What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-02-23 compared with 2025-02-21 · 276 added, 254 removed, 1475 unchanged (26% of the section changed)

6 unchanged sentences

Consolidated Statements of Operations for the years ended December 28, 2025, December 29, 2024

and January 1, 2023

Consolidated Statements of Comprehensive Income for the years ended December 29, 2024, December 31, 2023 and January 1, 2023

Consolidated Statements of Stockholders’ Equity for the years ended December 29, 2024, December 31, 2023 and January 1, 2023

and December 31, 2023

Consolidated Statements of Comprehensive Income for the years ended December 28, 2025, December 29, 2024 and December 31, 2023

Consolidated Statements of Stockholders’ Equity for the years ended December 28, 2025, December 29, 2024 and December 31, 2023

Consolidated Statements of Cash Flows for the years ended December 28, 2025, December 29, 2024

and January 1, 2023

and December 31, 2023

Notes to Consolidated Financial Statements 62

14 unchanged sentences

(15) System Optimization Gains, Net 96

(16) Acquisitions 97

(17) Reorganization and Realignment Costs 97

12 unchanged sentences

2021-1 Class A-1 Notes (9) Long-Term Debt

2021 ASR Agreement (13) Stockholders’ Equity

2021-1 Class A-2 Notes (9) Long-Term Debt

13 unchanged sentences

FASB (1) Summary of Significant Accounting Policies

February 2020 Authorization (13) Stockholders’ Equity

February 2022 Authorization (13) Stockholders’ Equity

Franchise Flip (1) Summary of Significant Accounting Policies

4 unchanged sentences

Master Issuer (9) Long-Term Debt

OBBBA (11) Income Taxes

Organizational Redesign Plan (17) Reorganization and Realignment Costs

12 unchanged sentences

TimWen (1) Summary of Significant Accounting Policies

TSR (1) Summary of Significant Accounting Policies

(1) Summary of Significant Accounting Policies

43 unchanged sentences

• We evaluated management’s ability to accurately forecast future sales growth and operating profit by comparing actual results to management’s historical forecasts.

• We performed sensitivity analyses as part of our risk assessment on future sales growth, terminal value growth rate, operating profit, and the discount rate to evaluate the impact of such sensitivity on anticipated cash flows.

• We evaluated the reasonableness of management’s future sales growth and operating profit by comparing the forecasts to (1) historical sales growth and operating profit and (2) internal communications to the senior leadership team and the Board of Directors.

• We performed sensitivity analyses on future sales growth, terminal value growth rate, operating profit, and the discount rate to evaluate the impact of such sensitivity on anticipated cash flows.

• We evaluated the reasonableness of management’s future sales growth and operating profit by comparing the forecasts to (1) historical sales growth and operating profit and (2) management’s presentations to the audit committee.

We also considered the impact of changes in management’s forecasts from the annual measurement date in the fourth quarter to December 28, 2025.

63 unchanged sentences

2025 December 29,

2023 January 1,

2024 December 31,

Sales $ 916,325 $ 925,905 $ 930,083

18 unchanged sentences

Interest expense, net ( 126,467 ) ( 123,881 ) ( 124,061 )

Gain on early extinguishment of debt, net — 2,283 —

Investment income (loss), net 11 ( 10,358 ) 2,107

(Loss) gain on early extinguishment of debt, net ( 642 ) — 2,283

Investment (loss) income, net ( 1,718 ) 11 ( 10,358 )

Other income, net 12,621 24,924 29,570

11 unchanged sentences

2025 December 29,

2023 January 1, 2023

2024 December 31, 2023

Net income $ 165,075 $ 194,357 $ 204,440

Other comprehensive (loss) income:

Other comprehensive income (loss):

Foreign currency translation adjustment 10,785 ( 16,378 ) 5,801

Other comprehensive (loss) income ( 16,378 ) 5,801 ( 15,976 )

Other comprehensive income (loss) 10,785 ( 16,378 ) 5,801

Comprehensive income $ 175,860 $ 177,979 $ 210,241

7 unchanged sentences

Net income — — 204,440 — — 204,440

Other comprehensive loss, net — — — — ( 15,976 ) ( 15,976 )

Other comprehensive income, net — — — — 5,801 5,801

Cash dividends — — ( 209,253 ) — — ( 209,253 )

Repurchases of common stock — — — ( 191,871 ) — ( 191,871 )

including accelerated share

repurchase — 18,750 — ( 70,700 ) — ( 51,950 )

Share-based compensation — 23,747 — — — 23,747

4 unchanged sentences

Other — 230 ( 73 ) 244 — 401

Balance at January 1, 2023 47,042 2,937,885 414,749 ( 2,869,780 ) ( 64,176 ) 465,720

Balance at December 31, 2023 47,042 2,960,035 409,863 ( 3,048,786 ) ( 58,375 ) 309,779

Net income — — 194,357 — — 194,357

Other comprehensive income, net — — — — 5,801 5,801

Other comprehensive loss, net — — — — ( 16,378 ) ( 16,378 )

Cash dividends — — ( 204,443 ) — — ( 204,443 )

8 unchanged sentences

Net income — — 165,075 — — 165,075

Other comprehensive loss, net — — — — ( 16,378 ) ( 16,378 )

Other comprehensive income, net — — — — 10,785 10,785

Cash dividends — — ( 129,587 ) — — ( 129,587 )

12 unchanged sentences

2025 December 29,

2023 January 1,

2024 December 31,

Cash flows from operating activities:

8 unchanged sentences

Change in operating lease liabilities ( 49,230 ) ( 48,911 ) ( 47,212 )

Net (recognition) receipt of deferred vendor incentives ( 586 ) 1,034 ( 1,060 )

Net receipt (recognition) of deferred vendor incentives 1,534 ( 586 ) 1,034

System optimization gains, net ( 1,030 ) ( 1,219 ) ( 880 )

17 unchanged sentences

Franchise development fund ( 38,410 ) ( 41,246 ) ( 7,951 )

Acquisitions ( 16,854 ) — —

Dispositions 4,410 4,946 2,115

11 unchanged sentences

Payments related to tax withholding for share-based compensation ( 2,839 ) ( 4,485 ) ( 3,873 )

Net cash (used in) provided by financing activities ( 303,098 ) ( 504,303 ) 288,674

Net cash (used in) provided by operations before effect of exchange rate changes on cash ( 77,096 ) ( 245,433 ) 470,802

Net cash used in financing activities ( 343,986 ) ( 303,098 ) ( 504,303 )

Net cash used in operations before effect of exchange rate changes on cash ( 150,275 ) ( 77,096 ) ( 245,433 )

Effect of exchange rate changes on cash 4,339 ( 8,112 ) 2,448

Net (decrease) increase in cash, cash equivalents and restricted cash ( 85,208 ) ( 242,985 ) 464,835

Net decrease in cash, cash equivalents and restricted cash ( 145,936 ) ( 85,208 ) ( 242,985 )

Cash, cash equivalents and restricted cash at beginning of period 503,608 588,816 831,801

23 unchanged sentences

Actual results could differ materially from those estimates.

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.

Reclassifications

Certain reclassifications have been made to the prior year presentation to conform to the current year presentation.

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.

9 unchanged sentences

Such restricted cash primarily represents cash collections and cash reserves held by the trustee to be used for payments of principal, interest and commitment fees required for the Company’s senior secured notes.

Restricted cash also includes cash collected by the Advertising Funds, usage of which is restricted for advertising activities and is included in “Advertising funds restricted assets.” Refer to Note 2 for further information.

Accounts and Notes Receivable, Net

Accounts and notes receivable, net, consist primarily of royalties, rents, property taxes and franchise fees due principally from franchisees, credit card receivables, insurance receivables and refundable income taxes.

Accounts and notes receivable, net, consist primarily of royalties, rents, property taxes and franchise fees due principally from franchisees, refundable income taxes, credit card receivables and insurance receivables.

Reserve estimates include consideration of the likelihood of default expected over the estimated life of the receivable.

31 unchanged sentences

If the carrying value of the reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit.

The fair value of the reporting unit is determined by management and is based on the results of (1) estimates we made regarding the present value of the anticipated cash flows associated with each reporting unit and/or (2) the indicated value of the reporting units based on a comparison and correlation of the Company and other similar companies.

Our critical estimates in this impairment test include future sales growth, operating profit, terminal value growth rates and the weighted average cost of capital (discount rate).

13 unchanged sentences

one to five years for computer software;

two to 20 years for reacquired rights under franchise agreements;

and 20 years for franchise agreements.

Trademarks have an indefinite life and are not amortized.

THE WENDY’S COMPANY AND SUBSIDIARIES

1 unchanged sentence

(In Thousands Except Per Share Amounts)

20 years for reacquired rights under franchise agreements;

and 20 years for franchise agreements.

Trademarks have an indefinite life and are not amortized.

The Company reviews definite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the intangible asset may not be recoverable.

7 unchanged sentences

The Company has significant influence over these investees.

Such investments are accounted for using the equity method, under which our results of operations include our share of the income (loss) of the investees in “Other operating income, net.” Cash distributions and dividends received that are determined to be returns of capital are recorded as a reduction of the carrying value of our investments and returns on our investments are recorded to “Investment income (loss), net.”

The difference between the carrying value of our TimWen equity investment and the underlying equity in the historical net assets of the investee is accounted for as if the investee were a consolidated subsidiary.

8 unchanged sentences

The Company recognizes share-based compensation expense over the requisite service period unless the awards are subject to performance conditions, in which case we recognize compensation expense over the requisite service period to the extent performance conditions are considered probable.

Certain of the performance-based awards also include a relative Total Shareholder Return (“TSR”) modifier to determine the number of shares earned at the end of the performance period.

The Company determines the grant date fair value of stock options using a Black-Scholes-Merton option pricing model (the “Black-Scholes Model”).

The grant date fair value of restricted share awards (“RSAs”), restricted share units (“RSUs”) and performance-based awards are determined using the fair market value of the Company’s common stock on the date of grant, as set forth in the applicable plan document, unless the awards are subject to market conditions, in which case we use a Monte Carlo simulation model.

The grant date fair values of market condition awards, as well as performance condition awards that include a relative TSR modifier, are estimated using the Monte Carlo simulation model.

The Monte Carlo simulation model utilizes multiple input variables to estimate the probability that market conditions will be achieved.

THE WENDY’S COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands Except Per Share Amounts)

Foreign Currency Translation

2 unchanged sentences

Net gains or losses resulting from the translation are recorded to the “Foreign currency translation adjustment” component of “Accumulated other comprehensive loss.” Gains and losses arising from the impact of foreign currency exchange rate fluctuations on transactions in foreign currency are included in “General and administrative.”

THE WENDY’S COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands Except Per Share Amounts)

The Company accounts for income taxes under the asset and liability method.

24 unchanged sentences

See “Revenue Recognition” below for further information.

THE WENDY’S COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands Except Per Share Amounts)

Revenue Recognition

4 unchanged sentences

Gift card payments are recorded as deferred income when received and are recognized as revenue upon redemption.

“Franchise royalty revenue and fees” includes royalties, new build technical assistance fees, renewal fees, franchisee-to- franchisee restaurant transfer (“Franchise Flip”) technical assistance fees, Franchise Flip advisory fees, development fees and

THE WENDY’S COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands Except Per Share Amounts)

information technology and other fees.

Royalties from franchised restaurants are based on a percentage of sales of the franchised restaurant and are recognized as earned.

21 unchanged sentences

These costs primarily relate to franchise development services, facilitating Franchise Flips and information technology services, which are charged to “Franchise support and other costs,” as incurred.

The provision for doubtful accounts related to receivables from franchisees is also included in “Franchise support and other costs.”

Self-Insurance

1 unchanged sentence

The Company provides for their estimated cost to settle both known claims and claims incurred but not yet reported.

Liabilities associated with these claims are estimated, in part, by considering the frequency and severity of historical claims, both specific to us, as well as industry-wide loss experience and other actuarial assumptions.

We determine our insurance obligations with the assistance of actuarial firms.

Since there are many estimates and assumptions involved in recording insurance liabilities and in the case of workers’ compensation a significant period of time elapses before the ultimate resolution of claims, differences between actual future events and prior estimates and assumptions could result in adjustments to these liabilities.

Liabilities associated with these claims are estimated, in part, by considering the frequency and severity of historical claims, both specific to us, as

THE WENDY’S COMPANY AND SUBSIDIARIES

1 unchanged sentence

(In Thousands Except Per Share Amounts)

well as industry-wide loss experience and other actuarial assumptions.

We determine our insurance obligations with the assistance of actuarial firms.

Determination of Whether a Contract Contains a Lease

26 unchanged sentences

(1) rental expense related to leases for Company-operated restaurants is recorded to “Cost of sales,” (2) rental expense for leased properties that are subsequently subleased to franchisees is recorded to “Franchise rental expense” and (3) rental expense related to leases for corporate offices and equipment is recorded to “General and administrative.”

Favorable and unfavorable lease amounts for operating leases where the Company is the lessor are recorded as components of “Other intangible assets” and “Other liabilities,” respectively.

Favorable and unfavorable lease amounts are amortized on a straight-line basis over the term of the leases.

THE WENDY’S COMPANY AND SUBSIDIARIES

1 unchanged sentence

(In Thousands Except Per Share Amounts)

operating leases are recognized on a gross basis as “Franchise rental income” with a corresponding expense recorded to “Franchise rental expense.”

Favorable and unfavorable lease amounts for operating leases where the Company is the lessor are recorded as components of “Other intangible assets” and “Other liabilities,” respectively.

Favorable and unfavorable lease amounts are amortized on a straight-line basis over the term of the leases.

Rental income and favorable and unfavorable lease amortization for operating leases on properties leased or subleased to franchisees is recorded to “Franchise rental income.” Lessees’ variable payments to the Company for executory costs under operating leases are recognized on a gross basis as “Franchise rental income” with a corresponding expense recorded to “Franchise rental expense.”

Finance Leases

18 unchanged sentences

territories, with the largest number in Canada.

restaurants are located in 50 states and the District of Columbia, with the largest number in Florida, Texas, Ohio, California, Georgia, North Carolina, Pennsylvania and New York.

restaurants are located in 50 states and the District of Columbia,

THE WENDY’S COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands Except Per Share Amounts)

with the largest number in Florida, Texas, Ohio, California, Georgia, North Carolina, Pennsylvania and New York.

Because our restaurant operations are generally located throughout the U.S.

4 unchanged sentences

dollar for our Canadian operations.

THE WENDY’S COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands Except Per Share Amounts)

However, our exposure to Canadian dollar foreign currency risk is mitigated by the fact that there are no Company-operated restaurants in Canada and less than 10 % of Wendy’s franchised restaurants are in Canada.

4 unchanged sentences

New Accounting Standards Adopted

Common-Control Lease Arrangements

In March 2023, the Financial Accounting Standards Board (“FASB”) issued an update to amend certain lease accounting guidance that applies to arrangements between related parties under common control.

The amendment requires a lessee in a common-control lease arrangement to amortize leasehold improvements that it owns over the useful life of the improvements to the common-control group, regardless of the lease term, if the lessee continues to control the use of the underlying asset through a lease.

The Company adopted this amendment during the first quarter of 2024.

The adoption of this amendment did not have a material impact on our consolidated financial statements.

Reportable Segment Disclosures

In November 2023, the FASB issued an amendment to expand reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

In addition, the amendment enhances interim disclosure requirements, clarifies circumstances in which an entity can disclose multiple segment measures of profit or loss and provides new segment disclosure requirements for entities with a single reportable segment.

The Company adopted this amendment during the fourth quarter of 2024.

The adoption of this amendment did not have a material impact on our consolidated financial statements.

Refer to Note 25 for the expanded reportable segment disclosures.

New Accounting Standards

Income Tax Disclosures

In December 2023, the FASB issued an amendment to enhance its income tax disclosure requirements.

In December 2023, the Financial Accounting Standards Board (“FASB”) issued an amendment to enhance its income tax disclosure requirements.

The amendment requires annual disclosure of specific categories in the rate reconciliation and additional information for reconciling items that meet a quantitative threshold.

The amendment also requires annual disclosure of income taxes paid disaggregated by federal, state and foreign taxes and by individual jurisdictions in which income taxes paid is equal to or greater than 5% of total income taxes paid.

The Company adopted this amendment retrospectively during the fourth quarter of 2025.

The adoption of this amendment did not have a material impact on our consolidated financial statements.

See Note 11 for the expanded income tax disclosures.

New Accounting Standards

Narrow-Scope Improvements of Interim Reporting Requirements

In December 2025, the FASB issued an amendment to improve the navigability of the required interim disclosures and to provide guidance on what disclosures should be provided in interim reporting periods.

The amendment is effective commencing with our 2028 fiscal year.

We are currently evaluating the impact of the adoption of this guidance on our consolidated financial statements.

Accounting for and Disclosure of Software Costs

In September 2025, the FASB issued an amendment to modernize the accounting for costs related to internal-use software, improving the operability of the guidance by removing all references to software development project stages so that the guidance is neutral to different software development methods.

The amendment is effective commencing with our 2028 fiscal year.

We are currently evaluating the impact of the adoption of this guidance on our consolidated financial statements.

Measurement of Credit Losses for Accounts Receivable and Contract Assets

In July 2025, the FASB issued an amendment to provide a practical expedient related to the estimation of expected credit losses for current accounts receivable and current contract assets for revenue arising from contracts with customers.

The amendment is effective commencing with our 2026 fiscal year.

The Company does not expect the guidance to have a material impact on our consolidated financial statements.

Disaggregation of Income Statement Expenses

30 unchanged sentences

(a) Includes income tax refund receivables of $ 17,055 and $ 3,587 as of December 28, 2025 and December 29, 2024, respectively.

Additionally, as of December 31, 2023, included receivables of $ 17,460 related to expected contributions from applicable insurance for legal settlements.

See Note 8 for further information on our legal reserves.

(b) Includes the current portion of sales-type and direct financing lease receivables of $ 10,932 and $ 9,377 as of December 28, 2025 and December 29, 2024, respectively.

3 unchanged sentences

See Note 7 for further information.

As of December 31, 2023, included a note receivable from a franchisee in Indonesia of $ 394 .

The note was repaid during 2024.

THE WENDY’S COMPANY AND SUBSIDIARIES

9 unchanged sentences

$ 18,448 $ 2,444 $ 20,892

Balance at January 1, 2023

Balance at December 31, 2023

$ 1,538 $ 1,149 $ 2,687

7 unchanged sentences

Uncollectible accounts written off, net of recoveries ( 703 ) ( 3,077 ) ( 3,780 )

Balance at January 1, 2023

Balance at December 31, 2023

$ 1,538 $ 1,149 $ 2,687

5 unchanged sentences

The initial term may be extended up to 25 years at the franchisee’s option.

The franchise agreement requires that the franchisee pay a royalty based on a percentage of sales at the franchised restaurant, as well as make contributions to the Advertising Funds based on a percentage of sales.

The franchise agreement requires that the franchisee pay a royalty based on a percentage of sales at the franchised restaurant, as well as make contributions to the applicable Advertising Fund based on a percentage of sales.

Wendy’s may offer development incentive programs from time to time that provide for a discount or lesser royalty amount or Advertising Fund contribution for a limited period of time.

121 unchanged sentences

Right-of-use assets obtained in exchange for lease obligations:

Finance lease liabilities 47,014 20,243 34,478

Finance lease liabilities (a) 115,252 47,014 20,243

Operating lease liabilities 22,111 41,423 12,659

_______________

(a) 2025 includes finance lease liabilities assumed as part of the Company’s acquisition of 35 franchise-operated restaurants.

See Note 16 for further information.

The following table includes supplemental information related to leases:

77 unchanged sentences

International Global Real Estate & Development Total

Balance at January 1, 2023:

Balance at December 31, 2023:

Goodwill, gross $ 620,603 $ 39,973 $ 122,548 $ 783,124

8 unchanged sentences

Changes in goodwill:

Restaurant acquisitions 1,249 — — 1,249

Currency translation adjustment — 1,371 — 1,371

42 unchanged sentences

As of December 28, 2025 and December 29, 2024, the Company had reserves of $ 2,444 and $ 2,149 , respectively, on the receivables related to the Brazil JV.

The Company is currently pursuing collection of certain of the past due amounts.

The Company is currently pursuing collection of the past due amounts.

See Note 2 for further information.

5 unchanged sentences

(In Thousands Except Per Share Amounts)

Presented below is activity related to our investment in TimWen included in our consolidated balance sheets and consolidated statements of operations as of and for the years ended December 29, 2024, December 31, 2023 and January 1, 2023.

2025 2024 2023

5 unchanged sentences

Foreign currency translation adjustment included in

“Other comprehensive (loss) income”

“Other comprehensive income (loss)”

1,503 ( 2,638 ) 888

5 unchanged sentences

During the year ended January 1, 2023, the Company recognized a gain of $ 2,107 as a result of an observable price change for a similar investment of the same issuer.

During the year ended December 31, 2023, the Company recorded impairment charges of $ 10,389 for the difference between the estimated fair value and the carrying value of the investment.

During 2025 and 2023, the Company recorded impairment charges of $ 1,718 and $ 10,389 , respectively, for the difference between the estimated fair value and the carrying value of the investment.

As a result, the carrying value of the investment was zero as of December 28, 2025.

(8) Accrued Expenses and Other Current Liabilities

2 unchanged sentences

Accrued taxes 28,138 28,497

Legal reserves (a) 2,913 19,699

Other 48,654 44,417

$ 116,655 $ 118,224

_______________

(a) The Company maintains insurance coverage to help mitigate against a variety of risks, including claims and litigation.

The Company’s legal reserve may include amounts that are covered by applicable insurance, in which case any expected insurance receivables are included in “Accounts and notes receivable, net.” See Note 2 for further information.

THE WENDY’S COMPANY AND SUBSIDIARIES

7 unchanged sentences

$ 450,000 $ —

4.535 % Series 2022-1 Class A-2-II Notes, anticipated repayment date 2032

386,134 390,134

4.236 % Series 2022-1 Class A-2-I Notes, anticipated repayment date 2029

6 unchanged sentences

620,530 627,030

3.783 % Series 2019-1 Class A-2-I Notes, repaid in connection with the December 2025 refinancing

4.080 % Series 2019-1 Class A-2-II Notes, anticipated repayment date 2029

394,123 398,623

7 % debentures, due in 2025

3.884 % Series 2018-1 Class A-2-II Notes, anticipated repayment date 2028

431,599 436,349

7 % debentures, repaid at December 2025 maturity date

Unamortized debt issuance costs ( 28,903 ) ( 26,698 )

2 unchanged sentences

Total long-term debt $ 2,730,502 $ 2,662,130

Aggregate annual maturities of long-term debt, excluding the effect of purchase accounting adjustments, as of December 29, 2024 were as follows:

Aggregate annual maturities of long-term debt as of December 28, 2025 were as follows:

2026 $ 29,750

3 unchanged sentences

(i) 2025-1 Class A-2-I with an initial principal amount of $ 450,000 ;

(ii) 2022-1 Class A-2-II with an initial principal amount of $ 400,000 (collectively, the 2022-1 Class A-2-I Notes and the 2022-1 Class A-2-II Notes are referred to herein as the “2022-1 Class A-2 Notes”);

(iii) 2021-1 Class A-2-I with an initial principal amount of $ 450,000 ;

(iv) 2021-1 Class A-2-II with an initial principal amount of $ 650,000 ;

(v) 2019-1 Class A-2-I with an initial principal amount of $ 400,000 ;

(ii) 2022-1 Class A-2-I with an initial principal amount of $ 100,000 ;

(iii) 2022-1 Class A-2-II with an initial principal amount of $ 400,000 ;

(iv) 2021-1 Class A-2-I with an initial principal amount of $ 450,000 ;

(v) 2021-1 Class A-2-II with an initial principal amount of $ 650,000 (collectively, the 2021-1 Class A-2-I Notes and the 2021-1 Class A-2-II Notes are referred to herein as the “2021-1 Class A-2 Notes”);

(vi) 2019-1 Class A-2-II with an initial principal amount of $ 450,000 ;

2 unchanged sentences

As a result, the Company recognized a gain on early extinguishment of debt of $ 3,914 for the year ended December 31, 2023.

In connection with the issuance of the 2021-1 Class A-2-I and 2021-1 Class A-2-II Notes, the Master Issuer also entered into a revolving financing facility of 2021-1 Variable Funding Senior Secured Notes, Class A-1 (the “2021-1 Class A-1 Notes”), which allows for the drawing of up to $ 300,000 on a revolving basis using various credit instruments, including a letter

In connection with the issuance of the 2021-1 Class A-2 Notes, the Master Issuer also entered into a revolving financing facility of 2021-1 Variable Funding Senior Secured Notes, Class A-1 (the “2021-1 Class A-1 Notes”), which allows for the drawing of up to $ 300,000 on a revolving basis using various credit instruments, including a letter of credit facility.

THE WENDY’S COMPANY AND SUBSIDIARIES

1 unchanged sentence

(In Thousands Except Per Share Amounts)

of credit facility.

As of December 29, 2024, the Company had no outstanding borrowings under the 2021-1 Class A-1 Notes.

December 28, 2025, the Company had no outstanding borrowings under the 2021-1 Class A-1 Notes.

The Class A-2 Notes and the 2021-1 Class A-1 Notes are collectively referred to as the “Senior Notes.”

The Senior Notes are secured by a security interest in substantially all of the assets of the Master Issuer and certain other limited-purpose, bankruptcy-remote, wholly-owned indirect subsidiaries of the Company that act as guarantors (collectively, the “Securitization Entities”), except for certain real estate assets and subject to certain limitations as set forth in the indenture governing the Senior Notes (the “Indenture”) and the related guarantee and collateral agreements.

The assets of the Securitization Entities include most of the domestic and certain of the foreign revenue-generating assets of the Company and its subsidiaries, which principally consist of franchise-related agreements, certain Company-operated restaurants, intellectual property and license agreements for the use of intellectual property.

The assets of the Securitization Entities include most of the domestic and certain of the foreign revenue-generating assets of the Company and its subsidiaries, which principally consist of franchise-related agreements, assets related to certain Company-operated restaurants, including certain real estate assets, intellectual property and license agreements for the use of intellectual property.

Interest and principal payments on the Class A-2 Notes are payable on a quarterly basis.

8 unchanged sentences

The Senior Notes are subject to a series of covenants and restrictions customary for transactions of this type, including (i) that the Master Issuer maintains specified reserve accounts to be used to make required payments in respect of the Senior Notes, (ii) provisions relating to optional and mandatory prepayments and the related payment of specified amounts, including specified make-whole payments in the case of the Class A-2 Notes under certain circumstances, (iii) certain indemnification payments in the event, among other things, the assets pledged as collateral for the Senior Notes are in stated ways defective or ineffective and (iv) covenants relating to recordkeeping, access to information and similar matters.

The Senior Notes are also subject to customary rapid amortization events provided for in the Indenture, including events tied to failure to maintain stated debt service coverage ratios, the sum of global gross sales for specified restaurants being below certain levels on certain measurement dates, certain manager termination events, an event of default, and the failure to repay or refinance the Class A-2 Notes on the applicable scheduled maturity date.

The Senior Notes are also subject to customary rapid amortization events provided for in the Indenture, including events tied to a failure to maintain stated debt service coverage ratios, the sum of global gross sales for specified restaurants being below certain levels on certain measurement dates, certain manager termination events, an event of default, and the failure to repay or refinance the Class A-2 Notes on the applicable scheduled maturity date.

The Senior Notes are also subject to certain customary events of default, including events relating to non-payment of required interest, principal, or other amounts due on or with respect to the Senior Notes, failure to comply with covenants within certain time frames, certain bankruptcy events, breaches of specified representations and warranties, failure of security interests to be effective, and certain judgments.

2 unchanged sentences

As of December 28, 2025 and December 29, 2024, Wendy’s Funding had restricted cash of $ 38,800 and $ 34,089 , respectively, which primarily represents cash collections and cash reserves held by the trustee to be used for payments of principal, interest and commitment fees required for the Class A-2 Notes.

Debt Financing

In April 2022, the Master Issuer completed a debt financing transaction under which the Company issued the 2022-1 Class A-2 Notes with an initial principal amount of $ 500,000 .

The legal final maturity date of the 2022-1 Class A-2 Notes is March 2052 and the anticipated repayment dates are in 2029 and 2032.

THE WENDY’S COMPANY AND SUBSIDIARIES

1 unchanged sentence

(In Thousands Except Per Share Amounts)

Refinancing Transaction

In December 2025, the Master Issuer completed a refinancing transaction under which the Master Issuer issued the Series 2025-1 Class A-2-I Notes.

A portion of the net proceeds from the sale of the Series 2025-1 Class A-2-I Notes was used to repay in full the Master Issuer’s outstanding Series 2019-1 Class A-2-I Notes and Wendy’s 7 % debentures, including the payment of transaction costs.

As a result of the refinancing, the Company recorded a loss on early extinguishment of debt of $ 642 during 2025, which was comprised of the write-off of certain unamortized deferred financing costs.

Debt Issuance Costs

During 2022, the Company incurred debt issuance costs of $ 10,232 in connection with the issuance of the 2022-1 Class A-2 Notes.

During 2025, the Company incurred debt issuance costs of $ 9,671 in connection with the December 2025 refinancing transaction.

The debt issuance costs are being amortized to “Interest expense, net” through the anticipated repayment dates of the Class A-2 Notes utilizing the effective interest rate method.

As of December 29, 2024, the effective interest rates, including the amortization of debt issuance costs, were 4.1 %, 4.0 %, 4.3 %, 2.6 %, 2.9 %, 4.7 % and 4.7 % for the Series 2018-1 Class A-2-II Notes, Series 2019-1 Class A-2-I Notes, Series 2019-1 Class A-2-II Notes, Series 2021-1 Class A-2-I Notes, Series 2021-1 Class A-2-II Notes, Series 2022-1 Class A-2-I Notes and Series 2022-1 Class A-2-II Notes, respectively.

As of December 28, 2025, the effective interest rates, including the amortization of debt issuance costs, were 4.1 %, 4.3 %, 2.6 %, 2.9 %, 4.7 %, 4.7 % and 5.7 % for the Series 2018-1 Class A-2-II Notes, Series 2019-1 Class A-2-II Notes, Series 2021-1 Class A-2-I Notes, Series 2021-1 Class A-2-II Notes, Series 2022-1 Class A-2-I Notes, Series 2022-1 Class A-2-II Notes and Series 2025-1 Class A-2-I Notes, respectively.

Other Long-Term Debt

Wendy’s 7 % debentures are unsecured and were reduced to fair value in connection with the Wendy’s Merger based on their outstanding principal of $ 100,000 and an effective interest rate of 8.6 %.

The fair value adjustment is being accreted and the related charge included in “Interest expense, net” until the debentures mature.

These debentures contain covenants that restrict the incurrence of indebtedness secured by liens and certain finance lease transactions.

Wendy’s 7 % debentures were unsecured and were reduced to fair value in connection with the Wendy’s Merger based on their outstanding principal of $ 100,000 and an effective interest rate of 8.6 %.

The fair value adjustment was accreted and the related charge included in “Interest expense, net” until the debentures matured.

These debentures contained covenants that restricted the incurrence of indebtedness secured by liens and certain finance lease transactions.

In December 2019, Wendy’s repurchased $ 10,000 in principal of its 7 % debentures for $ 10,550 , including a premium of $ 500 and transaction fees of $ 50 .

1 unchanged sentence

As a result, the Company recognized a loss on early extinguishment of debt of $ 1,631 during 2023.

During 2025, Wendy’s fully repaid the remaining outstanding principal of $ 49,570 at the December 2025 maturity date.

A Canadian subsidiary of Wendy’s has a revolving credit facility of C$ 6,000 , which bears interest at the Bank of Montreal Prime Rate.

3 unchanged sentences

Borrowings under the line of credit are guaranteed by Wendy’s.

As of December 29, 2024, the Company had no outstanding borrowings under the advertising fund revolving line of credit.

During the three months ended March 30, 2025, the Company borrowed and repaid $ 15,000 and $ 8,500 , respectively, under the revolving line of credit.

During the three months ended June 29, 2025, the Company borrowed an additional $ 8,500 under the revolving line of credit.

During the three months ended December 28, 2025, the Company repaid $ 5,000 under the revolving line of credit, then subsequently borrowed and repaid $ 2,000 and $ 12,000 , respectively, under the revolving line of credit.

As a result, as of December 28, 2025, the Company had no outstanding borrowings under the advertising fund revolving line of credit.

Interest Expense

Interest expense on the Company’s long-term debt was $ 109,523 , $ 110,038 and $ 112,659 during 2025, 2024 and 2023, respectively, which was recorded to “Interest expense, net.”

THE WENDY’S COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands Except Per Share Amounts)

Pledged Assets

6 unchanged sentences

Other intangible assets 962,676

THE WENDY’S COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands Except Per Share Amounts)

(10) Fair Value Measurements

9 unchanged sentences

The inputs into the determination of fair value require significant management judgment or estimation.

THE WENDY’S COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands Except Per Share Amounts)

Financial Instruments

8 unchanged sentences

Series 2025-1 Class A-2-I Notes 450,000 447,075 — — Level 2

Series 2022-1 Class A-2-I Notes 96,500 95,284 97,500 93,744 Level 2

Series 2022-1 Class A-2-II Notes 382,134 371,625 386,134 371,855 Level 2

52 unchanged sentences

Foreign 571 152 ( 1,920 )

Deferred tax benefit (provision) 5,529 807 ( 4,305 )

Deferred tax (provision) benefit ( 23,461 ) 5,529 807

Income tax provision $ ( 62,171 ) $ ( 78,056 ) $ ( 74,978 )

36 unchanged sentences

2025 2024 2023

Income tax provision at the U.S.

federal statutory rate $ ( 57,207 ) 21.0 % $ ( 58,678 ) 21.0 % $ ( 51,136 ) 21.0 %

State income tax provision, net of U.S.

federal income tax effect (a) ( 15,717 ) 5.8 % ( 11,400 ) 4.1 % ( 11,616 ) 4.8 %

Prior years’ tax matters 78 0.0 % ( 2,250 ) 0.8 % 2,290 ( 0.9 ) %

Excess federal tax benefits from share-based compensation 113 0.0 % 845 ( 0.3 ) % 402 ( 0.2 ) %

Foreign and U.S.

tax effects of foreign operations 457 ( 0.2 ) % 1,799 ( 0.6 ) % ( 3,744 ) 1.6 %

Valuation allowances ( 3,323 ) 1.2 % ( 3,533 ) 1.3 % 2,127 ( 0.9 ) %

federal statutory tax rate (21%) $ 47,722 21.0 % $ 57,207 21.0 % $ 58,678 21.0 %

State and local income taxes, net of federal income tax effect 9,284 4.1 % 14,455 5.3 % 10,401 3.7 %

Foreign tax effects 1,137 0.5 % 2,106 0.8 % 2,687 1.0 %

Effects of cross-border tax laws ( 335 ) ( 0.1 ) % ( 1,669 ) ( 0.6 ) % ( 2,403 ) ( 0.9 ) %

Tax credits ( 931 ) ( 0.4 ) % ( 899 ) ( 0.3 ) % ( 1,050 ) ( 0.4 ) %

Non-deductible executive compensation ( 2,698 ) 1.0 % ( 2,863 ) 1.0 % ( 3,154 ) 1.3 %

Unrepatriated earnings ( 655 ) 0.2 % ( 387 ) 0.1 % ( 294 ) 0.1 %

Non-deductible expenses and other ( 3 ) 0.0 % 439 ( 0.2 ) % ( 2,395 ) 1.0 %

Changes in valuation allowance:

Foreign tax credits 4,320 1.9 % 4,274 1.5 % 2,761 1.0 %

Other 359 0.2 % — 0.0 % 1,739 0.6 %

Nontaxable or nondeductible items 987 0.4 % 2,626 1.0 % 1,581 0.6 %

Other adjustments ( 372 ) ( 0.2 ) % ( 44 ) 0.0 % 584 0.2 %

$ 62,171 27.4 % $ 78,056 28.7 % $ 74,978 26.8 %

In 2025, state and local income taxes in Michigan, Florida, Georgia and California comprised the majority (greater than 50%) of the tax effect in the state and local income taxes, net of federal income tax effect category.

In 2024, state and local income taxes in Louisiana, Florida and Illinois comprised the majority of the tax effect in the state and local income taxes, net of federal income tax category.

In 2023, state and local income taxes in Florida, Illinois and Massachusetts comprised the majority of the tax effect in the state and local income taxes, net of federal income tax effect category.

THE WENDY’S COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands Except Per Share Amounts)

The income taxes paid (net of refunds) by jurisdiction are set forth below:

2025 2024 2023

(a) The change in state effective tax rate during 2024 was driven primarily by state rate law changes.

federal $ 29,859 $ 52,774 $ 53,057

state 10,558 12,476 15,716

Foreign 8,697 8,350 6,417

Total $ 49,114 $ 73,600 $ 75,190

Income taxes paid (net of refunds) exceeded 5% of total income taxes paid (net of refunds) in the following jurisdictions:

2025 2024 2023

Florida $ 3,210 $ 3,777 $ 4,300

Illinois $ 2,497 * *

Canada $ 8,562 $ 8,192 $ 6,300

_______________

* The amount of income taxes paid during the year does not meet the 5% disaggregation threshold.

The Company participates in the Internal Revenue Service (the “IRS”) Compliance Assurance Process (“CAP”).

3 unchanged sentences

The statute of limitations in these jurisdictions vary but generally income tax returns from its 2020 fiscal year and forward remain subject to examination.

We believe that adequate

THE WENDY’S COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands Except Per Share Amounts)

provisions have been made for any liabilities, including interest and penalties that may result from the completion of these examinations.

We believe that adequate provisions have been made for any liabilities, including interest and penalties that may result from the completion of these examinations.

Unrecognized Tax Benefits

5 unchanged sentences

Tax positions of prior years (a) 5,832 — —

Tax positions of prior years (b) ( 583 ) ( 2,069 ) ( 690 )

Settlements — — ( 249 )

2 unchanged sentences

_______________

(a) Reduction in uncertain tax benefits related to tax positions of prior years during 2024 was primarily driven by a non-recurring state rate law change.

During 2025, we believe it is reasonably possible the Company will reduce unrecognized tax benefits by up to $ 1,024 due primarily to the lapse of statutes of limitations and expected settlements.

During 2024, 2023 and 2022, the Company recognized expense (income) for interest of $ 376 , $ 134 and $( 30 ), respectively.

(a) Increase in uncertain tax benefits related to tax positions of prior years during 2025 was primarily driven by adjustments to state income tax positions.

THE WENDY’S COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands Except Per Share Amounts)

(b) Reduction in uncertain tax benefits related to tax positions of prior years during 2024 was primarily driven by a non-recurring state rate law change.

During 2025, 2024 and 2023, the Company recognized (income) expense for interest of $( 214 ), $ 376 and $ 134 , respectively.

The Company has $ 1,141 and $ 1,355 accrued for interest related to uncertain tax positions as of December 28, 2025 and December 29, 2024, respectively.

One Big Beautiful Bill Act

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted.

Key provisions include the permanent extension of several business tax incentives originally established under the 2017 Tax Cuts and Jobs Act, as well as changes to provisions related to bonus depreciation, and research and development.

The OBBBA resulted in an impact to the Company’s current and deferred tax assets and liabilities as of December 28, 2025, as well as a favorable impact on the amount of cash taxes paid during 2025.

(12) Net Income Per Share

9 unchanged sentences

Diluted $ .85 $ .95 $ .97

THE WENDY’S COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands Except Per Share Amounts)

Basic net income per share for 2025, 2024 and 2023 was computed by dividing net income amounts by the weighted average number of shares of common stock outstanding.

3 unchanged sentences

During 2025, 2024 and 2023, the Company paid dividends per share of $ .67 , $ 1.00 and $ 1.00 , respectively.

THE WENDY’S COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands Except Per Share Amounts)

Treasury Stock

15 unchanged sentences

As of December 28, 2025, the Company had $ 35,000 of availability remaining under the January 2023 Authorization.

Subsequent to December 29, 2024 through February 19, 2025, the Company repurchased 3,391 shares under the January 2023 Authorization with an aggregate purchase price of $ 50,393 , excluding applicable excise tax and commissions.

During 2024, the Company repurchased 4,305 shares under the January 2023 Authorization with an aggregate purchase price of $ 75,000 , excluding excise tax of $ 564 and commissions of $ 60 .

During 2024, the Company paid $ 1,742 in excise tax on shares repurchased during 2023.

During 2023, the Company repurchased 9,107 shares under the January 2023 Authorization with an aggregate purchase price of $ 190,000 , of which $ 573 was accrued as of December 31, 2023, and excluding excise tax of $ 1,744 and commissions of $ 127 .

In February 2022, our Board of Directors authorized a repurchase program for up to $ 100,000 of our common stock through February 28, 2023, when and if market conditions warranted and to the extent legally permissible (the “February 2022 Authorization”).

In April 2022, the Company’s Board of Directors approved an increase of $ 150,000 to the February 2022 Authorization, resulting in an aggregate authorization of $ 250,000 that was set to expire on February 28, 2023.

During 2022, the Company repurchased 2,759 shares under the February 2022 Authorization with an aggregate purchase price of $ 51,911 , excluding commissions of $ 39 .

In connection with the January 2023 Authorization, the remaining portion of the February 2022 Authorization was canceled.

In February 2020, our Board of Directors authorized a repurchase program for up to $ 100,000 of our common stock through February 28, 2021, when and if market conditions warranted and to the extent legally permissible (the “February 2020 Authorization”).

In July 2020, the Company’s Board of Directors approved an extension of the February 2020 Authorization

THE WENDY’S COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands Except Per Share Amounts)

by one year, through February 28, 2022.

In addition, during 2021, the Board of Directors approved increases totaling $ 200,000 to the February 2020 Authorization, resulting in an aggregate authorization of $ 300,000 that continued to expire on February 28, 2022.

In November 2021, the Company entered into an accelerated share repurchase agreement (the “2021 ASR Agreement”) with a third-party financial institution to repurchase common stock as part of the February 2020 Authorization.

Under the 2021 ASR Agreement, the Company paid the financial institution an initial purchase price of $ 125,000 in cash and received an initial delivery of 4,910 shares of common stock, representing an estimated 85 % of the total shares expected to be delivered under the 2021 ASR Agreement.

In February 2022, the Company completed the 2021 ASR Agreement and received an additional 715 shares of common stock.

The total number of shares of common stock ultimately purchased by the Company under the 2021 ASR Agreement was based on the average of the daily volume-weighted average prices of the common stock during the term of the 2021 ASR Agreement, less an agreed upon discount.

In total, 5,625 shares were delivered under the 2021 ASR Agreement at an average purchase price of $ 22.22 per share.

Preferred Stock

6 unchanged sentences

Balance at end of period $ ( 63,968 ) $ ( 74,753 ) $ ( 58,375 )

THE WENDY’S COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands Except Per Share Amounts)

(14) Share-Based Compensation

7 unchanged sentences

Stock Options

The Company grants stock options that have maximum contractual terms of 10 years and vest ratably over three years .

The Company grants stock options that have maximum contractual terms of 10 years and primarily vest ratably over three years .

The exercise price of options granted is equal to the market price of the Company’s common stock on the date of grant.

1 unchanged sentence

The aggregate intrinsic value of an option is the amount by which the fair value of the underlying stock exceeds its exercise price.

THE WENDY’S COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands Except Per Share Amounts)

The following table summarizes stock option activity during 2025:

26 unchanged sentences

The expected dividend yield represents the Company’s annualized average yield for regular quarterly dividends declared prior to the respective stock option grant dates.

THE WENDY’S COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands Except Per Share Amounts)

The Black-Scholes Model has limitations on its effectiveness including that it was developed for use in estimating the fair value of traded options which have no vesting restrictions and are fully transferable and that the model requires the use of highly subjective assumptions, such as expected stock price volatility.

5 unchanged sentences

The fair value of Restricted Shares granted is determined using the fair market value of the Company’s common stock on the date of grant, as set forth in the applicable plan document.

THE WENDY’S COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands Except Per Share Amounts)

The following table summarizes activity of Restricted Shares during 2025:

13 unchanged sentences

The quantity of shares awarded ranges from 0 % to 200 % of “Target,” as defined in the award agreement as the midpoint number of shares, based on the level of achievement of the performance and market conditions.

The fair values of the performance condition awards granted in 2024, 2023 and 2022 were determined using the fair market value of the Company’s common stock on the date of grant, as set forth in the applicable plan document.

Certain of the performance-based awards also include a relative TSR modifier to determine the number of shares earned at the end of the performance period.

The grant date fair values of performance condition awards are determined using the fair market value of the Company’s common stock on the date of grant, as set forth in the applicable plan document.

Share-based compensation expense recorded for performance condition awards is reevaluated at each reporting period based on the probability of the achievement of the goal.

The fair value of market condition awards granted in 2024, 2023 and 2022 were estimated using the Monte Carlo simulation model.

The grant date fair values of market condition awards, as well as performance condition awards that include a relative TSR modifier, are estimated using the Monte Carlo simulation model.

The Monte Carlo simulation model utilizes multiple input variables to estimate the probability that the market conditions will be achieved and is applied to the trading price of our common stock on the date of grant.

THE WENDY’S COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands Except Per Share Amounts)

The input variables are noted in the table below:

7 unchanged sentences

Share-based compensation expense is recorded ratably for market condition awards during the requisite service period and is not reversed, except for forfeitures, at the vesting date regardless of whether the market condition is met.

THE WENDY’S COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands Except Per Share Amounts)

The following table summarizes activity of performance shares at Target during 2025:

Performance Condition Awards Market Condition Awards

Shares Weighted

Grant Date Fair Value Shares Weighted

Grant Date Fair Value

3 unchanged sentences

Dividend equivalent units issued (a) 75 —

Vested (b) ( 213 ) 20.21 — —

Vested ( 68 ) 21.97

Forfeited ( 1,049 ) 19.97

1 unchanged sentence

_______________

(a) Dividend equivalent units are issued in lieu of cash dividends for non-vested performance shares.

There is no weighted average fair value associated with dividend equivalent units.

(b) Performance condition awards exclude the vesting of an additional 45 shares, which resulted from the performance of the awards exceeding Target.

The total fair value of performance condition awards that vested in 2024, 2023 and 2022 was $ 4,683 , $ 2,105 and $ 1,712 , respectively.

The total fair value of market condition awards that vested in 2023 and 2022 was $ 2,138 and $ 2,253 , respectively.

No market condition awards vested in 2024.

The total fair value of performance-based awards that vested in 2025, 2024 and 2023 was $ 1,028 , $ 4,683 and $ 4,243 , respectively.

Share-Based Compensation

4 unchanged sentences

Performance shares 436 4,333 6,557

Performance condition awards 480 2,524 4,431

Market condition awards 3,853 4,033 3,929

Share-based compensation 14,573 23,019 23,747

6 unchanged sentences

(15) System Optimization Gains, Net

The Company’s system optimization initiative included a shift from Company-operated restaurants to franchised restaurants over time, through acquisitions and dispositions, as well as facilitating Franchise Flips.

As of December 29, 2024, Company-operated restaurant ownership was approximately 5 % of the total system.

While the Company has no plans to move its ownership away from approximately 5 % of the total system, the Company expects to continue to optimize the Wendy’s system through Franchise Flips, as well as evaluating strategic acquisitions of franchised restaurants and strategic dispositions of Company-operated restaurants to existing and new franchisees, to further strengthen the franchisee base and drive new restaurant development.

During 2024, 2023 and 2022, the Company facilitated 50 , 99 and 79 Franchise Flips, respectively.

Additionally, during 2024, the Company completed the sale of three Company-operated restaurants to franchisees and, during 2022, the Company completed the sale of one Company-operated restaurant to a franchisee.

The Company optimizes the Wendy’s system by facilitating Franchise Flips, evaluating strategic acquisitions of franchised restaurants and strategic dispositions of Company-operated restaurants to existing and new franchisees and, at times, closing certain underperforming restaurants, to further strengthen the franchisee base, support franchisee economics and drive new restaurant development.

During 2025, 2024 and 2023, the Company facilitated one , 50 and 99 Franchise Flips, respectively.

During 2025 and 2024, the Company completed the sale of five and three Company-operated restaurants to franchisees, respectively.

No Company-operated restaurants were sold to franchisees during 2023.

See Note 16 for further information regarding the Company’s acquisition of 35 franchise-operated restaurants during 2025.

Gains and losses recognized on dispositions are recorded to “System optimization gains, net” in our consolidated statements of operations.

3 unchanged sentences

Number of restaurants sold to franchisees 5 3 —

Proceeds from sales of restaurants (a) $ 1,808 $ — $ 79

Net assets sold (b) ( 1,081 ) — ( 141 )

Net unfavorable leases — — ( 360 )

Proceeds from sales of restaurants $ 180 $ 1,808 $ —

Net assets sold (a) ( 169 ) ( 1,081 ) —

Other ( 150 ) ( 1 ) —

( 139 ) 726 —

Post-closing adjustments on sales of restaurants (c) 694 858 2,877

Gain on sales of restaurants, net 1,420 858 2,461

(Loss) gain on sales of other assets, net (d) ( 201 ) 22 4,318

Post-closing adjustments on sales of restaurants (b) ( 16 ) 694 858

(Loss) gain on sales of restaurants, net ( 155 ) 1,420 858

Gain (loss) on sales of other assets, net (c) 1,185 ( 201 ) 22

System optimization gains, net $ 1,030 $ 1,219 $ 880

_______________

(a) In addition to the proceeds noted herein, the Company received cash proceeds of $ 378 during 2022 related to a note receivable issued in connection with restaurants previously sold to a franchisee.

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

(c) 2024, 2023 and 2022 include the recognition of deferred gains of $ 800 , $ 858 and $ 3,522 , respectively, as a result of the resolution of certain contingencies related to the extension of lease terms for restaurants previously sold to franchisees.

(d) During 2024, 2023 and 2022, the Company received cash proceeds of $ 3,138 , $ 2,115 and $ 7,780 , respectively, primarily from the sale of surplus and other properties.

THE WENDY’S COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands Except Per Share Amounts)

(a) Net assets sold during 2025 consisted primarily of equipment.

Net assets sold during 2024 consisted primarily of land and equipment.

(b) 2024 and 2023 include the recognition of deferred gains of $ 800 and $ 858 , respectively, as a result of the resolution of certain contingencies related to the extension of lease terms for restaurants previously sold to franchisees.

(c) During 2025, 2024 and 2023, the Company received cash proceeds of $ 4,230 , $ 3,138 and $ 2,115 , respectively, primarily from the sale of surplus and other properties.

Assets Held for Sale

1 unchanged sentence

Assets held for sale are included in “Prepaid expenses and other current assets.”

THE WENDY’S COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands Except Per Share Amounts)

(16) Acquisitions

During 2025, the Company acquired 35 restaurants from a franchisee.

The Company did not incur any material acquisition-related costs associated with the acquisition and the transaction was not significant to our consolidated financial statements.

The table below presents the allocation of the total purchase price to the fair value of assets acquired and liabilities assumed for restaurants acquired from a franchisee:

Restaurants acquired from franchisee 35

Total consideration paid, net of cash received $ 16,854

Identifiable assets acquired and liabilities assumed:

Properties 8,026

Acquired franchise rights 7,583

Finance lease assets 43,109

Operating lease assets 7,826

Finance lease liabilities ( 43,717 )

Operating lease liabilities ( 7,370 )

Total identifiable net assets 15,605

Goodwill $ 1,249

_______________

(a) The fair value of assets acquired and liabilities assumed related to restaurants acquired in the third quarter of 2025 were provisional amounts as of September 28, 2025, pending final purchase accounting adjustments.

The Company finalized the purchase price allocation during the fourth quarter of 2025, which resulted in an increase in properties of $ 1,787 and a decrease in acquired franchise rights of $ 569 .

(17) Reorganization and Realignment Costs

6 unchanged sentences

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.

Additionally, in January 2024, the Board of Directors announced the appointment of a new President and Chief Executive Officer and the departure of the Company’s previous President and Chief Executive Officer.

The Company expects to incur total costs of approximately $ 17,000 related to the Organizational Redesign Plan, including costs related to the 2024 succession of the President and Chief Executive Officer role.

During 2025, the Company recognized costs totaling $( 753 ), which primarily included a reversal of a severance accrual.

During 2024 and 2023, the Company recognized costs totaling $ 8,367 and $ 9,064 , respectively, which primarily included severance and related employee costs and share-based compensation.

The Company expects to incur additional costs aggregating approximately $ 600 , comprised primarily of share-based compensation.

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

THE WENDY’S COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands Except Per Share Amounts)

The following is a summary of the costs recorded as a result of the Organizational Redesign Plan:

8 unchanged sentences

(a) Primarily represents the accelerated recognition of share-based compensation resulting from the termination of employees under the Organizational Redesign Plan.

THE WENDY’S COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands Except Per Share Amounts)

As of December 29, 2024, the accruals for the Organizational Redesign Plan are included in “Accrued expenses and other current liabilities” and “Other liabilities” and totaled $ 3,872 and $ 385 , respectively.

As of December 31, 2023, the accruals for the Organizational Redesign Plan were included in “Accrued expenses and other current liabilities.” The tables below present a rollforward of our accruals for the Organizational Redesign Plan.

As of December 28, 2025, the accruals for the Organizational Redesign Plan are included in “Accrued expenses and other current liabilities.” As of December 29, 2024, the accruals for the Organizational Redesign Plan were included in “Accrued expenses and other current liabilities” and “Other liabilities” and totaled $ 3,872 and $ 385 , respectively.

The tables below present a rollforward of our accruals for the Organizational Redesign Plan.

Balance December 29, 2024

4 unchanged sentences

$ 4,257 $ ( 1,157 ) $ ( 2,722 ) $ 378

January 1, 2023

December 31, 2023

Charges Payments Balance

9 unchanged sentences

The Company records impairment charges as a result of (1) the deterioration in operating performance or anticipated closures of certain Company-operated restaurants, (2) the Company’s decision to lease and/or sublease properties to franchisees in connection with the sale or anticipated sale of Company-operated restaurants, including any subsequent lease modifications, and (3) classifying surplus properties as held for sale.

THE WENDY’S COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands Except Per Share Amounts)

The following is a summary of impairment losses recorded, which represent the excess of the carrying amount over the fair value of the affected assets and are included in “Impairment of long-lived assets:”

8 unchanged sentences

In connection with the matching contributions, the Company recognized compensation expense of $ 6,718 , $ 6,228 and $ 5,947 in 2025, 2024 and 2023, respectively.

THE WENDY’S COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands Except Per Share Amounts)

(20) Supplemental Cash Flow Information

1 unchanged sentence

2025 December 29,

2023 January 1,

2024 December 31,

Long-term debt-related activities, net:

Gain on early extinguishment of debt $ — $ ( 2,283 ) $ —

Loss (gain) on early extinguishment of debt $ 642 $ — $ ( 2,283 )

Accretion of long-term debt 657 675 755

9 unchanged sentences

2025 December 29,

2023 January 1,

2024 December 31,

Cash and cash equivalents $ 300,833 $ 450,512 $ 516,037

3 unchanged sentences

Franchise Development Fund

In August 2021, the Company announced the creation of a strategic build to suit development fund to drive additional new restaurant growth.

The Company maintains a strategic build to suit development fund to drive additional new restaurant growth.

Capital expenditures related to the fund are included in “Franchise development fund” in the consolidated statements of cash flows.

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(21) Guarantees and Other Commitments and Contingencies

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

In July and September 2024, Wendy’s announced a new development incentive structure in the U.S.

and Canada and select international markets, respectively, that provides for reductions in royalty and national advertising fees for qualifying new restaurants for two, three or four years of operation based on the number of restaurants committed to under a development agreement.

Franchisees who open a restaurant on or before November 30th of the calendar year prior to the restaurant’s required open date receive a technical assistance fee waiver.

Wendy’s also provides franchisees with its base-level incentive that provides for reductions in royalty and national advertising fees for up to the first two years of operation for qualifying approved replacement restaurants.

From time to time, Wendy’s may modify these incentive programs.

For example, subsequent to December 29, 2024, Wendy’s announced that it is offering the highest-level incentive, which provides for fee reductions for four years, to all new and existing U.S.

franchisees for a limited period of time under certain circumstances.

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and Canada, Wendy’s offers incentives to new and existing franchisees who enter into development agreements to build new restaurants on a mutually agreed schedule.

These incentives typically include reduced royalty and national advertising fees and may include full or partial waivers of the upfront technical assistance fee for each restaurant opened.

Similarly, in markets outside of the U.S.

and Canada, Wendy’s provides incentives for qualifying restaurants under new franchise or license agreements, generally in the form of reduced royalty fees and full or partial waivers of the technical assistance fee.

Existing franchisees in these markets may also receive comparable incentives when they amend their franchise agreement or enter into a new development agreement to commit to building new restaurants on an agreed schedule.

Lease Guarantees

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Purchase and Capital Commitments

The Company has material purchase requirements under a beverage agreement with a vendor, a marketing agreement with two national broadcasters and an information technology agreement with a vendor.

The Company has material purchase requirements under a beverage agreement and information technology agreements with certain vendors.

In August 2024, the Company amended its contract with the beverage vendor, which now expires upon reaching a threshold usage requirement or, if certain undertakings are not fulfilled, at the later of reaching a threshold usage requirement or December 31, 2034.

Our total purchase requirements under the beverage, marketing and information technology agreements are estimated to be approximately $ 119,500 over the remaining life of the contracts.

Our total purchase requirements under the beverage and information technology agreements are estimated to be approximately $ 143,000 over the remaining life of the contracts.

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(22) Transactions with Related Parties

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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

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agreements with pricing based upon total system volume.

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 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 U.S.

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Should QSCC’s sourcing fees exceed its expected needs, QSCC’s board of directors may return some or all of the excess to its members in the form of a patronage dividend.

Wendy’s recorded its share of patronage dividends of $ 3,493 in 2024, of which $ 2,909 is included in “Other operating income, net” and $ 584 is included as a reduction of “Cost of sales.” Wendy’s recorded its share of patronage dividends of $ 363 and $ 427 in 2023 and 2022, respectively, which are included as a reduction of “Cost of sales.”

(b) Pursuant to a lease agreement, Wendy’s leased 14,493 square feet of office space to QSCC for an annual base rent of $ 217 .

The lease was amended in June 2021 to increase both the leased square footage to 18,774 and the annual base rent to $ 250 beginning in 2023, subject to annual increases, and to extend the lease term through January 31, 2027.

Wendy’s recorded its share of patronage dividends of $ 118 and $ 363 in 2025 and 2023, respectively, which are included as a reduction of “Cost of sales.” Wendy’s recorded its share of patronage dividends of $ 3,493 in 2024, of which $ 2,909 is included in “Other operating income, net” and $ 584 is included as a reduction of “Cost of sales.”

(b) Pursuant to a lease agreement, Wendy’s leased 18,774 square feet of office space to QSCC for an annual base rent of $ 250 , subject to annual increases.

The lease expires on January 31, 2027.

The Company received lease payments from QSCC of $ 289 , $ 277 and $ 231 during 2025, 2024 and 2023, respectively, which has been recorded to “Franchise rental income.”

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Wendy’s paid TimWen $ 21,265 , $ 21,409 and $ 20,894 under these lease agreements during 2025, 2024 and 2023, respectively, which has been recorded to “Franchise rental expense.” In addition, TimWen paid Wendy’s a management fee under the TimWen joint venture agreement of $ 232 , $ 237 and $ 241 during 2025, 2024 and 2023, respectively, which has been included as a reduction to “General and administrative.”

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Transactions with Yellow Cab

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Peter May, our Senior Vice Chairman, and Mr.

Matthew Peltz, our Vice Chairman, hold minority ownership interests in Yellow Cab Holdings, LLC (“Yellow Cab”), a Wendy’s franchisee that, as of December 29, 2024 owned and operated 89 Wendy’s restaurants, and/or certain of the operating companies managed by Yellow Cab.

Matthew Peltz, our former Vice Chairman, hold minority ownership interests in Yellow Cab Holdings, LLC (“Yellow Cab”), a Wendy’s franchisee that, as of December 28, 2025 owned and operated 88 Wendy’s restaurants, and/or certain of the operating companies managed by Yellow Cab.

In addition, Mr.

Bradley Peltz, a director of the Company, is a Managing Director of, and holds a minority ownership interest in, Yellow Cab.

During 2025, 2024 and 2023, the Company recognized $ 15,197 , $ 15,417 and $ 14,757 , respectively, in royalty, advertising fund, lease and other income from Yellow Cab and related entities.

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Transactions with AMC

(e) In February 2023, Ms.

Kristin Dolan, a director of the Company, was appointed as Chief Executive Officer of AMC Networks Inc.

Kristin Dolan, a director of the Company, serves as the Chief Executive Officer of AMC Networks Inc.

During 2025, 2024 and 2023, the Company purchased approximately $ 800 , $ 2,010 and $ 2,366 , respectively, of advertising time from a subsidiary of AMC.

The Company’s advertising spend with AMC was made in the ordinary course of business and approved on an arm’s-length basis, consistent with the Company’s comparable advertising decisions.

As of December 29, 2024 and December 31, 2023, approximately $ 17 and $ 584 , respectively, was due to AMC for advertising time, which is included in “Advertising funds restricted liabilities.”

As of December 29, 2024, approximately $ 17 was due to AMC for advertising time, which is included in “Advertising funds restricted liabilities.” There were no amounts due to AMC as of December 28, 2025.

(23) Legal and Environmental Matters

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We provide accruals for such litigation and claims when we determine it is probable that a liability has been incurred and the loss is reasonably estimable.

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believes it has adequate accruals for all of our legal and environmental matters.

The Company believes it has adequate accruals for all of our legal and environmental matters.

We cannot estimate the aggregate possible range of loss for our existing litigation and claims due to various reasons, including, but not limited to, many proceedings being in preliminary stages, with various motions either yet to be submitted or pending, discovery yet to occur, and significant factual matters unresolved.

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In addition to the contributions to the Advertising Funds, Company-operated and franchised restaurants make additional contributions to other local and regional advertising programs.

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Restricted assets and liabilities of the Advertising Funds at December 28, 2025 and December 29, 2024 are as follows:

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Properties 830,492 60,588 891,080

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(26) Segment Information

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The Company measures profit using segment adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”), which excludes certain unallocated general and administrative expenses and other items that vary from period to period without correlation to the Company’s core operating performance.

The Company’s President and Chief Executive Officer is the chief operating decision maker (the “CODM”) and uses segment adjusted EBITDA predominantly in periodic reviews of performance and during the annual budget and forecasting process.

The Company’s Interim Chief Executive Officer and Chief Financial Officer is the chief operating decision maker (the “CODM”) and uses segment adjusted EBITDA predominantly in periodic reviews of performance and during the annual budget and forecasting process.

The CODM considers segment adjusted EBITDA when making decisions about allocating resources to the segments.

When the CODM reviews balance sheet information, it is at a consolidated level.

When the CODM reviews

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balance sheet information, it is at a consolidated level.

The accounting policies of the Company’s segments are the same as those described in Note 1.

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(a) Includes advertising fund expense of $ 20,000 and $ 11,000 for 2024 and 2022, respectively, related to the Company funding of incremental advertising.

There was no funding of incremental advertising during 2023.

(b) Other segment items primarily include lease buyout activity for 2024, 2023 and 2022.

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(a) Includes advertising fund expense of $ 20,000 for 2024 related to the Company’s funding of incremental advertising.

There was no funding of incremental advertising during 2025 and 2023.

(b) Other segment items for 2025 primarily include professional fees.

Other segment items for 2024 and 2023 primarily include lease buyout activity.

Wendy’s International revenue, significant segment expenses and segment adjusted EBITDA are as follows:

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(b) Other segment items primarily include franchise support and other costs.

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Global Real Estate & Development revenue, significant segment expenses and segment adjusted EBITDA are as follows:

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_______________

(a) Other segment items primarily include equity in earnings from our TimWen joint venture, franchise support and other costs and gains on sales-type leases.

(a) Other segment items primarily include equity in earnings from our TimWen joint venture, franchise support and other costs and gains on sales-type leases for 2025, 2024 and 2023.

Other segment items for 2025 also include lease buyout activity.

Equity in earnings from our TimWen joint venture was $ 11,215 , $ 11,607 and $ 10,819 for 2025, 2024 and 2023, respectively.

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The following table reconciles profit by segment to the Company’s consolidated income before income taxes:

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Unallocated franchise support and other costs ( 2,239 ) ( 1,316 ) ( 831 )

Advertising funds surplus (deficit) 2,702 4,344 ( 8,325 )

Advertising funds surplus 2,816 2,702 4,344

Unallocated general and administrative (a) ( 122,354 ) ( 134,195 ) ( 132,344 )

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Interest expense, net ( 126,467 ) ( 123,881 ) ( 124,061 )

Gain on early extinguishment of debt — 2,283 —

Investment income (loss), net 11 ( 10,358 ) 2,107

(Loss) gain on early extinguishment of debt ( 642 ) — 2,283

Investment (loss) income, net ( 1,718 ) 11 ( 10,358 )

Other income, net 12,621 24,924 29,570

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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 8. Financial Statements and Supplementary Data