s long-term growth opportunities include expanding the Company’s footprint across the globe.

To promote new restaurant development, the Company has provided franchisees with certain incentive programs for qualifying new and existing restaurants (see Note 20 to the Consolidated Financial Statements contained in Item 8 herein for further discussion), in addition to our build to suit development fund (see Note 19 to the Consolidated Financial Statements contained in Item 8 herein for further discussion).

In addition, the Company has development agreements in place with a number of franchisees that contractually obligate such franchisees to open additional Wendy’s restaurants over a specified timeframe.

Global restaurant counts as of December 29, 2024 were flat compared to December 31, 2023 as a result of our actions to strengthen the system by closing certain underperforming restaurants during 2024.

Organizational Redesign

In February 2023, the Board of Directors approved a plan to redesign the Company’s organizational structure to better support the execution of the Company’s long-term growth strategy by maximizing organizational efficiency and streamlining decision making (the “Organizational Redesign Plan”).

As a result of the Organizational Redesign Plan, the Company held its general and administrative expense in 2023 relatively flat compared with 2022.

Additionally, in January 2024, the Board of Directors announced the appointment of Kirk Tanner as the Company’s new President and Chief Executive Officer, effective February 5, 2024.

Tanner succeeded Todd A.

Penegor, the Company’s previous President and Chief Executive Officer, who departed from the Company in February 2024.

The Company expects to incur total costs of approximately $18 million related to the Organizational Redesign Plan, including costs related to the succession of the President and Chief Executive Officer role.

Of the total costs, approximately $15 million will be cash expenditures through 2026.

Costs related to the Organizational Redesign Plan are recorded to “Reorganization and realignment costs.” During 2024, the Company recognized costs totaling $8.4 million, which primarily included severance and related employee costs.

The Company expects to incur additional costs aggregating approximately $0.6 million, comprised primarily of share-based compensation.

The Company expects costs related to the Organizational Redesign Plan to continue into 2026.

2025 Highlights

• Global systemwide sales were $13.96 billion in 2025 compared with $14.49 billion in 2024, a decrease of 3.5% on a constant currency basis;

• International systemwide sales were $2.06 billion in 2025 compared with $1.93 billion in 2024, an increase of 8.1% on a constant currency basis;

• Revenues decreased 3.1% to $2.18 billion in 2025 compared with $2.25 billion in 2024;

• Global same-restaurant sales decreased 4.7%, U.S.

same-restaurant sales decreased 5.6% and international same-restaurant sales increased 1.3% compared to 2024.

On a two-year basis, global same-restaurant sales decreased 3.2%;

• Global Company-operated restaurant margin was 13.6% in 2025, a decrease of 180 basis points compared to 2024;

• Income before income taxes decreased 16.6% to $227.2 million in 2025 compared to $272.4 million in 2024;

• Digital sales increased to approximately 20.8% of global systemwide sales in 2025 compared with approximately 17.6% in 2024;

• Systemwide restaurant count increased by 157 net new restaurants in 2025.

This section of this Form 10-K generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024.

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Results of Operations

The tables included throughout this Results of Operations section set forth in millions (except as otherwise indicated) the Company’s consolidated results of operations for the years ended December 29, 2024, December 31, 2023 and January 1, 2023.

2025 2024 2023

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Interest expense, net (126.5) (2.6) (123.9) 0.2 (124.1)

Gain on early extinguishment of debt, net — (2.3) 2.3 2.3 —

Investment income (loss), net — 10.4 (10.4) (12.5) 2.1

(Loss) gain on early extinguishment of debt, net (0.6) (0.6) — (2.3) 2.3

Investment loss, net (1.7) (1.7) — 10.4 (10.4)

Other income, net 12.5 (12.3) 24.8 (4.8) 29.6

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(a) Excludes Argentina due to the impact of that country’s highly inflationary economy.

(b) During 2024 and 2023, global systemwide sales increased 3.1% and 6.1%, respectively, U.S.

systemwide sales increased 2.2% and 5.1%, respectively, and international systemwide sales increased 9.0% and 14.1%, respectively, on a constant currency basis.

(b) During 2025 and 2024, global systemwide sales decreased 3.5% and increased 3.1%, respectively, U.S.

systemwide sales decreased 5.2% and increased 2.2%, respectively, and international systemwide sales increased 8.1% and 9.0%, respectively, on a constant currency basis.

The table below presents details regarding the change in restaurant counts of the Wendy’s system from 2023 to 2025.

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Restaurant count:

Restaurant count at January 1, 2023

Restaurant count at December 31, 2023

403 5,627 12 1,198 7,240

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Closed (21) (177) — (78) (276)

Net (sold to) purchased by franchisees (3) 3 — — —

Restaurant count at December 29, 2024

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Closed (2) (71) (3) (35) (111)

Net (sold to) purchased by franchisees (3) 3 — — —

Net purchased from (sold to) franchisees 30 (30) — — —

Restaurant count at December 28, 2025

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Sales $ 916.3 $ (9.6) $ 925.9 $ (4.2) $ 930.1

The decrease in sales during 2024 was primarily due to (1) net closures of Company-operated restaurants of $3.1 million and (2) a 0.1% decrease in Company-operated same-restaurant sales of $2.4 million.

Company-operated same-restaurant sales decreased due to a decrease in customer count, partially offset by higher average check.

The decrease in sales during 2025 was primarily due to (1) a 2.5% decrease in Company-operated same-restaurant sales of $22.0 million and (2) the sale of Company-operated restaurants to franchisees of $6.9 million.

These impacts were partially offset by (1) the Company’s acquisition of 35 franchise-operated restaurants during the third quarter of 2025 of $20.5 million and (2) net new restaurant development of $1.2 million.

Company-operated same-restaurant sales decreased due to a decrease in traffic, partially offset by higher average check.

Franchise Royalty Revenue and Fees 2025 2024 2023

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$ 602.7 $ (23.3) $ 626.0 $ 33.7 $ 592.3

Franchise royalty revenue during 2024 increased $16.3 million, of which (1) $9.3 million was due to a 1.7% increase in global franchise same-restaurant sales and (2) $8.3 million was due to net new restaurant development.

Franchise same-restaurant sales during 2024 increased due to higher average check, partially offset by a decrease in customer count.

The increase in franchise fees during 2024 was primarily due to (1) early termination fees for franchised restaurant closures of $8.2 million, (2) higher fees for providing information technology services to franchisees of $4.7 million and (3) an increase in other miscellaneous fees of $4.5 million.

The decrease in franchise royalty revenue during 2025 was primarily due to a 4.8% decrease in global franchise same-restaurant sales.

Franchise same-restaurant sales during 2025 decreased due to a decrease in traffic, partially offset by higher average check.

The increase in franchise fees during 2025 was primarily due to (1) higher fees for providing information technology services to franchisees of $6.9 million and (2) an increase in other miscellaneous fees of $1.9 million.

These increases were partially offset by early terminations fees for franchised restaurant closures in the prior year of $8.2 million.

Franchise Rental Income 2025 2024 2023

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Franchise rental income $ 235.8 $ (0.7) $ 236.5 $ 6.3 $ 230.2

The increase in franchise rental income during 2024 was primarily due to the impact of (1) amending certain existing leases of $4.0 million and (2) entering into new leases of $2.2 million.

The decrease in franchise rental income during 2025 was primarily due to (1) the impact of assigning certain existing leases to franchisees of $5.6 million.

This impact was partially offset by (1) entering into new leases of $2.3 million and (2) amending certain existing leases of $1.8 million.

Advertising Funds Revenue 2025 2024 2023

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Advertising funds revenue $ 422.1 $ (36.0) $ 458.1 $ 29.1 $ 429.0

The increase in advertising funds revenue during 2024 was primarily due to (1) promotional activity of $12.0 million, (2) an increase in franchise same-restaurant sales in the U.S.

and Canada of $6.9 million and (3) net new restaurant development of $5.6 million.

The decrease in advertising funds revenue during 2025 was primarily due to (1) a decrease in franchise same-restaurant sales of $23.0 million and (2) promotional activity in the prior year of $12.0 million.

Cost of Sales, as a Percent of Sales 2025 2024 2023

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86.4 % 1.8 % 84.6 % (0.8) % 85.4 %

The decrease in cost of sales, as a percent of sales, during 2024 was primarily due to (1) higher average check and (2) labor efficiencies.

These impacts were partially offset by (1) an increase in restaurant labor rates and (2) a decrease in customer count.

The increase in cost of sales, as a percent of sales, during 2025 was primarily due to (1) higher commodity costs, (2) a decrease in traffic and (3) an increase in restaurant labor rates.

These changes were partially offset by (1) higher average check and (2) labor efficiencies.

Franchise Support and Other Costs 2025 2024 2023

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Franchise support and other costs $ 81.0 $ 13.3 $ 67.7 $ 10.5 $ 57.2

The increase in franchise support and other costs during 2024 was primarily due to (1) an increase in costs incurred to provide information technology and other services to franchisees and (2) an increase in the provision for doubtful accounts.

The increase in franchise support and other costs during 2025 was primarily due to (1) an increase in the provision for doubtful accounts and (2) an increase in costs incurred to provide information technology services and other services to franchisees.

Franchise Rental Expense 2025 2024 2023

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Franchise rental expense $ 125.8 $ (1.6) $ 127.4 $ 2.0 $ 125.4

The increase in franchise rental expense during 2024 was primarily due to the impact of assigning certain leases to franchisees.

The decrease in franchise rental expense during 2025 was primarily due to the impact of assigning certain existing leases to franchisees.

Advertising Funds Expense 2025 2024 2023

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Advertising funds expense $ 422.6 $ (55.5) $ 478.1 $ 50.1 $ 428.0

The increase in advertising funds expense during 2024 was primarily due to (1) the same factors as described above for “Advertising Funds Revenue” and (2) the recognition of the expected Company breakfast advertising spend in excess of advertising funds revenue of $21.9 million.

The decrease in advertising funds expense during 2025 was primarily due to (1) the same factors as described above for “Advertising Funds Revenue” and (2) a decrease in the Company’s funding of incremental breakfast advertising.

General and Administrative 2025 2024 2023

Amount Change Amount Change Amount

Employee compensation and benefits $ 135.1 $ 8.7 $ 126.4 $ (2.1) $ 128.5

Professional fees 58.0 (2.3) 60.3 (1.5) 61.8

Incentive compensation 25.6 (1.2) 26.8 1.8 25.0

Share-based compensation $ 14.2 $ (8.0) $ 22.2 $ (0.3) $ 22.5

Incentive compensation 19.9 (5.7) 25.6 (1.2) 26.8

Professional fees 56.3 (1.7) 58.0 (2.3) 60.3

Employee compensation and benefits 147.4 12.3 135.1 8.7 126.4

Other, net 14.9 0.6 14.3 0.3 14.0

$ 252.7 $ (2.5) $ 255.2 $ 5.2 $ 250.0

The increase in general and administrative expenses during 2024 was primarily due to higher employee compensation and benefits.

This increase was partially offset by (1) lower professional fees, primarily as a result of costs associated with the Company’s human capital management (“HCM”) system implementation during 2023, and (2) a decrease in incentive compensation accruals, reflecting lower operating performance as compared to plan in 2024 versus 2023.

The decrease in general and administrative expenses during 2025 was primarily due to (1) lower share-based compensation as a result of the departure of the Company’s previous President and Chief Executive Officer and (2) a decrease in incentive compensation accruals, reflecting lower operating performance as compared to plan in 2025 versus 2024.

These decreases were partially offset by higher employee compensation and benefits.

Depreciation and Amortization (exclusive of amortization of cloud computing arrangements shown separately below) 2025 2024 2023

Amount Change Amount Change Amount

Restaurants $ 87.4 $ 1.6 $ 85.8 $ 1.8 $ 84.0

Restaurant properties $ 77.9 $ 4.4 $ 73.5 $ 3.8 $ 69.7

Finance lease assets 18.9 5.0 13.9 (2.2) 16.1

Technology support, corporate and other 55.4 (0.4) 55.8 5.8 50.0

$ 152.2 $ 9.0 $ 143.2 $ 7.4 $ 135.8

The increase in depreciation and amortization during 2024 was primarily due to (1) depreciation and amortization for technology investments and (2) asset additions for new and remodeled restaurants.

The increase in depreciation and amortization during 2025 was primarily due to (1) restaurant-related asset disposals and (2) asset additions for new and remodeled restaurants.

Amortization of Cloud Computing Arrangements 2025 2024 2023

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Amortization of cloud computing arrangements $ 18.6 $ 3.9 $ 14.7 $ 1.9 $ 12.8

The increase in amortization of cloud computing arrangements was primarily due to amortization of assets associated with the Company’s HCM system implementation completed in 2023.

The increase in amortization of cloud computing arrangements during 2025 was primarily due to amortization of assets associated with the Company’s digital investments.

System Optimization Gains, Net 2025 2024 2023

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System optimization gains, net $ 1.0 $ (0.2) $ 1.2 $ 0.3 $ 0.9

System optimization gains, net during 2025 were primarily comprised of gains on the sale of surplus and other properties.

System optimization gains, net during 2024 were primarily comprised of gains on the sale of Company-operated restaurants.

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$ (0.1) $ (8.6) $ 8.5 $ (0.7) $ 9.2

During 2024 and 2023, the Company recognized costs under the Organizational Redesign Plan of $8.4 million and $9.1 million, respectively, which primarily included severance and related employee costs.

During 2025, the Company recognized costs under the Organizational Redesign Plan of $(0.8) million, which primarily included a reversal of a severance accrual as a result of a change in estimate.

During 2024, the Company recognized costs under the Organizational Redesign Plan of $8.4 million, which primarily included severance and related employee costs.

See Note 17 to the Consolidated Financial Statements contained in Item 8 herein for further information on the Organizational Redesign Plan.

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Impairment of long-lived assets $ 12.1 $ 2.4 $ 9.7 $ 8.3 $ 1.4

The increase in impairment of long-lived assets during 2024 was primarily due to (1) the decision to close certain Company-operated restaurants and (2) the deterioration in operating performance of certain other Company-operated restaurants.

The increase in impairment of long-lived assets during 2025 was primarily due to the deterioration in operating performance of certain Company-operated restaurants.

Other Operating Income, Net 2025 2024 2023

Amount Change Amount Change Amount

Gains on sales-type leases $ 0.5 $ (2.0) $ 2.5 $ (0.5) $ 3.0

Lease buyout $ 4.0 $ 5.0 $ (1.0) $ (0.9) $ (0.1)

Equity in earnings in joint ventures, net 11.6 0.8 10.8 1.4 9.4

Gain from insurance recoveries — — — (8.6) 8.6

Claim settlement 4.0 4.0 — — —

Gains on sales-type leases 2.9 2.4 0.5 (2.0) 2.5

Other, net 11.3 (0.6) 11.9 0.5 11.4

$ 22.2 $ 10.8 $ 11.4 $ 2.4 $ 13.8

The decrease in other operating income, net during 2024 was primarily due to prior year gains on new and modified sales-type leases.

The increase in other operating income, net during 2025 was primarily due to (1) an increase in lease buyout activity, (2) the settlement of a claim and (3) gains on new and modified sales-type leases.

Interest Expense, Net 2025 2024 2023

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Interest expense, net $ 126.5 $ 2.6 $ 123.9 $ (0.2) $ 124.1

Interest expense, net decreased during 2024 primarily due to lower outstanding long-term debt.

See Note 9 to the Consolidated Financial Statements contained in Item 8 herein for further information.

Gain on Early Extinguishment of Debt, Net 2024 2023 2022

Interest expense, net increased during 2025 primarily due to the impact of amending certain existing leases.

(Loss) Gain on Early Extinguishment of Debt, Net 2025 2024 2023

Amount Change Amount Change Amount

Gain on early extinguishment of debt, net $ — $ (2.3) $ 2.3 $ 2.3 $ —

During 2023, the Company incurred a net gain on early extinguishment of debt of $2.3 million, primarily due to a gain related to the repurchase of $29.2 million in principal of its Class A-2 senior secured notes, partially offset by a loss related to the repurchase of $40.4 million in principal of its 7% debentures.

(Loss) gain on early extinguishment of debt, net $ (0.6) $ (0.6) $ — $ (2.3) $ 2.3

During 2025, in connection with the refinancing of a portion of the Company’s securitized financing facility, the Company incurred a loss on the early extinguishment of debt of $0.6 million as a result of repaying the outstanding Series 2019-1 Class A-2-I Notes with the proceeds from the issuance of its Series 2025-1 Class A-2 Notes.

See Note 9 to the Consolidated Financial Statements contained in Item 8 herein for further information.

Investment Income (Loss), Net 2024 2023 2022

Investment Loss, Net 2025 2024 2023

Amount Change Amount Change Amount

Investment income (loss), net $ — $ 10.4 $ (10.4) $ (12.5) $ 2.1

During 2023, the Company recorded a loss of $10.4 million due to impairment charges for the difference between estimated fair value and the carrying value of an investment in equity securities.

Investment loss, net $ 1.7 $ 1.7 $ — $ (10.4) $ 10.4

During 2025, the Company recorded a loss of $1.7 million due to impairment charges for the difference between the estimated fair value and the carrying value of an investment in equity securities.

Other Income, Net 2025 2024 2023

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Other income, net $ 12.5 $ (12.3) $ 24.8 $ (4.8) $ 29.6

The decrease in other income, net during 2024 was primarily due to a decrease in interest income, reflecting lower balances of cash equivalents.

The decrease in other income, net during 2025 was primarily due to a decrease in interest income, reflecting lower balances of cash equivalents and lower interest rates.

Provision for Income Taxes 2025 2024 2023

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Effective tax rate on income 27.4 % (1.3) % 28.7 % 1.9 % 26.8 %

The increase in the provision for income taxes and the effective tax rate during 2024 was primarily due to a discrete state tax item.

The decrease in the provision for income taxes and the effective tax rate during 2025 was primarily due to (1) an unfavorable discrete state tax item in the prior year and (2) the tax effects of share-based compensation.

These impacts were partially offset by the tax effects of the Company’s foreign operations.

Numerous countries have enacted the Organization of Economic Corporation and Development’s framework on a global minimum tax (referred to as “Pillar 2”), with the earliest effective date for taxable years beginning after December 31, 2023.

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Segment profit $ 489.1 $ (36.9) $ 526.0 $ (2.4) $ 528.4

The increase in Wendy’s U.S.

revenues during 2024 was primarily due to (1) higher advertising fund revenue, (2) an increase in franchisee fees, (3) an increase in franchise same-restaurant sales and (4) restaurant development activity.

Franchise same-restaurant sales increased during 2024 primarily due to higher average check, partially offset by a decrease in customer count.

These increases were partially offset by a decrease in Company-operated sales driven by the same factors as described above for “Sales.”

The decrease in Wendy’s U.S.

segment profit during 2024 was primarily due to (1) an increase in the Company’s funding of incremental advertising, (2) a decrease in Company-operated sales and (3) higher franchise support and other costs.

These changes were partially offset by an increase in franchise fees and royalty revenue.

revenues during 2025 was primarily due to (1) lower advertising fund revenue and (2) a decrease in same-restaurant sales.

Same-restaurant sales decreased during 2025 primarily due to a decrease in traffic, partially offset by higher average check.

These changes were partially offset by the Company’s acquisition of 35 franchise-operated restaurants.

The decrease in Wendy’s U.S.

segment profit during 2025 was primarily due to (1) lower revenues, (2) higher cost of sales, as a percent of sales for Company-operated restaurants driven by the same factors as described above for “Cost of Sales, as a Percent of Sales” and (3) higher franchise support and other costs.

These changes were partially offset by a decrease in the Company’s funding of incremental advertising.

Wendy’s International

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The increase in Wendy’s International revenues during 2025 was primarily due to (1) net new restaurant development and (2) an increase in franchise same-restaurant sales.

Franchise same-restaurant sales increased during 2024 due to higher average check, partially offset by a decrease in customer count.

The increase in Wendy’s International segment profit during 2024 was primarily due to higher revenues, partially offset by higher franchise support and other costs.

Franchise same-restaurant sales increased during 2025 due to higher average check, partially offset by a decrease in traffic.

Wendy’s International segment profit was relatively flat in 2025 compared with 2024.

During 2025, higher general and administrative expense and higher advertising fund expense were largely offset by higher revenues.

Global Real Estate & Development

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Segment profit $ 110.4 $ 1.8 $ 108.6 $ 5.1 $ 103.5

The increase in Global Real Estate & Development revenues during 2024 was primarily due to higher franchise rental income as a result of (1) amending certain existing leases and (2) entering into new leases.

The increase in Global Real Estate & Development segment profit during 2024 was primarily due to higher revenues, partially offset by higher franchise rental expense driven by the same factors above for “Franchise Rental Expense.”

Consolidated Outlook for 2025

We expect sales at our Company-operated restaurants to be favorably impacted primarily by (1) innovation on our core menu items, (2) new offerings in fast growing categories, (3) expanding our digital sales and (4) focused execution of operational excellence anticipated to improve the customer experience.

Franchise Royalty Revenue and Fees

We expect sales at franchised restaurants to generally benefit from many of the factors described above under “Sales.” In addition, we expect franchise royalty revenue and fees to be favorably impacted by a net increase in the number of franchise restaurants in operation due to net new restaurant development.

Cost of Sales

We expect cost of sales, as a percent of sales to be favorably impacted by many of the same factors described above under “Sales,” and to also benefit from productivity and cost management initiatives.

We expect cost of sales, as a percent of sales to be negatively impacted by higher restaurant labor rates.

General and Administrative

We expect general and administrative expenses to be higher primarily due to increases in (1) employee compensation and benefits, including investments in field resources to drive operational excellence, and (2) incentive compensation.

The decrease in Global Real Estate & Development revenues during 2025 was primarily due to (1) lower development-related fees and (2) lower franchise rental income, driven by the same factors as described above for “Franchise Rental Income.”

The increase in Global Real Estate & Development segment profit during 2025 was primarily due to (1) gains on new and modified sales-type leases and (2) an increase in lease buyout activity.

These increases were partially offset by lower revenues.

Liquidity and Capital Resources

Our primary sources of liquidity and capital resources are cash flows from operations and borrowings under our securitized financing facility.

Our principal uses of cash are operating expenses, repurchases of common stock, dividends to stockholders and capital expenditures.

Our principal uses of cash are operating expenses, repurchases of common stock, capital expenditures and dividends to stockholders.

As of December 28, 2025, cash, cash equivalents and restricted cash totaled $357.7 million.

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As of December 28, 2025, the Company had $35.0 million of availability remaining under the January 2023 Authorization.

The Company expects to repurchase shares with an aggregate purchase price of up to $200.0 million during 2025, subject to market conditions.

Subsequent to December 29, 2024 through February 19, 2025, the Company repurchased 3.4 million shares under the January 2023 Authorization with an aggregate purchase price of $50.4 million, excluding applicable excise tax and commissions.

On March 15, 2024, June 17, 2024, September 17, 2024 and December 16, 2024, the Company paid quarterly cash dividends per share of $.25, aggregating $204.4 million.

On March 17, 2025, June 16, 2025, September 16, 2025 and December 15, 2025, the Company paid quarterly cash dividends per share of $.25, $.14, $.14 and $.14, respectively, aggregating $129.6 million.

On February 13, 2026, the Company announced a dividend of $.14 per share to be paid on March 16, 2026 to stockholders of record as of March 2, 2026.

Beginning in the second quarter of 2025, the Company expects to pay a quarterly dividend of $.14 per share.

As a result, the Company’s total cash requirement for dividends for all of 2025 is expected to be approximately $125.0 million.

If the Company pays regular quarterly cash dividends for the remainder of 2026 at the same rate as declared in the first quarter of 2026, the Company’s total cash requirement for dividends for all of 2026 would be approximately $106.6 million based on the number of shares of its common stock outstanding at February 16, 2026.

The Company currently intends to continue to declare and pay quarterly cash dividends;

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In 2025, cash capital expenditures amounted to $101.9 million, primarily related to digital and technology investments and various other development-related projects.

In 2025, we expect that cash capital expenditures will amount to approximately $100.0 million to $110.0 million, principally relating to (1) technology investments, including consumer-facing digital technology, (2) the opening of new Company-operated restaurants, (3) land investments and (4) various other capital projects.

In 2026, we expect that cash capital expenditures will amount to approximately $100.0 million to $110.0 million, principally relating to (1) technology investments, including consumer-facing digital technology, (2) the opening of new Company-operated restaurants and the reimaging of existing Company-operated restaurants, (3) maintenance capital expenditures for Company-operated restaurants and (4) various other capital projects.

In addition to the capital expenditures noted above, cash expenditures related to the Company’s build to suit development fund amounted to $38.4 million during 2025.

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No amounts were borrowed under the Class A-1 Notes during 2025.

We may from time to time seek to repurchase portions of our outstanding long-term debt, including our 7% debentures and/or our senior secured notes, through open market purchases, privately negotiated transactions or otherwise.

We may from time to time seek to repurchase portions of our outstanding long-term debt through open market purchases, privately negotiated transactions or otherwise.

Such repurchases, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors.

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Purchase Obligations

The Company’s purchase obligations include purchase requirements under a beverage agreement and other obligations related primarily to information technology and marketing.

The Company’s purchase obligations include purchase requirements under a beverage agreement and other obligations related primarily to information technology.

As of December 28, 2025, the Company’s purchase obligations were $253.7 million, including $93.9 million payable within 12 months.

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Effect of exchange rate changes on cash 4.4 12.5 (8.1) (10.5) 2.4

Net (decrease) increase in cash, cash equivalents and restricted cash $ (85.2) $ 157.8 $ (243.0) $ (707.8) $ 464.8

Net decrease in cash, cash equivalents and restricted cash $ (145.9) $ (60.7) $ (85.2) $ 157.8 $ (243.0)

Operating Activities

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Cash provided by operating activities was $344.5 million and $355.3 million in 2025 and 2024, respectively.

The change was primarily due to a decrease in cash paid for cloud computing arrangements (“CCA”).

The change was primarily due to (1) lower net income, adjusted for non-cash expenses, (2) the timing of the collection of royalty receivables and (3) an increase in cash paid for cloud computing arrangements.

These changes were partially offset by (1) a decrease in cash paid for income taxes and (2) the timing of payments for marketing expenses of the national advertising funds.

Investing Activities

Cash used in investing activities was $150.8 million and $129.3 million in 2025 and 2024, respectively.

The change was primarily due to (1) an increase in expenditures associated with the Company’s franchise development fund of $33.3 million and (2) an increase in capital expenditures of $9.4 million.

The change was primarily due to (1) an increase in payments for restaurant acquisitions of $16.9 million compared to the prior year, reflecting the impact of the Company’s acquisition of 35 franchise-operated restaurants during 2025 and (2) an increase in capital expenditures of $7.5 million.

Financing Activities

Cash used in financing activities was $344.0 million and $303.1 million in 2025 and 2024, respectively.

The change was primarily due to (1) a decrease in repurchases of the Company’s common stock of $112.2 million, (2) a decrease in repayments of long-term debt of $65.5 million, reflecting the impact of repurchases of the Company’s 7% debentures and Class A-2 senior secured notes during 2023, and (3) an increase in proceeds from stock option exercises of $18.2 million.

The change was primarily due to (1) an increase in repurchases of the Company’s common stock of $123.4 million and (2) a decrease in proceeds from stock option exercises of $30.9 million.

These changes were partially offset by (1) a decrease in dividends of $74.9 million and (2) a net increase in cash provided by long-term debt activities of $41.1 million, reflecting the net impacts of the completion of the Company’s debt refinancing transaction during the fourth quarter of 2025 and the Company’s full repayment of the outstanding 7% debentures.

Guarantees and Other Contingencies

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General Inflation, Commodities and Changing Prices

Inflationary pressures on labor directly impacted our consolidated results of operations during 2024, and we anticipate continued labor inflation in 2025.

Inflationary pressures on labor and commodity price increases directly impacted our consolidated results of operations during 2025, and we anticipate continued labor and commodity inflation in 2026.

We attempt to manage any inflationary costs and commodity price increases through selective menu price increases, product mix and focused execution of operational excellence.

Delays in implementing such menu price increases and competitive pressures may limit our ability to recover such cost increases in the future.

Inherent volatility experienced in certain commodity markets, such as those for beef, chicken, eggs, pork, cheese and grains, could have a significant effect on our results of operations and may have an adverse effect on us in the future.

The extent of any impact will depend on our ability to manage such volatility through product mix and selective menu price increases.

Inherent volatility experienced in certain commodity markets, such as those for beef, chicken, eggs, pork, dairy and grains, could have a significant effect on our results of operations and may have an adverse effect on us in the future.

The extent of any impact will depend on our ability to manage such volatility through selective menu price increases, product mix and focused execution of operational excellence.

Wendy’s restaurant operations are moderately seasonal.

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The guideline company method of the market approach provides an indication of value by relating the equity or invested capital (debt plus equity) of guideline companies to various measures of their earnings and cash flow, then applying such multiples to the business being valued.

The result of applying the guideline company approach is adjusted based on the incremental value

associated with a controlling interest in the business.

The result of applying the guideline company approach is adjusted based on the incremental value associated with a controlling interest in the business.

This “control premium” represents the amount a new controlling stockholder would pay for the benefits resulting from synergies and other potential benefits derived from controlling the enterprise.

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If we elect to bypass the qualitative assessment, or if a qualitative assessment indicates it is more likely than not that the estimated carrying value exceeds the fair value, we test for impairment using a quantitative process.

Our quantitative process includes comparing the carrying value to the fair value of our indefinite-lived intangible assets, with any excess recognized as an impairment loss.

Our quantitative process includes comparing the carrying value to the fair value of our

indefinite-lived intangible assets, with any excess recognized as an impairment loss.

Our critical estimates in the determination of the fair value of our indefinite-lived intangible assets include the anticipated future revenues of Company-operated and franchised restaurants and the resulting cash flows.

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If the carrying amount of the long-lived asset group is not recoverable on an undiscounted cash flow basis, then impairment is recognized to the extent that the carrying amount exceeds its fair value and is included in “Impairment of long-lived assets.” Our critical estimates in this review process include the anticipated future cash flows from leases and/or subleases or individual Company-operated restaurants, which is used in assessing the recoverability of the respective long-lived assets.

Our impairment losses principally reflect impairment charges resulting from the decision to close certain Company-operated restaurants and the deterioration in operating performance of certain other Company-operated restaurants.

Our impairment losses principally reflect impairment charges resulting from the deterioration in operating performance of certain Company-operated restaurants.

Our fair value estimates are subject to change as a result of many factors including, among others, any changes in our business plans, changing economic conditions and the competitive environment.

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When considered necessary, a valuation allowance is recorded to reduce the carrying amount of the deferred tax assets to their anticipated realizable value.

Our evaluation of the realizability of our deferred tax assets is subject to change as a result of many factors including, among others, any changes in our business plans, changing economic conditions, the competitive environment and the effect of future tax legislation.

Our evaluation of the realizability of our deferred tax assets is subject to change as a result of many factors including, among others, any changes in our business plans, changing economic

conditions, the competitive environment and the effect of future tax legislation.

Should future taxable income vary from projected taxable income, we may be required to adjust our valuation allowance in future years.

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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 7. Management’s Discussion and Analysis