WENDY'S CO, 10-K filed on 2/26/2020
Annual Report
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Document and Entity Information - USD ($)
$ in Millions
 12 Months Ended
Dec. 29, 2019
Feb. 18, 2020
Jun. 28, 2019
Document and Entity Information [Abstract]      
Document Type 10-K    
Document Annual Report true    
Document Period End Date Dec. 29, 2019    
Document Transition Report false    
Entity File Number 1-2207    
Entity Registrant Name THE WENDY’S COMPANY    
Entity Incorporation, State or Country Code DE    
Entity Tax Identification Number 38-0471180    
Entity Address, Address Line One One Dave Thomas Blvd.    
Entity Address, Postal Zip Code 43017    
Entity Address, City or Town Dublin,    
Entity Address, State or Province OH    
City Area Code 614    
Local Phone Number 764-3100    
Title of 12(b) Security Common Stock, $.10 par value    
Trading Symbol WEN    
Security Exchange Name NASDAQ    
Entity Well-known Seasoned Issuer Yes    
Entity Voluntary Filers No    
Entity Central Index Key 0000030697    
Current Fiscal Year End Date --12-29    
Entity Current Reporting Status Yes    
Entity Interactive Data Current Yes    
Entity Filer Category Large Accelerated Filer    
Entity Small Business false    
Entity Emerging Growth Company false    
Document Fiscal Year Focus 2019    
Document Fiscal Period Focus FY    
Amendment Flag false    
Entity Shell Company false    
Entity Common Stock, Shares Outstanding   223,032,261  
Entity Public Float     $ 3,631.8
v3.19.3.a.u2
Consolidated Balance Sheets - USD ($)
$ in Thousands
Dec. 29, 2019
Dec. 30, 2018
Current assets:    
Cash and cash equivalents $ 300,195 $ 431,405
Restricted cash 34,539 29,860
Accounts and notes receivable, net 117,461 109,805
Inventories 3,891 3,687
Prepaid expenses and other current assets 15,585 14,452
Advertising funds restricted assets 82,376 76,509
Total current assets 554,047 665,718
Properties 977,000 1,023,267
Finance lease assets 200,144  
Finance lease assets   189,969
Operating lease assets 857,199  
Goodwill 755,911 747,884
Other intangible assets 1,247,212 1,294,153
Investments 45,949 47,660
Net investment in sales-type and direct financing leases 256,606  
Net investment in sales-type and direct financing leases   226,477
Other assets 100,461 96,907
Total assets 4,994,529 4,292,035
Current liabilities:    
Current portion of long-term debt 22,750 23,250
Current portion of finance lease liabilities 11,005  
Current portion of finance lease liabilities   8,405
Current portion of operating lease liabilities 43,775  
Accounts payable 22,701 21,741
Accrued expenses and other current liabilities 165,272 150,636
Advertising funds restricted liabilities 84,195 80,153
Total current liabilities 349,698 284,185
Long-term debt 2,257,561 2,305,552
Long-term finance lease liabilities 480,847  
Long-term finance lease liabilities   447,231
Long-term operating lease liabilities 897,737  
Deferred income taxes 270,759 269,160
Deferred franchise fees 91,790 92,232
Other liabilities 129,778 245,226
Total liabilities 4,478,170 3,643,586
Commitments and contingencies
Stockholders’ equity:    
Common stock, $0.10 par value; 1,500,000 shares authorized; 470,424 shares issued; 224,889 and 231,233 shares outstanding, respectively 47,042 47,042
Additional paid-in capital 2,874,001 2,884,696
Retained earnings 185,725 146,277
Common stock held in treasury, at cost; 245,535 and 239,191 shares, respectively (2,536,581) (2,367,893)
Accumulated other comprehensive loss (53,828) (61,673)
Total stockholders’ equity 516,359 648,449
Total liabilities and stockholders’ equity $ 4,994,529 $ 4,292,035
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Consolidated Balance Sheets Balance Sheet Parentheticals - $ / shares
shares in Thousands
Dec. 29, 2019
Dec. 30, 2018
Statement of Financial Position [Abstract]    
Common Stock, Par Value $ 0.10 $ 0.10
Common Stock, Shares Authorized 1,500,000 1,500,000
Common Stock, Shares Issued 470,424 470,424
Common Stock, Shares, Outstanding 224,889 231,233
Treasury Stock, Shares 245,535 239,191
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Consolidated Statements of Operations - USD ($)
$ in Thousands
 12 Months Ended
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Revenues      
Franchise rental income $ 233,065    
Franchise rental income   $ 203,297 $ 190,103
Revenues 1,709,002 1,589,936 1,223,408
Costs and expenses:      
Cost of sales 597,530 548,588 517,935
Franchise support and other costs 43,686 25,203 16,325
Franchise rental expense 123,929 91,104 88,015
Advertising funds expense 338,116 321,866 0
General and administrative 200,206 217,489 203,593
Depreciation and amortization 131,693 128,879 125,687
System optimization (gains) losses, net (1,283) (463) 39,076
Reorganization and realignment costs 16,965 9,068 22,574
Impairment of long-lived assets 6,999 4,697 4,097
Other operating income, net (11,418) (6,387) (8,652)
Costs and expenses 1,446,423 1,340,044 1,008,650
Operating profit 262,579 249,892 214,758
Interest expense, net (115,971) (119,618) (118,059)
Loss on early extinguishment of debt (8,496) (11,475) 0
Investment income, net 25,598 450,736 2,703
Other income, net 7,771 5,381 1,617
Income before income taxes 171,481 574,916 101,019
(Provision for) benefit from income taxes (34,541) (114,801) 93,010
Net Income $ 136,940 $ 460,115 $ 194,029
Earnings Per Share      
Earnings Per Share, Basic $ 0.60 $ 1.93 $ 0.79
Earnings Per Share, Diluted $ 0.58 $ 1.88 $ 0.77
Sales      
Revenues      
Revenue from Contract with Customer, Excluding Assessed Tax $ 707,485 $ 651,577 $ 622,802
Franchise royalty revenue and fees      
Revenues      
Revenue from Contract with Customer, Excluding Assessed Tax 428,999 409,043 410,503
Advertising funds revenue      
Revenues      
Revenue from Contract with Customer, Excluding Assessed Tax $ 339,453 $ 326,019 $ 0
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Consolidated Statements of Comprehensive Income - USD ($)
$ in Thousands
 12 Months Ended
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Net income $ 136,940 $ 460,115 $ 194,029
Other comprehensive income (loss), net:      
Foreign currency translation adjustment 7,845 (16,524) 15,150
Change in unrecognized pension loss; Unrealized gains arising during the period 0 156 156
Change in unrecognized pension loss; Income tax provision 0 (39) (60)
Change in unrecognized pension loss; Final settlement of pension liability 0 932 0
Change in unrecognized pension loss; Unrealized gains arising during the period, net of tax 0 1,049 96
Effect of cash flow hedges; Reclassification of losses into Net Income 0 0 2,894
Effect of cash flow hedges; Income tax provision 0 0 (1,097)
Effect of cash flow hedges; Reclassification of losses into Net Income, net of tax 0 0 1,797
Other comprehensive income (loss), net 7,845 (15,475) 17,043
Comprehensive income $ 144,785 $ 444,640 $ 211,072
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Consolidated Statements of Stockholders' Equity - USD ($)
$ in Thousands
Total
Common Stock
Additional Paid-In Capital
Retained Earnings (Accumulated Deficit)
Common Stock Held in Treasury
Accumulated Other Comprehensive Loss
Increase (Decrease) in Stockholders' Equity            
Cumulative effect of change in accounting principle $ 1,880 $ 0 $ 0 $ 1,880 $ 0 $ 0
Stockholders' Equity, beginning of period at Jan. 01, 2017 527,736 47,042 2,878,589 (290,857) (2,043,797) (63,241)
Increase (Decrease) in Stockholders' Equity            
Net income 194,029 0 0 194,029 0 0
Other comprehensive income (loss), net 17,043 0 0 0 0 17,043
Cash dividends (68,322) 0 0 (68,322) 0 0
Repurchases of common stock (127,490) 0 0 0 (127,490) 0
Share-based compensation 20,928 0 20,928 0 0 0
Common stock issued upon exercises of stock options 12,696 0 (3,959) 0 16,655 0
Common stock issued upon vesting of restricted shares (5,497) 0 (9,683) 0 4,186 0
Other 200 0 80 (19) 139 0
Stockholders' Equity, end of period at Dec. 31, 2017 573,203 47,042 2,885,955 (163,289) (2,150,307) (46,198)
Increase (Decrease) in Stockholders' Equity            
Cumulative effect of change in accounting principle (70,210) 0 0 (70,210) 0 0
Net income 460,115 0 0 460,115 0 0
Other comprehensive income (loss), net (15,475) 0 0 0 0 (15,475)
Cash dividends (80,532) 0 0 (80,532) 0 0
Repurchases of common stock (270,377) 0 0 0 (270,377) 0
Share-based compensation 17,918 0 17,918 0 0 0
Common stock issued upon exercises of stock options 38,819 0 (9,582) 0 48,401 0
Common stock issued upon vesting of restricted shares (5,431) 0 (9,711) 0 4,280 0
Other 419 0 116 193 110 0
Stockholders' Equity, end of period at Dec. 30, 2018 648,449 47,042 2,884,696 146,277 (2,367,893) (61,673)
Increase (Decrease) in Stockholders' Equity            
Cumulative effect of change in accounting principle (1,105) 0 0 (1,105) 0 0
Net income 136,940 0 0 136,940 0 0
Other comprehensive income (loss), net 7,845 0 0 0 0 7,845
Cash dividends (96,364) 0 0 (96,364) 0 0
Repurchases of common stock (217,771) 0 (15,000) 0 (202,771) 0
Share-based compensation 18,676 0 18,676 0 0 0
Common stock issued upon exercises of stock options 28,136 0 (808) 0 28,944 0
Common stock issued upon vesting of restricted shares (8,627) 0 (13,677) 0 5,050 0
Other 180 0 114 (23) 89 0
Stockholders' Equity, end of period at Dec. 29, 2019 $ 516,359 $ 47,042 $ 2,874,001 $ 185,725 $ (2,536,581) $ (53,828)
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Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
 12 Months Ended
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Cash flows from operating activities:      
Net income $ 136,940 $ 460,115 $ 194,029
Adjustments to reconcile net income to net cash provided by operating activities:      
Depreciation and amortization 131,693 128,879 125,687
Share-based compensation 18,676 17,918 20,928
Impairment of long-lived assets 6,999 4,697 4,097
Deferred income tax 837 (6,568) (119,330)
Non-cash rental expense (income), net 28,202 (17,043) (11,822)
Change in operating lease liabilities (41,911) 0 0
Net (recognition) receipt of deferred vendor incentives (501) 139 1,901
System optimization (gains) losses, net (1,283) (463) 39,076
Gain on sale of investments, net (24,496) (450,000) (2,570)
Distributions received from TimWen joint venture 13,400 13,390 11,713
Equity in earnings in joint ventures, net (8,673) (8,076) (7,573)
Long-term debt-related activities, net (see below) 15,317 18,673 12,075
Other, net (4,838) 5,178 1,253
Changes in operating assets and liabilities:      
Accounts and notes receivable, net 16,935 13,226 (17,340)
Inventories (163) (434) (305)
Prepaid expenses and other current assets (1,569) 6,824 (3,488)
Advertising funds restricted assets and liabilities (2,720) 13,955 (12,230)
Accounts payable 1,054 (145) (2,290)
Accrued expenses and other current liabilities 5,034 23,963 4,982
Net cash provided by operating activities 288,933 224,228 238,793
Cash flows from investing activities:      
Capital expenditures (74,453) (69,857) (81,710)
Acquisitions (5,052) (21,401) (86,788)
Dispositions 3,448 3,223 81,516
Proceeds from sale of investment 24,496 450,000 4,111
Notes receivable, net (3,370) 959 (9,000)
Payments for investments 0 13 375
Net cash (used in) provided by investing activities (54,931) 362,911 (92,246)
Cash flows from financing activities:      
Proceeds from long-term debt 850,000 934,837 31,130
Repayments of long-term debt (899,800) (894,501) (52,593)
Repayments of finance lease liabilities (6,835)    
Repayments of finance lease liabilities   (5,571) (5,520)
Deferred financing costs (14,008) (17,340) (1,424)
Repurchases of common stock, including accelerated share repurchase (217,797) (269,809) (126,231)
Dividends (96,364) (80,532) (68,322)
Proceeds from stock option exercises 28,328 45,228 12,884
Payments related to tax withholding for share-based compensation (8,820) (11,805) (5,721)
Contingent consideration payment 0 (6,269) 0
Net cash used in financing activities (365,296) (305,762) (215,797)
Net cash (used in) provided by operations before effect of exchange rate changes on cash (131,294) 281,377 (69,250)
Effect of exchange rate changes on cash 3,489 (7,689) 6,125
Net (decrease) increase in cash, cash equivalents, and restricted cash (127,805) 273,688 (63,125)
Cash, cash equivalents and restricted cash at beginning of period 486,512 212,824 275,949
Cash, cash equivalents and restricted cash at end of period 358,707 486,512 212,824
Long-term debt-related activities, net:      
Loss on early extinguishment of debt 8,496 11,475 0
Accretion of long-term debt 1,272 1,255 1,237
Amortization of deferred financing costs 5,549 5,943 7,944
Reclassification of unrealized losses on cash flow hedges 0 0 2,894
Long-term debt-related activities, net: 15,317 18,673 12,075
Cash paid for:      
Interest 138,270 137,607 128,989
Income taxes, net of refunds 34,798 102,827 29,311
Supplemental non-cash investing and financing activities:      
Capital expenditures included in accounts payable 6,026 6,460 5,810
Finance leases 50,061    
Finance leases   6,569 276,971
Reconciliation of cash, cash equivalents and restricted cash at end of period:      
Total cash, cash equivalents and restricted cash $ 358,707 $ 486,512 $ 275,949
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Summary of Significant Accounting Policies
 12 Months Ended
Dec. 29, 2019
Accounting Policies [Abstract]  
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies Summary of Significant Accounting Policies

Corporate Structure

The Wendy’s Company (“The Wendy’s Company” and, together with its subsidiaries, the “Company,” “we,” “us,” or “our”) is the parent company of its 100% owned subsidiary holding company, Wendy’s Restaurants, LLC (“Wendy’s Restaurants”). Wendy’s Restaurants is the parent company of Wendy’s International, LLC and its subsidiaries (“Wendy’s”). Wendy’s franchises and operates Wendy’s quick-service restaurants specializing in hamburger sandwiches throughout the United States of America (“U.S.”) and also franchises Wendy’s quick-service restaurants in 30 foreign countries and U.S. territories. At December 29, 2019, Wendy’s operated and franchised 357 and 6,431 restaurants, respectively.

As a result of the realignment of our management and operating structure during 2019 as discussed in Note 5, the Company adopted a new segment reporting structure beginning in the fourth quarter of 2019. As part of this new structure, the Company made the following changes: (1) it combined its Canadian business with its International segment and (2) it separated its real estate and development operations into its own segment. The Company is now comprised of the following segments: (1) Wendy’s U.S., (2) Wendy’s International and (3) Global Real Estate & Development. Certain prior period financial information has been revised to align with the new segment reporting structure. See Note 26 for further information.

Principles of Consolidation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include all of the Company’s subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ materially from those estimates.

Fiscal Year

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, 2019” or “2019,” (2) “the year ended December 30, 2018” or “2018” and (3) “the year ended December 31, 2017” or “2017,” all of which consisted of 52 weeks.

Reclassifications

Certain balance sheet reclassifications have been made to the prior year presentation to conform to the current year presentation. See “New Accounting Standards Adopted” below for further information.

Cash and Cash Equivalents

All highly liquid investments with a maturity of three months or less when acquired are considered cash equivalents. The Company’s cash and cash equivalents principally consist of cash in bank and money market mutual fund accounts and are primarily not in Federal Deposit Insurance Corporation insured accounts.

We believe that our vulnerability to risk concentrations in our cash equivalents is mitigated by (1) our policies restricting the eligibility, credit quality and concentration limits for our placements in cash equivalents and (2) insurance from the Securities Investor Protection Corporation of up to $500 per account, as well as supplemental private insurance coverage maintained by substantially all of our brokerage firms, to the extent our cash equivalents are held in brokerage accounts.

Restricted Cash

In accordance with the Company’s securitized financing facility, certain cash accounts have been established with the trustee for the benefit of the trustee and the noteholders and are restricted in their use. 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 Company’s national advertising funds for the U.S. and Canada (the “Advertising Funds”), usage of which is restricted for advertising activities. Refer to Note 7 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. The need for an allowance for doubtful accounts is reviewed on a specific identification basis based upon past due balances and the financial strength of the obligor.

Inventories

The Company’s inventories are stated at the lower of cost or net realizable value, with cost determined in accordance with the first-in, first-out method and consist primarily of restaurant food items and paper supplies.

Properties and Depreciation and Amortization

Properties are stated at cost, including capitalized internal costs of employees to the extent such employees are dedicated to specific restaurant construction projects, less accumulated depreciation and amortization. Depreciation and amortization of properties is computed principally on the straight-line basis using the following estimated useful lives of the related major classes of properties: 3 to 20 years for office and restaurant equipment (including technology), 3 to 15 years for transportation equipment and 7 to 30 years for buildings and improvements. When the Company commits to a plan to cease using certain properties before the end of their estimated useful lives, depreciation expense is accelerated to reflect the use of the assets over their shortened useful lives. Leasehold improvements are amortized over the shorter of their estimated useful lives or the terms of the respective leases, including periods covered by renewal options that the Company is reasonably assured of exercising.

The Company reviews properties for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. If such review indicates an asset group may not be recoverable, an impairment loss is recognized for the excess of the carrying amount over the fair value of an asset group to be held and used or over the fair value less cost to sell of an asset to be disposed. See “Impairment of Long-Lived Assets” below for further information.

The Company classifies assets as held for sale and ceases depreciation of the assets when there is a plan for disposal of the assets and those assets meet the held for sale criteria. Assets held for sale are included in “Prepaid expenses and other current assets” in the consolidated balance sheets.

Goodwill

Goodwill, representing the excess of the cost of an acquired entity over the fair value of the acquired net assets, is not amortized. Goodwill associated with our Company-operated restaurants is reduced as a result of restaurant dispositions based on the relative fair values and is included in the carrying value of the restaurant in determining the gain or loss on disposal. If a Company-operated restaurant is sold within two years of being acquired from a franchisee, the goodwill associated with the acquisition is written off in its entirety. Goodwill has been assigned to reporting units for purposes of impairment testing.  The Company tests goodwill for impairment annually during the fourth quarter, or more frequently if events or changes in circumstances indicate that the asset may be impaired. Our annual impairment test of goodwill may be completed through a qualitative assessment to determine if the fair value of the reporting unit is more likely than not greater than the carrying amount.  If we elect to bypass the qualitative assessment for any reporting units, or if a qualitative assessment indicates it is more likely than not that the estimated carrying value of a reporting unit exceeds its fair value, we perform a two-step quantitative goodwill impairment test. Under the first step, the fair value of the reporting unit is compared with its carrying value (including goodwill).  If the fair value of the reporting unit is less than its carrying value, an indication of goodwill impairment exists for the reporting unit and we must perform step two of the impairment test (measurement).  Step two of the impairment test, if necessary, requires the estimation of the fair value for the assets and liabilities of a reporting unit in order to calculate the implied fair value of the reporting unit’s goodwill.  If the carrying amount of a reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess.

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. Should actual cash flows and our future estimates vary adversely from those estimates we use, we may be required to recognize goodwill impairment charges in future years.

Impairment of Long-Lived Assets

Our long-lived assets include (1) properties and related definite-lived intangible assets (e.g., favorable leases) that are leased and/or subleased to franchisees, (2) Company-operated restaurant assets and related definite-lived intangible assets, which include reacquired rights under franchise agreements, and (3) finance and operating lease assets.

We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We assess the recoverability of our long-lived assets by comparing the carrying amount of the asset group to future undiscounted net cash flows expected to be generated through leases and/or subleases or by our individual Company-operated restaurants. 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 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. Should actual cash flows and our future estimates vary adversely from those estimates we used, we may be required to recognize additional impairment charges in future years.

Other Intangible Assets

Definite-lived intangible assets are amortized on a straight-line basis using the following estimated useful lives of the related classes of intangibles: for favorable leases, the terms of the respective leases, including periods covered by renewal options that the Company as lessee is reasonably assured of exercising; 1 to 5 years for computer software; 4 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 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. Indefinite-lived intangible assets are tested for impairment at least annually, or more frequently if events or changes in circumstances indicate that the assets may be impaired. Our annual impairment test for indefinite-lived intangible assets may be completed through a qualitative assessment to determine if the fair value of the indefinite-lived intangible assets is more likely than not greater than the carrying amount. 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. If the Company determines that impairment of its intangible assets may exist, the amount of impairment loss is measured as the excess of carrying value over fair value. Our estimates in the determination of the fair value of indefinite-lived intangible assets include the anticipated future revenues of Company-operated and franchised restaurants and the resulting cash flows.

Investments

The Company has a 50% share in a partnership in a Canadian restaurant real estate joint venture (“TimWen”) with a subsidiary of Restaurant Brands International Inc., a quick-service restaurant company that owns the Tim Hortons® brand (Tim Hortons is a registered trademark of Tim Hortons USA Inc.). In addition, the Company has a 20% share in a joint venture in Brazil (the “Brazil JV”). 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.” Other investments in equity securities, including investments in limited partnerships, in which the Company does not have significant influence, and for which there is not a readily determinable fair value, are recorded at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer. Realized gains and losses are reported as income or loss in the period in which the securities are sold or otherwise disposed. 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, 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. Accordingly, the carrying value difference is amortized over the estimated lives of the assets of the investee to which such difference would have been allocated if the equity investment were a consolidated subsidiary. To the extent the carrying value difference represents goodwill, it is not amortized.

Share-Based Compensation

The Company has granted share-based compensation awards to certain employees under several equity plans (the “Equity Plans”). The Company measures the cost of employee services received in exchange for an equity award, which include grants of employee stock options and restricted shares, based on the fair value of the award at the date of grant. Share-based compensation expense is recognized net of estimated forfeitures, determined based on historical experience. 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. 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 average of the high and low trading prices of our common stock on the date of grant, unless the awards are subject to market conditions, in which case we use a Monte Carlo simulation model. The Monte Carlo simulation model utilizes multiple input variables to estimate the probability that market conditions will be achieved.

Foreign Currency Translation

The Company’s primary foreign operations are in Canada where the functional currency is the Canadian dollar. Financial statements of foreign subsidiaries are prepared in their functional currency and then translated into U.S. dollars. Assets and liabilities are translated at the exchange rate as of the balance sheet date and revenues, costs and expenses are translated at a monthly average exchange rate. 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.”

Income Taxes

The Company accounts for income taxes under the asset and liability method. A deferred tax asset or liability is recognized whenever there are (1) future tax effects from temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and (2) operating loss, capital loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to the years in which those differences are expected to be recovered or settled.

Deferred tax assets are recognized to the extent the Company believes these assets will more likely than not be realized. In evaluating the realizability of deferred tax assets, the Company considers all available positive and negative evidence, including the interaction and the timing of future reversals of existing temporary differences, projected future taxable income, recent operating results and tax-planning strategies. When considered necessary, a valuation allowance is recorded to reduce the carrying amount of the deferred tax assets to their anticipated realizable value.

The Company records uncertain tax positions on the basis of a two-step process whereby we first determine if it is more likely than not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. A tax position that meets the more-likely-than-not recognition threshold is then measured for purposes of financial statement recognition as the largest amount of benefit that is greater than 50% likely of being realized upon being effectively settled.

Interest accrued for uncertain tax positions is charged to “Interest expense, net.” Penalties accrued for uncertain tax positions are charged to “General and administrative.”

Restaurant Acquisitions and Dispositions

The Company accounts for the acquisition of restaurants from franchisees using the acquisition method of accounting for business combinations. The acquisition method of accounting involves the allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed. This allocation process requires the use of estimates and assumptions to derive fair values and to complete the allocation. The excess of the purchase price over the fair values of the assets acquired and liabilities assumed represents goodwill derived from the acquisition. See “Goodwill” above for further information.

In connection with the sale of Company-operated restaurants to franchisees, the Company typically enters into several agreements, in addition to an asset purchase agreement, with franchisees including franchise, development, relationship and lease agreements. The Company typically sells restaurants’ cash, inventory and equipment and retains ownership or the leasehold interest to the real estate to lease and/or sublease to the franchisee. The Company has determined that its restaurant dispositions usually represent multiple-element arrangements, and as such, the cash consideration received is allocated to the separate elements based on their relative selling price. Cash consideration generally includes up-front consideration for the sale of the restaurants, technical assistance fees and development fees and future cash consideration for royalties and lease payments. The Company considers the future lease payments in allocating the initial cash consideration received. The Company obtains third-party evidence to estimate the relative selling price of the stated rent under the lease and/or sublease agreements which is primarily based upon comparable market rents. Based on the Company’s review of the third-party evidence, the Company records favorable or unfavorable lease assets/liabilities with a corresponding offset to the gain or loss on the sale of the restaurants. The cash consideration per restaurant for technical assistance fees and development fees is consistent with the amounts stated in the related franchise agreements which are charged for separate standalone arrangements. The Company recognizes the technical assistance and development fees over the contractual term of the franchise agreements. Future royalty income is also recognized in revenue as earned. See “Revenue Recognition” below for further information.

Revenue Recognition

“Sales” includes revenues recognized upon delivery of food to the customer at Company-operated restaurants. “Sales” excludes taxes collected from the Company’s customers. Revenue is recognized when the food is purchased by the customer, which is when our performance obligation is satisfied. “Sales” also includes income for gift cards. Gift card payments are recorded as deferred income when received and are recognized as revenue in proportion to actual gift card redemptions.
“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 and development fees. Royalties from franchised restaurants are based on a percentage of sales of the franchised restaurant and are recognized as earned. New build technical assistance fees, renewal fees and Franchise Flip technical assistance fees are recorded as deferred revenue when received and recognized as revenue over the contractual term of the franchise agreements, once the restaurant has opened. Development fees are deferred when received, allocated to each agreed upon restaurant, and recognized as revenue over the contractual term of each respective franchise agreement, once the restaurant has opened. These franchise fees are considered highly dependent upon and interrelated with the franchise right granted in the franchise agreement. Franchise Flip advisory fees include valuation services and fees for selecting pre-approved buyers for Franchise Flips. Franchise Flip advisory fees are paid by the seller and are recognized as revenue at closing of the Franchise Flip transaction.
“Advertising funds revenue” includes contributions to the Advertising Funds by franchisees. Revenue related to these contributions is based on a percentage of sales of the franchised restaurants and is recognized as earned.
“Franchise rental income” includes rental income from properties owned and leased by the Company and leased or subleased to franchisees. Rental income is recognized on a straight-line basis over the respective operating lease terms. Favorable and unfavorable lease amounts related to the leased and/or subleased properties are amortized to rental income on a straight-line basis over the remaining term of the leases.

See “New Accounting Standards Adopted” below for a description of changes to our revenue recognition policies resulting from the adoption of the new accounting guidance for revenue recognition effective January 1, 2018.

Cost of Sales

Cost of sales includes food and paper, restaurant labor and occupancy, advertising and other operating costs relating to Company-operated restaurants. Cost of sales excludes depreciation and amortization expense.

Vendor Incentives

The Company receives incentives from certain vendors. These incentives are recognized as earned and are classified as a reduction of “Cost of sales.”

Advertising Costs

Advertising costs are expensed as incurred and are included in “Cost of sales” and “Advertising funds expense.” Production costs of advertising are expensed when the advertisement is first released.

Franchise Support and Other Costs

The Company incurs costs to provide direct support services to our franchisees, as well as certain other direct and incremental costs to the Company’s franchise operations. 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.

Self-Insurance

The Company is self-insured for most workers’ compensation losses and health care claims and purchases insurance for general liability and automotive liability losses, all subject to a $500 per occurrence retention or deductible limit. 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.

Leases

Determination of Whether a Contract Contains a Lease

The Company evaluates the contracts it enters into to determine whether such contracts contain leases. A contract contains a lease if the contract conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. At commencement, contracts containing a lease are further evaluated for classification as an operating or finance lease where the Company is a lessee, or as an operating, sales-type or direct financing lease where the Company is a lessor, based on their terms.

ROU Model and Determination of Lease Term

The Company uses the right-of-use (“ROU”) model to account for leases where the Company is the lessee, which requires an entity to recognize a lease liability and ROU asset on the lease commencement date. A lease liability is measured equal to the present value of the remaining lease payments over the lease term and is discounted using the incremental borrowing rate, as the rate implicit in the Company’s leases is not readily determinable. The incremental borrowing rate is the rate of interest that the Company would have to pay to borrow, on a collateralized basis over a similar term, an amount equal to the lease payments in a similar economic environment. Lease payments include payments made before the commencement date and any residual value guarantees, if applicable. The initial ROU asset consists of the initial measurement of the lease liability, adjusted for any favorable or unfavorable terms for leases acquired from franchisees, as well as payments made before the commencement date, initial direct costs and lease incentives earned. When determining the lease term, the Company includes option periods that it is reasonably certain to exercise as failure to renew the lease would impose a significant economic detriment. For properties used for Company-operated restaurants, the primary economic detriment relates to the existence of unamortized leasehold improvements which might be impaired if we choose not to exercise the available renewal options. The lease term for properties leased or subleased to franchisees is determined based upon the economic detriment to the franchisee and includes consideration of the length of the franchise agreement, historical performance of the restaurant and the existence of bargain renewal options. Lease terms for real estate are generally initially between 15 and 20 years and, in most cases, provide for rent escalations and renewal options.

Operating Leases

For operating leases, minimum lease payments or receipts, including minimum scheduled rent increases, are recognized as rent expense where the Company is a lessee, or income where the Company is a lessor, as applicable, on a straight-line basis (“Straight-Line Rent”) over the applicable lease terms. There is a period under certain lease agreements referred to as a rent holiday (“Rent Holiday”) that generally begins on the possession date and ends on the rent commencement date. During a Rent Holiday, no cash rent payments are typically due under the terms of the lease; however, expense is recorded for that period on a straight-line basis. The excess of the Straight-Line Rent over the minimum rents paid is included in the ROU asset where the Company is a lessee. The excess of the Straight-Line Rent over the minimum rents received is recorded as a deferred lease asset and is included in “Other assets” where the Company is a lessor. Certain leases contain provisions, referred to as contingent rent (“Contingent Rent”), that require additional rental payments based upon restaurant sales volume. Contingent Rent is recognized each period as the liability is incurred or the asset is earned.

Lease cost for operating leases is recognized on a straight-line basis and includes the amortization of the ROU asset and interest expense related to the operating lease liability. Variable lease cost for operating leases includes Contingent Rent and payments for executory costs such as real estate taxes, insurance and common area maintenance, which are excluded from the measurement of the lease liability. Short-term lease cost for operating leases includes rental expense for leases with a term of less than 12 months. Lease costs are recorded in the consolidated statements of operations based on the nature of the underlying lease as follows: (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. When the expected term of a lease is determined to be shorter than the original amortization period, the favorable or unfavorable lease balance associated with the lease is adjusted to reflect the revised lease term.

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

Lease cost for finance leases includes the amortization of the ROU asset, which is amortized on a straight-line basis and recorded to “Depreciation and amortization,” and interest expense on the finance lease liability, which is calculated using the interest method and recorded to “Interest expense, net.” Finance lease ROU assets are amortized over the shorter of their estimated useful lives or the terms of the respective leases, including periods covered by renewal options that the Company is reasonably assured of exercising.

Sales-Type and Direct Financing Leases

For sales-type and direct financing leases where the Company is the lessor, the Company records its investment in properties leased to franchisees on a net basis, which is comprised of the present value of the lease payments not yet received and the present value of the guaranteed and unguaranteed residual assets. The current and long-term portions of our net investment in sales-type and direct financing leases are included in “Accounts and notes receivable, net” and “Net investment in sales-type and direct financing leases,” respectively. Unearned income is recognized as interest income over the lease term and is included in “Interest expense, net.” Sales-type leases result in the recognition of gain or loss at the commencement of the lease, which is recorded to “Other operating income, net.” The gain or loss recognized upon commencement of the lease is directly affected by the Company’s estimate of the amount to be derived from the guaranteed and unguaranteed residual assets at the end of the lease term. The Company’s main component of this estimate is the expected fair value of the underlying assets, primarily the fair value of land. Lessees’ variable payments to the Company for executory costs under sales-type and direct financing leases are recognized on a gross basis as “Franchise rental income” with a corresponding expense recorded to “Franchise rental expense.”

Significant Assumptions and Judgments

Management makes certain estimates and assumptions regarding each new lease and sublease agreement, renewal and amendment, including, but not limited to, property values, market rents, property lives, discount rates and probable term, all of which can impact (1) the classification and accounting for a lease or sublease as operating or finance, including sales-type and direct financing, (2) the Rent Holiday and escalations in payment that are taken into consideration when calculating Straight-Line Rent, (3) the term over which leasehold improvements for each restaurant are amortized and (4) the values and lives of adjustments to the initial ROU asset where the Company is the lessee, or favorable and unfavorable leases where the Company is the lessor. The amount of depreciation and amortization, interest and rent expense and income reported would vary if different estimates and assumptions were used.

Concentration of Risk

Wendy’s had no customers which accounted for 10% or more of consolidated revenues in 2019, 2018 or 2017. As of December 29, 2019, Wendy’s had one main in-line distributor of food, packaging and beverage products, excluding breads, that serviced approximately 52% of Wendy’s restaurants in the U.S. and five additional in-line distributors that, in the aggregate, serviced approximately 47% of Wendy’s restaurants in the U.S. We believe that our vulnerability to risk concentrations related to significant vendors and sources of our raw materials is mitigated as we believe that there are other vendors who would be able to service our requirements. However, if a disruption of service from any of our main in-line distributors was to occur, we could experience short-term increases in our costs while distribution channels were adjusted.

Wendy’s restaurants are principally located throughout the U.S. and to a lesser extent, in 30 foreign countries and U.S. territories with the largest number in Canada. Wendy’s U.S. restaurants are located in 50 states and the District of Columbia, with the largest number in Florida, Texas, Ohio, Georgia, California, North Carolina, Pennsylvania and Michigan. Because our restaurant operations are generally located throughout the U.S. and to a much lesser extent, Canada and other foreign countries and U.S. territories, we believe the risk of geographic concentration is not significant. We could be adversely affected by changing consumer preferences resulting from concerns over nutritional or safety aspects of beef, chicken, french fries or other products we sell or the effects of food safety events or disease outbreaks. Our exposure to foreign exchange risk is primarily related to fluctuations in the Canadian dollar relative to the U.S. dollar for our Canadian operations. 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.

The Company is subject to credit risk through its accounts receivable consisting primarily of amounts due from franchisees for royalties, franchise fees and rent. In addition, we have notes receivable from certain of our franchisees. The financial condition of these franchisees is largely dependent upon the underlying business trends of the Wendy’s brand and market conditions within the quick-service restaurant industry. This concentration of credit risk is mitigated, in part, by the number of franchisees and the short-term nature of the franchise receivables.

New Accounting Standards Adopted

Cloud Computing

In August 2018, the Financial Accounting Standards Board (“FASB”) issued new guidance on accounting for implementation costs of a cloud computing arrangement that is a service contract. The new guidance aligns the accounting for such implementation costs of a cloud computing arrangement that is a service contract with the guidance on capitalizing costs associated with developing or obtaining internal-use software. The Company adopted this amendment during the first quarter of 2019. The adoption of this guidance did not have a material impact on our consolidated financial statements.

Nonemployee Share-Based Payments

In June 2018, the FASB issued new guidance on nonemployee share-based payment arrangements. The new guidance aligns the requirements for nonemployee share-based payments with the requirements for employee share-based payments. The Company adopted this amendment during the first quarter of 2019. The adoption of this guidance did not have a material impact on our consolidated financial statements.

Leases

In February 2016, the FASB issued new guidance on leases, which outlines principles for the recognition, measurement, presentation and disclosure of leases applicable to both lessors and lessees. The new guidance requires lessees to recognize on the balance sheet the assets and liabilities for the rights and obligations created by finance and operating leases. The Company adopted the new guidance during the first quarter of 2019 using the effective date as the date of initial application; therefore, the comparative periods have not been adjusted and continue to be reported under the previous lease guidance.

The new standard provides a number of optional practical expedients in transition. The Company elected the package of practical expedients, which permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. For those leases that fall under the definition of a short-term lease, the Company elected the short-term lease recognition exemption. Under this practical expedient, for those leases that qualify, we did not recognize ROU assets or liabilities, which included not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition. The Company also elected the practical expedient for lessees to account for lease components and nonlease components as a single lease component for all underlying classes of assets. In addition, the Company elected the practical expedient for lessors to account for lease components and nonlease components as a single lease component in instances where the lease component is predominant, the timing and pattern of transfer for the lease component and nonlease component are the same and the lease component, if accounted for separately, would be classified as an operating lease. The Company did not elect the use-of-hindsight practical expedient.

The standard had a material impact on our consolidated balance sheets and related disclosures. Upon adoption at the beginning of 2019, we recognized operating lease liabilities of $1,011,000 based on the present value of the remaining minimum rental payments, with corresponding ROU assets of $934,000. The measurement of the operating lease ROU assets included, among other items, favorable lease amounts of $23,000 and unfavorable lease amounts of $30,000, which were previously included in “Other intangible assets” and “Other liabilities,” respectively, as well as the excess of rent expense recognized on a straight-line basis over the minimum rents paid of $67,000, which was previously included in “Other liabilities.” In addition, the standard requires lessors to recognize lessees’ payments to the Company for executory costs on a gross basis as revenue with a corresponding expense, which resulted in an increase of approximately $38,000 to our 2019 franchise rental income and expense. The Company also recognized a decrease to retained earnings of $1,105 as a result of impairing newly recognized ROU assets upon transition to the new guidance. The adoption of the guidance did not have a material impact on our consolidated statement of cash flows.

In connection with the adoption of the standard, the Company has reclassified finance lease ROU assets to “Finance lease assets,” which were previously recorded to “Properties.” The Company also reclassified the current and long-term finance lease liabilities to “Current portion of finance lease liabilities” and “Long-term finance lease liabilities,” respectively, which were previously recorded to “Current portion of long-term debt” and “Long-term debt,” respectively. The prior period amounts in the consolidated balance sheet and in the related notes to the financial statements reflect the reclassifications of these assets and liabilities to conform to the current year presentation.

The following table illustrates the reclassifications made to the consolidated balance sheet as of December 30, 2018:
 
As Previously Reported
 
Reclassifications
 
As Currently Reported
Properties
$
1,213,236

 
$
(189,969
)
 
$
1,023,267

Finance lease assets
—

 
189,969

 
189,969

Current portion of long-term debt
31,655

 
(8,405
)
 
23,250

Current portion of finance lease liabilities
—

 
8,405

 
8,405

Long-term debt
2,752,783

 
(447,231
)
 
2,305,552

Long-term finance lease liabilities
—

 
447,231

 
447,231



In addition, the Company reclassified repayments of finance lease liabilities to “Repayments of finance lease liabilities,” which were previously recorded to “Repayments of long-term debt.” The prior period amounts in the consolidated statements of cash flows reflect the reclassifications of these cash flows to conform to the current year presentation.

The following tables illustrate the reclassifications made to the consolidated statements of cash flows for 2018 and 2017:
 
2018
 
As Previously Reported
 
Reclassifications
 
As Currently Reported
Repayments of long-term debt
$
(900,072
)
 
$
5,571

 
$
(894,501
)
Repayments of finance lease liabilities
—

 
(5,571
)
 
(5,571
)

 
2017
 
As Previously Reported
 
Reclassifications
 
As Currently Reported
Repayments of long-term debt
$
(58,113
)
 
$
5,520

 
$
(52,593
)
Repayments of finance lease liabilities
—

 
(5,520
)
 
(5,520
)

Revenue Recognition

In May 2014, the FASB issued amended guidance for revenue recognition. The new guidance outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The core principle of the guidance is that an entity should recognize revenue for the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. Additionally, the guidance requires improved disclosure to help users of financial statements better understand the nature, amount, timing and uncertainty of revenue that is recognized. The Company adopted the new guidance on January 1, 2018. As a result, the Company has changed its accounting policy for revenue recognition as detailed below.

The Company applied the new guidance using the modified retrospective method, whereby the cumulative effect of initially adopting the guidance was recognized as an adjustment to the opening balance of equity at January 1, 2018. Therefore, the comparative period has not been adjusted and continues to be reported under the previous revenue recognition guidance. The details of the significant changes and quantitative impact of the changes are discussed below.

Franchise Fees

Under previous revenue recognition guidance, new build technical assistance fees and development fees were recognized as revenue when a franchised restaurant opened, as all material services and conditions related to the franchise fee had been substantially performed upon the restaurant opening. In addition, under previous guidance, technical assistance fees received in connection with sales of Company-operated restaurants to franchisees and facilitating Franchise Flips, as well as renewal fees, were recognized as revenue when the franchise agreements were signed and the restaurants opened. Under the new guidance, these franchise fees are considered highly dependent upon and interrelated with the franchise right granted in the franchise agreement. As such, these franchise fees are recognized over the contractual term of the franchise agreement.

National Advertising Funds

Previously, the revenue, expenses and cash flows of the Advertising Funds were not included in the Company’s consolidated statements of operations and statements of cash flows because the contributions to the Advertising Funds were designated for specific purposes and the Company acted as an agent, in substance, with regard to these contributions as a result of industry-specific guidance. Under the new guidance, which superseded the previous industry-specific guidance, the revenue, expenses and cash flows of the Advertising Funds are fully consolidated into the Company’s consolidated statements of operations and statements of cash flows.
Impacts on Financial Statements

The following tables summarize the impacts of adopting the revenue recognition standard on the Company’s consolidated financial statements:
 
 
 
Adjustments
 
 
 
As Reported
 
Franchise Fees
 
Advertising Funds
 
Balances Without Adoption
Consolidated Balance Sheet
 
 
 
 
 
 
 
December 30, 2018
 
 
 
 
 
 
 
Accrued expenses and other current liabilities
$
150,636

 
$
(3,079
)
 
$
—

 
$
147,557

Advertising funds restricted liabilities
80,153

 
—

 
(2,492
)
 
77,661

Total current liabilities
284,185

 
(3,079
)
 
(2,492
)
 
278,614

Deferred income taxes
269,160

 
21,861

 
—

 
291,021

Deferred franchise fees
92,232

 
(81,551
)
 
—

 
10,681

Total liabilities
3,643,586

 
(62,769
)
 
(2,492
)
 
3,578,325

Retained earnings
146,277

 
63,174

 
2,492

 
211,943

Accumulated other comprehensive loss
(61,673
)
 
(405
)
 
—

 
(62,078
)
Total stockholders’ equity
648,449

 
62,769

 
2,492

 
713,710

 
 
 
 
 
 
 
 
Consolidated Statement of Operations
 
 
 
 
 
 
Year Ended December 30, 2018
 
 
 
 
 
 
 
Franchise royalty revenue and fees (a)
$
409,043

 
$
(525
)
 
$
—

 
$
408,518

Advertising funds revenue
326,019

 
—

 
(326,019
)
 
—

Total revenues
1,589,936

 
(525
)
 
(326,019
)
 
1,263,392

Advertising funds expense
321,866

 
—

 
(321,866
)
 
—

Total costs and expenses
1,340,044

 
—

 
(321,866
)
 
1,018,178

Operating profit
249,892

 
(525
)
 
(4,153
)
 
245,214

Income before income taxes
574,916

 
(525
)
 
(4,153
)
 
570,238

Provision for income taxes
(114,801
)
 
134

 
—

 
(114,667
)
Net income
460,115

 
(391
)
 
(4,153
)
 
455,571

_______________

(a)
The adjustments for 2018 include the reversal of franchise fees recognized over time under the new revenue recognition guidance of $9,641, as well as franchisee fees that would have been recognized under the previous revenue recognition guidance when the franchise agreements were signed and the restaurants opened of $9,116. See Note 2 for further information.
 
 
 
Adjustments
 
 
 
As Reported
 
Franchise Fees
 
Advertising Funds
 
Balances Without Adoption
Consolidated Statement of Cash Flows
 
 
 
 
 
 
 
Year Ended December 30, 2018
 
 
 
 
 
 
 
Cash flows from operating activities:
 
 
 
 
 
 
 
Net income
$
460,115

 
$
(391
)
 
$
(4,153
)
 
$
455,571

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
 
 
 
Deferred income tax
(6,568
)
 
(134
)
 
—

 
(6,702
)
Other, net
5,178

 
(502
)
 
—

 
4,676

Changes in operating assets and liabilities:
 
 
 
 
 
 
 
Advertising funds restricted assets and liabilities
13,955

 
—

 
4,153

 
18,108

Accrued expenses and other current liabilities
23,963

 
1,027

 
—

 
24,990



New Accounting Standards

Income Taxes

In December 2019, the FASB issued new guidance to simplify the accounting for income taxes by removing certain exceptions to the general principles and the simplification of areas such as franchise taxes, step-up in tax basis goodwill, separate entity financial statements and interim recognition of enactment of tax laws or rate changes. The standard is effective beginning with our 2021 fiscal year. The Company does not expect the guidance to have a material impact on our consolidated financial statements.

Fair Value Measurement

In August 2018, the FASB issued new guidance on disclosure requirements for fair value measurements, which is effective beginning with our 2020 fiscal year. The objective of the new guidance is to provide additional information about assets and liabilities measured at fair value in the statement of financial position or disclosed in the notes to financial statements. New incremental disclosure requirements include the amount of fair value hierarchy level 3 changes in unrealized gains and losses and the range and weighted average used to develop significant unobservable inputs for level 3 fair value measurements. The Company does not expect the amendment to have a material impact on our consolidated financial statements.

Goodwill Impairment

In January 2017, the FASB issued an amendment that simplifies the accounting for goodwill impairment by eliminating step two from the goodwill impairment test. The Company does not expect the amendment, which is effective beginning with our 2020 fiscal year, to have a material impact on our consolidated financial statements.

Credit Losses

In June 2016, the FASB issued an amendment that will require the Company to use a current expected credit loss model that will result in the immediate recognition of an estimate of credit losses that are expected to occur over the life of the financial instruments that are within the scope of the guidance, including trade receivables. The amendment is effective beginning with our 2020 fiscal year. The Company does not expect the amendment to have a material impact on our consolidated financial statements.
v3.19.3.a.u2
Revenue (Notes)
 12 Months Ended
Dec. 29, 2019
Revenue [Abstract]  
Revenue from Contract with Customer Revenue

Nature of Goods and Services

The Company generates revenues from sales at Company-operated restaurants and earns fees and rental income from franchised restaurants. Revenues are recognized upon delivery of food to the customer at Company-operated restaurants or upon the fulfillment of terms outlined in the franchise agreement for franchised restaurants. The franchise agreement provides the franchisee the right to construct, own and operate a Wendy’s restaurant upon a site accepted by Wendy’s and to use the Wendy’s system in connection with the operation of the restaurant at that site. The franchise agreement generally provides for a 20-year term and a 10-year renewal subject to certain conditions. The initial term may be extended up to 25 years and the renewal extended up to 20 years for qualifying restaurants under certain new restaurant development and reimaging programs.

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. 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. The agreement also typically requires that the franchisee pay Wendy’s a technical assistance fee. The technical assistance fee is used to defray some of the costs to Wendy’s for training, start-up and transitional services related to new and existing franchisees acquiring restaurants and in the development and opening of new restaurants.

Wendy’s also enters into development agreements with certain franchisees. The development agreement generally provides the franchisee with the right to develop a specified number of new Wendy’s restaurants using the Image Activation design within a stated, non-exclusive territory for a specified period, subject to the franchisee meeting interim new restaurant development requirements.

Wendy’s owns and leases sites from third parties, which it leases and/or subleases to franchisees. Noncancelable lease terms are generally initially between 15 and 20 years and, in most cases, provide for rent escalations and renewal options. The initial lease term for properties leased or subleased to franchisees is generally set to be coterminous with the initial 20-year term of the related franchise agreement and any renewal term is coterminous with the 10-year renewal term of the related franchise agreement.

Royalties and contributions to the Advertising Funds are generally due within the month subsequent to which the revenue was generated through sales at the franchised restaurant. Technical assistance fees and renewal fees are generally due upon execution of the related franchise agreement. Rental income is due in accordance with the terms of each lease, which is generally at the beginning of each month.

Disaggregation of Revenue

The following tables disaggregate revenue by segment and source for 2019, 2018 and 2017:
 
2019
 
Wendy’s U.S.
 
Wendy’s International
 
Global Real Estate & Development
 
Total
Sales at Company-operated restaurants
$
707,485

 
$
—

 
$
—

 
$
707,485

Franchise royalty revenue
355,702

 
44,998

 
—

 
400,700

Franchise fees
21,889

 
2,978

 
3,432

 
28,299

Franchise rental income
—

 
—

 
233,065

 
233,065

Advertising funds revenue
319,231

 
20,222

 
—

 
339,453

Total revenues
$
1,404,307

 
$
68,198

 
$
236,497

 
$
1,709,002



 
2018
 
Wendy’s U.S.
 
Wendy’s International
 
Global Real Estate & Development
 
Total
Sales at Company-operated restaurants
$
651,577

 
$
—

 
$
—

 
$
651,577

Franchise royalty revenue
335,500

 
42,446

 
—

 
377,946

Franchise fees
18,972

 
5,607

 
6,518

 
31,097

Franchise rental income
—

 
—

 
203,297

 
203,297

Advertising funds revenue
306,442

 
19,577

 
—

 
326,019

Total revenues
$
1,312,491

 
$
67,630

 
$
209,815

 
$
1,589,936


 
2017
 
Wendy’s U.S.
 
Wendy’s International
 
Global Real Estate & Development
 
Total
Sales at Company-operated restaurants
$
622,802

 
$
—

 
$
—

 
$
622,802

Franchise royalty revenue
326,846

 
39,126

 
—

 
365,972

Franchise fees
37,090

 
4,570

 
2,871

 
44,531

Franchise rental income
—

 
—

 
190,103

 
190,103

Total revenues
$
986,738

 
$
43,696

 
$
192,974

 
$
1,223,408



Contract Balances

The following table provides information about receivables and contract liabilities (deferred franchise fees) from contracts with customers:
 
December 29,
2019 (a)
 
December 30,
2018 (a)
Receivables, which are included in “Accounts and notes receivable, net” (b)
$
39,188

 
$
40,300

Receivables, which are included in “Advertising funds restricted assets”
54,394

 
47,332

Deferred franchise fees (c)
100,689

 
102,205

_______________

(a)
Excludes funds collected from the sale of gift cards, which are primarily reimbursed to franchisees upon redemption at franchised restaurants and do not ultimately result in the recognition of revenue in the Company’s consolidated statements of operations.

(b)
Includes receivables related to “Sales” and “Franchise royalty revenue and fees.”

(c)
Deferred franchise fees are included in “Accrued expenses and other current liabilities” and “Deferred franchise fees” and totaled $8,899 and $91,790 as of December 29, 2019, respectively, and $9,973 and $92,232 as of December 30, 2018, respectively.

Significant changes in deferred franchise fees are as follows:
 
2019
 
2018
Deferred franchise fees at beginning of period
$
102,205

 
$
102,492

Revenue recognized during the period
(9,487
)
 
(9,641
)
New deferrals due to cash received and other
7,971

 
9,354

Deferred franchise fees at end of period
$
100,689

 
$
102,205



Anticipated Future Recognition of Deferred Franchise Fees

The following table reflects the estimated franchise fees to be recognized in the future related to performance obligations that are unsatisfied at the end of the period:
Estimate for fiscal year:
 
2020
$
8,899

2021
6,147

2022
5,898

2023
5,721

2024
5,518

Thereafter
68,506

 
$
100,689
v3.19.3.a.u2
System Optimization (Gains) Losses, Net
 12 Months Ended
Dec. 29, 2019
Property, Plant and Equipment  
System Optimization (Gains) (Losses), Net Properties
 
Year End
 
December 29, 2019
 
December 30, 2018
Land
$
375,109

 
$
377,277

Buildings and improvements
508,602

 
507,219

Leasehold improvements
405,158

 
403,896

Office, restaurant and transportation equipment
279,799

 
266,030

 
1,568,668

 
1,554,422

Accumulated depreciation and amortization
(591,668
)
 
(531,155
)
 
$
977,000

 
$
1,023,267



Depreciation and amortization expense related to properties was $81,219, $79,009 and $81,946 during 2019, 2018 and 2017, respectively.
System Optimization  
Property, Plant and Equipment  
System Optimization (Gains) (Losses), Net System Optimization (Gains) Losses, Net

The Company’s system optimization initiative includes a shift from Company-operated restaurants to franchised restaurants over time, through acquisitions and dispositions, as well as facilitating Franchise Flips. As of January 1, 2017, the Company completed its plan to reduce its ongoing Company-operated restaurant ownership to approximately 5% of the total system. While the Company has no plans to reduce its ownership below the approximately 5% level, 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, drive new restaurant development and accelerate reimages. During 2019, 2018 and 2017, the Company facilitated 37, 96 and 400 Franchise Flips, respectively (excluding the DavCo and NPC Transactions discussed below). Additionally, during 2018, the Company completed the sale of three Company-operated restaurants to franchisees. No Company-operated restaurants were sold to franchisees during 2019 or 2017. During 2020, the Company expects to sell 43 Company-operated restaurants in New York to franchisees. The Company expects to retain its Company-operated restaurants in Manhattan.

Gains and losses recognized on dispositions are recorded to “System optimization (gains) losses, net” in our consolidated statements of operations. Costs related to acquisitions and dispositions under our system optimization initiative are recorded to “Reorganization and realignment costs,” which are further described in Note 5. All other costs incurred related to facilitating Franchise Flips are recorded to “Franchise support and other costs.”

The following is a summary of the disposition activity recorded as a result of our system optimization initiative:
 
Year Ended
 
2019
 
2018
 
2017
Number of restaurants sold to franchisees
—

 
3

 
—

 
 
 
 
 
 
Proceeds from sales of restaurants
$
—

 
$
1,436

 
$
—

Net assets sold (a)
—

 
(1,370
)
 
—

Goodwill related to sales of restaurants
—

 
(208
)
 
—

Net favorable leases
—

 
220

 
—

Other
—

 
11

 
—

 
—

 
89

 
—

Post-closing adjustments on sales of restaurants (b)
1,087

 
445

 
2,541

Gain on sales of restaurants, net
1,087

 
534

 
2,541

Gain (loss) on sales of other assets, net (c)
196

 
(71
)
 
2,018

Loss on DavCo and NPC Transactions
—

 
—

 
(43,635
)
System optimization gains (losses), net
$
1,283

 
$
463

 
$
(39,076
)
_______________

(a)
Net assets sold consisted primarily of equipment.

(b)
2019, 2018 and 2017 include the recognition of deferred gains of $911, $1,029 and $312, respectively, as a result of the resolution of certain contingencies related to the extension of lease terms for restaurants previously sold to franchisees. 2018 and 2017 also include cash proceeds, net of payments, of $6 and $294, respectively, related to post-closing reconciliations with franchisees. Additionally, 2017 includes the recognition of a deferred gain of $1,822 (C$2,300) resulting from the release of a guarantee provided by Wendy’s to a lender on behalf of a franchisee in connection with the sale of eight Canadian restaurants to the franchisee during 2014.

(c)
During 2019, 2018 and 2017, Wendy’s received cash proceeds of $3,448, $1,781 and $10,534, respectively, primarily from the sale of surplus properties. 2017 also includes the recognition of a deferred gain of $375 related to the sale of a share in an aircraft.

DavCo and NPC Transactions

As part of our system optimization initiative, the Company acquired 140 Wendy’s restaurants on May 31, 2017 from DavCo Restaurants, LLC (“DavCo”) for total net cash consideration of $86,788, which restaurants were immediately sold to NPC International, Inc. (“NPC”), an existing franchisee of the Company, for cash proceeds of $70,688 (collectively, the “DavCo and NPC Transactions”). As part of the NPC transaction, NPC agreed to remodel 90 acquired restaurants in the Image Activation format by the end of 2021 and build 15 new Wendy’s restaurants by the end of 2022. Prior to closing the DavCo transaction, seven DavCo restaurants were closed. The acquisition of Wendy’s restaurants from DavCo was not contingent on executing the sale agreement with NPC; as such, the Company accounted for the DavCo and NPC Transactions as an acquisition and subsequent disposition of a business. The total consideration paid to DavCo was allocated to net tangible and identifiable intangible assets acquired based on their estimated fair values. As part of the DavCo and NPC Transactions, the Company retained leases for purposes of subleasing such properties to NPC.

The following is a summary of the activity recorded as a result of the DavCo and NPC Transactions:
 
Year Ended
 
2017
Acquisition (a)
 
Total consideration paid
$
86,788

Identifiable assets and liabilities assumed:
 
Net assets held for sale
70,688

Finance lease assets
49,360

Deferred taxes
27,830

Finance lease obligations
(97,797
)
Net unfavorable leases (b)
(22,330
)
Other liabilities (c)
(6,924
)
Total identifiable net assets
20,827

Goodwill (d)
$
65,961

 
 
Disposition
 
Proceeds
$
70,688

Net assets sold
(70,688
)
Goodwill (d)
(65,961
)
Net favorable leases (e)
24,034

Other (f)
(1,708
)
Loss on DavCo and NPC Transactions
$
(43,635
)
_______________

(a)
The fair values of the identifiable intangible assets and taxes related to the acquisition were provisional amounts as of December 31, 2017, pending final purchase accounting adjustments. The Company finalized the purchase price allocation during 2018 with no differences from the provisional amounts previously reported. The Company utilized management estimates and consultation with an independent third-party valuation firm to assist in the valuation process.

(b)
Includes favorable lease assets of $1,229 and unfavorable lease liabilities of $23,559.

(c)
Includes a supplemental purchase price liability recorded to “Accrued expenses and other current liabilities” of $6,269, which was settled during 2018 upon the resolution of certain lease-related matters.

(d)
Includes tax deductible goodwill of $21,795.

(e)
The Company recorded favorable lease assets of $30,068 and unfavorable lease liabilities of $6,034 as a result of subleasing land, buildings and leasehold improvements to NPC.

(f)
Includes cash payments for selling and other costs associated with the transaction.

Assets Held for Sale

As of December 29, 2019 and December 30, 2018, the Company had assets held for sale of $1,437 and $2,435, respectively, primarily consisting of surplus properties. Assets held for sale are included in “Prepaid expenses and other current assets.”
v3.19.3.a.u2
Acquisitions
 12 Months Ended
Dec. 29, 2019
Business Combinations [Abstract]  
Acquisitions Acquisitions

During 2019 and 2018, the Company acquired five restaurants and 16 restaurants from franchisees, respectively. The Company did not incur any material acquisition-related costs associated with the acquisitions and such transactions were 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 franchisees:
 
Year Ended
 
2019
 
2018 (a)
 
2017
Restaurants acquired from franchisees
5

 
16

 
—

 
 
 
 
 
 
Total consideration paid, net of cash received
$
5,052

 
$
21,401

 
$
—

Identifiable assets acquired and liabilities assumed:
 
 
 
 
 
Properties
666

 
4,363

 
—

Acquired franchise rights
1,354

 
10,127

 
—

Finance lease assets
5,350

 
5,360

 
—

Other assets
—

 
621

 
—

Finance lease liabilities
(4,084
)
 
(3,135
)
 
—

Unfavorable leases
—

 
(733
)
 
—

Other
(2,316
)
 
(2,240
)
 
—

Total identifiable net assets
970

 
14,363

 
—

Goodwill
$
4,082

 
$
7,038

 
$
—

_______________

(a) The fair values of the identifiable intangible assets related to restaurants acquired in 2018 were provisional amounts as of December 30, 2018, pending final purchase accounting adjustments. The Company finalized the purchase price allocation during the three months ended March 31, 2019, which resulted in a decrease in the fair value of acquired franchise rights of $2,989 and an increase in deferred tax assets of $140.

On May 31, 2017, the Company also entered into the DavCo and NPC Transactions. See Note 3 for further information.
v3.19.3.a.u2
Reorganization and Reorganization Costs
 12 Months Ended
Dec. 29, 2019
Restructuring and Related Activities [Abstract]  
Realignment and Reorganization Costs Reorganization and Realignment Costs

The following is a summary of the initiatives included in “Reorganization and realignment costs:”
 
Year Ended
 
2019
 
2018
 
2017
IT realignment
$
9,127

 
$
—

 
$
—

G&A realignment
7,749

 
8,785

 
21,663

System optimization initiative
89

 
283

 
911

Reorganization and realignment costs
$
16,965

 
$
9,068

 
$
22,574



Information Technology (“IT”) Realignment

In December 2019, our Board of Directors approved a plan to realign and reinvest resources in the Company’s IT organization to strengthen its ability to accelerate growth. The Company is partnering with a third-party global IT consultant on this new structure to leverage their global capabilities, which the Company believes will enable a more seamless integration between its digital and corporate IT assets. The Company expects that the realignment plan will reduce certain employee compensation and other related costs that the Company intends to reinvest back into IT to drive additional capabilities and capacity across all of its technology platforms. The Company expects the majority of the impact of the realignment plan to occur at its Restaurant Support Center in Dublin, Ohio. The Company expects to incur total costs aggregating approximately $13,000 to $15,000 related to the plan. During 2019, the Company recognized costs totaling $9,127, which primarily included severance and related employee costs and third-party and other costs. The Company expects to incur additional costs aggregating approximately $5,500, comprised of (1) severance and related employee costs of approximately $1,000 and (2) third-party and other costs of approximately $4,500. The Company expects to recognize the majority of the remaining costs associated with the plan during the first half of 2020.

The following is a summary of the activity recorded as a result of the IT realignment plan:
 
2019
Severance and related employee costs
$
7,548

Third-party and other costs
1,386

 
8,934

Share-based compensation (a)
193

Total IT realignment
$
9,127

_______________

(a)
Primarily represents incremental share-based compensation resulting from the modification of stock options in connection with the termination of employees under our IT realignment plan.

The table below presents a rollforward of our accruals for the plan, which are included in “Accrued expenses and other current liabilities” and “Other liabilities” and totaled $8,025 and $599 as of December 29, 2019, respectively.
 
Balance
December 30, 2018
 
Charges
 
Payments
 
Balance
December 29, 2019
Severance and related employee costs
$
—

 
$
7,548

 
$
—

 
$
7,548

Third-party and other costs
—

 
1,386

 
(310
)
 
1,076

 
$
—

 
$
8,934

 
$
(310
)
 
$
8,624



General and Administrative (“G&A”) Realignment

In May 2017, the Company initiated a plan to further reduce its G&A expenses. Additionally, the Company announced in May 2019 changes to its management and operating structure that included the creation of two new positions, a President, U.S and Chief Commercial Officer and a President, International and Chief Development Officer, and the elimination of the Chief Operations Officer position. During 2019, 2018 and 2017, the Company recognized costs related to the plan totaling $7,749,
$8,785 and $21,663, respectively, which primarily included severance and related employee costs and share-based compensation. The Company does not expect to incur any additional material costs under the plan.

As discussed in Note 26, the realignment of our management and operating structure described above resulted in a change in our operating segments as of December 29, 2019.

The following is a summary of the activity recorded as a result of the G&A realignment plan:
 
Year Ended
 
Total Incurred
Since Inception
 
2019
 
2018
 
2017
 
Severance and related employee costs
$
5,485

 
$
3,797

 
$
14,956

 
$
24,238

Recruitment and relocation costs
950

 
1,077

 
489

 
2,516

Third-party and other costs
100

 
1,019

 
1,091

 
2,210

 
6,535

 
5,893

 
16,536

 
28,964

Share-based compensation (a)
1,214

 
1,557

 
5,127

 
7,898

Termination of defined benefit plans (b)
—

 
1,335

 
—

 
1,335

Total G&A realignment
$
7,749

 
$
8,785

 
$
21,663

 
$
38,197

_______________

(a)
Primarily represents incremental share-based compensation resulting from the modification of stock options in connection with the termination of employees under our G&A realignment plan.

(b)
During 2018, the Company terminated two frozen defined benefit plans. See Note 19 for further information.

The accruals for our G&A realignment plan are included in “Accrued expenses and other current liabilities” and “Other liabilities” and totaled $4,504 and $855 as of December 29, 2019, respectively, and $6,280 and $1,044 as of December 30, 2018, respectively. The tables below present a rollforward of our accruals for the plan.
 
Balance
December 30, 2018
 
Charges
 
Payments
 
Balance
December 29, 2019
Severance and related employee costs
$
7,241

 
$
5,485

 
$
(7,450
)
 
$
5,276

Recruitment and relocation costs
83

 
950

 
(950
)
 
83

Third-party and other costs
—

 
100

 
(100
)
 
—

 
$
7,324

 
$
6,535

 
$
(8,500
)
 
$
5,359



 
Balance
December 31,
2017
 
Charges
 
Payments
 
Balance
December 30, 2018
Severance and related employee costs
$
12,093

 
$
3,797

 
$
(8,649
)
 
$
7,241

Recruitment and relocation costs
177

 
1,077

 
(1,171
)
 
83

Third-party and other costs
—

 
1,019

 
(1,019
)
 
—

 
$
12,270

 
$
5,893

 
$
(10,839
)
 
$
7,324



System Optimization Initiative

The Company has recognized costs related to its system optimization initiative, which includes a shift from Company-operated restaurants to franchised restaurants over time, through acquisitions and dispositions, as well as facilitating Franchise Flips. The Company does not expect to incur any material additional costs under the plan.

The following is a summary of the costs recorded as a result of our system optimization initiative:
 
Year Ended
 
Total Incurred Since Inception
 
2019
 
2018
 
2017
 
Severance and related employee costs
$
—

 
$
—

 
$
3

 
$
18,237

Professional fees
72

 
264

 
838

 
17,784

Other
17

 
19

 
70

 
5,849

 
89

 
283

 
911

 
41,870

Accelerated depreciation and amortization (a)
—

 
—

 
—

 
25,398

Share-based compensation (b)
—

 
—

 
—

 
5,013

Total system optimization initiative
$
89

 
$
283

 
$
911

 
$
72,281

_______________

(a)
Primarily includes accelerated amortization of previously acquired franchise rights related to Company-operated restaurants in territories that have been sold to franchisees in connection with our system optimization initiative.

(b)
Represents incremental share-based compensation resulting from the modification of stock options and performance-based awards in connection with the termination of employees under our system optimization initiative.

The table below presents a rollforward of our accruals for our system optimization initiative, which were included in “Accrued expenses and other current liabilities” and “Other liabilities.” As of both December 29, 2019 and December 30, 2018, no accrual remained.
 
Balance
January 1, 2017
 
Charges
 
Payments
 
Balance
December 31, 2017
Severance and related employee costs
$
—

 
$
3

 
$
(3
)
 
$
—

Recruitment and relocation costs
101

 
838

 
(939
)
 
—

Other
—

 
70

 
(70
)
 
—

 
$
101

 
$
911

 
$
(1,012
)
 
$
—
v3.19.3.a.u2
Income Per Share
 12 Months Ended
Dec. 29, 2019
Earnings Per Share [Abstract]  
Income Per Share Income Per Share

Basic income per share for 2019, 2018 and 2017 was computed by dividing net income amounts by the weighted average number of common shares outstanding.

The weighted average number of shares used to calculate basic and diluted income per share were as follows:
 
Year Ended
 
2019
 
2018
 
2017
Common stock:
 
 
 
 
 
Weighted average basic shares outstanding
229,944

 
237,797

 
244,179

Dilutive effect of stock options and restricted shares
5,131

 
7,166

 
8,110

Weighted average diluted shares outstanding
235,075

 
244,963

 
252,289



Diluted net income per share was computed by dividing net income by the weighted average number of basic shares outstanding plus the potential common share effect of dilutive stock options and restricted shares. We excluded potential common shares of 2,518, 1,520 and 1,168 for 2019, 2018 and 2017, respectively, from our diluted net income per share calculation as they would have had anti-dilutive effects.
v3.19.3.a.u2
Cash and Receivables
 12 Months Ended
Dec. 29, 2019
Cash and Receivables [Abstract]  
Cash and Receivables Disclosure [Text Block] Cash and Receivables
 
Year End
 
December 29, 2019
 
December 30, 2018
Cash and cash equivalents
 
 
 
Cash
$
185,203

 
$
209,177

Cash equivalents
114,992

 
222,228

 
300,195

 
431,405

Restricted cash
 
 
 
Accounts held by trustee for the securitized financing facility
34,209

 
29,538

Trust for termination costs for former Wendy’s executives
111

 
109

Other
219

 
213

 
34,539

 
29,860

Advertising Funds (a)
23,973

 
25,247

 
58,512

 
55,107

Total cash, cash equivalents and restricted cash
$
358,707

 
$
486,512

_______________

(a)
Included in “Advertising funds restricted assets.”

 
 
Year End
 
 
December 29, 2019
 
December 30, 2018
Accounts and Notes Receivable, Net
 
 
 
 
Current
 
 
 
 
Accounts receivable:
 
 
 
 
Franchisees
 
$
55,570

 
$
60,567

Other (a)
 
48,282

 
51,320

 
 
103,852

 
111,887

Notes receivable from franchisees (b) (c)
 
23,628

 
2,857

 
 
127,480

 
114,744

Allowance for doubtful accounts
 
(10,019
)
 
(4,939
)
 
 
$
117,461

 
$
109,805

 
 
 
 
 
Non-current (d)
 
 
 
 
Notes receivable from franchisees (c)
 
$
1,617

 
$
16,322

Allowance for doubtful accounts (c)
 
—

 
(2,000
)
 
 
$
1,617

 
$
14,322

_______________

(a)
Includes income tax refund receivables of $13,555 and $14,475 as of December 29, 2019 and December 30, 2018, respectively. Additionally, 2019 and 2018 include receivables of $25,350 and $22,500, respectively, related to insurance coverage for the FI Case. See Note 11 for further information on our legal reserves.

(b)
Includes the current portion of sales-type and direct financing lease receivables of $3,146 and $735 as of December 29, 2019 and December 30, 2018, respectively. See Note 20 for further information.

(c)
Includes a note receivable from a franchisee in Indonesia, of which $1,262 and $969 are included in current notes receivable and $1,617 and $2,522 are included in non-current notes receivable as of December 29, 2019 and December 30, 2018, respectively.

Includes notes receivable from the Brazil JV of $15,920 as of December 29, 2019, which is included in current notes receivable, and $12,800 as of December 30, 2018, which is included in non-current notes receivable. As of December 29, 2019 and December 30, 2018, the Company had reserves of $5,720 and $2,000, respectively, on the loans outstanding to the Brazil JV. See Note 8 for further information.

Includes a note receivable from a franchisee in India totaling $1,000, which is included in current notes receivable as of December 29, 2019 and in non-current notes receivable as of December 30, 2018. During 2019, the Company recorded a reserve of $985 on the loan outstanding to the franchisee in India.

Includes a note receivable from a U.S. franchisee totaling $1,000, which is included in current notes receivable as of December 29, 2019.

(d)
Included in “Other assets.”

The following is an analysis of the allowance for doubtful accounts:
 
Year Ended
 
2019
 
2018
 
2017
Balance at beginning of year:
 
 
 
 
 
Current
$
4,939

 
$
4,546

 
$
4,030

Non-current
2,000

 
—

 
26

Provision for doubtful accounts:
 
 
 
 
 
Franchisees and other
3,294

 
2,562

 
579

Uncollectible accounts written off, net of recoveries
(214
)
 
(169
)
 
(89
)
Balance at end of year:
 
 
 
 
 
Current
10,019

 
4,939

 
4,546

Non-current
—

 
2,000

 
—

Total
$
10,019

 
$
6,939

 
$
4,546
v3.19.3.a.u2
Investments
 12 Months Ended
Dec. 29, 2019
Investments [Abstract]  
Investments Investments

The following is a summary of the carrying value of our investments:
 
Year End
 
December 29,
2019
 
December 30,
2018
Equity method investments
$
45,310

 
$
47,021

Other investments in equity securities
639

 
639

 
$
45,949

 
$
47,660



Equity Method Investments

Wendy’s has a 50% share in the TimWen real estate joint venture and a 20% share in the Brazil JV, both of which are accounted for using the equity method of accounting, under which our results of operations include our share of the income (loss) of the investees in “Other operating income, net.”

A wholly-owned subsidiary of Wendy’s entered into the Brazil JV during the second quarter of 2015 for the operation of Wendy’s restaurants in Brazil.  Wendy’s, Starboard International Holdings B.V. and Infinity Holding E Participações Ltda. contributed $1, $2 and $2, respectively, each receiving proportionate equity interests of 20%, 40% and 40%, respectively.  The Company did not receive any distributions and our share of the Brazil JV’s net losses was $1,022, $1,344 and $1,134 during 2019, 2018 and 2017, respectively. A wholly-owned subsidiary of Wendy’s has loans outstanding to the Brazil JV totaling $15,920 and $12,800 as of December 29, 2019 and December 30, 2018, respectively. The loans are denominated in U.S. Dollars, which is also the functional currency of the subsidiary; therefore, there is no exposure to changes in foreign currency rates. The loans are primarily due in 2020 and bear interest at rates ranging from 3.25% to 6.5% per year. As of December 29, 2019 and December 30, 2018, the Company had reserves of $5,720 and $2,000, respectively, on the loans outstanding to the Brazil JV. See Note 7 for further information.

The carrying value of our investment in TimWen exceeded our interest in the underlying equity of the joint venture by $25,160 and $26,378 as of December 29, 2019 and December 30, 2018, respectively, primarily due to purchase price adjustments from the 2008 merger of Triarc Companies, Inc. and Wendy’s International, Inc. (the “Wendy’s Merger”).

Presented below is activity related to our portion of TimWen and the Brazil JV included in our consolidated balance sheets and consolidated statements of operations as of and for the years ended December 29, 2019, December 30, 2018 and December 31, 2017.
 
Year Ended
 
2019
 
2018
 
2017
Balance at beginning of period
$
47,021

 
$
55,363

 
$
54,545

 
 
 
 
 
 
Investment
—

 
13

 
375

 
 
 
 
 
 
Equity in earnings for the period
10,943

 
10,402

 
9,897

Amortization of purchase price adjustments (a)
(2,270
)
 
(2,326
)
 
(2,324
)
 
8,673

 
8,076

 
7,573

Distributions received
(13,400
)
 
(13,390
)
 
(11,713
)
Foreign currency translation adjustment included in
    “Other comprehensive income (loss), net” and other
3,016

 
(3,041
)
 
4,583

Balance at end of period
$
45,310

 
$
47,021

 
$
55,363

_______________

(a)
Purchase price adjustments that impacted the carrying value of the Company’s investment in TimWen are being amortized over the average original aggregate life of 21 years.

Indirect Investment in Inspire Brands

In connection with the sale of Arby’s Restaurant Group, Inc. (“Arby’s”) during 2011, Wendy’s Restaurants obtained an 18.5% equity interest in ARG Holding Corporation (“ARG Parent”) (through which Wendy’s Restaurants indirectly retained an 18.5% interest in Arby’s). The carrying value of our investment was reduced to zero during 2013 in connection with the receipt of a dividend that was determined to be a return of our investment.

Our 18.5% equity interest was diluted to 12.3% in February 2018, when a subsidiary of ARG Parent acquired Buffalo Wild Wings, Inc. As a result of the acquisition, our diluted ownership interest included both the Arby’s and Buffalo Wild Wings brands under the newly formed combined company, Inspire Brands, Inc. (“Inspire Brands”). In August 2018, the Company sold its remaining 12.3% ownership interest to Inspire Brands for $450,000 and incurred transaction costs of $55, which were recorded to “Investment income, net.” The Company recorded income tax expense of $97,501 on the transaction, of which $95,038 was paid during the fourth quarter of 2018.

Other Investments in Equity Securities

In October 2019, the Company received a $25,000 cash settlement related to a previously held investment. As a result, the Company recorded $24,366 to “Investment income, net” and $634 to “General and administrative” for the reimbursement of related costs during the fourth quarter of 2019.
v3.19.3.a.u2
Properties (Notes)
 12 Months Ended
Dec. 29, 2019
Property, Plant and Equipment [Abstract]  
Properties Properties
 
Year End
 
December 29, 2019
 
December 30, 2018
Land
$
375,109

 
$
377,277

Buildings and improvements
508,602

 
507,219

Leasehold improvements
405,158

 
403,896

Office, restaurant and transportation equipment
279,799

 
266,030

 
1,568,668

 
1,554,422

Accumulated depreciation and amortization
(591,668
)
 
(531,155
)
 
$
977,000

 
$
1,023,267



Depreciation and amortization expense related to properties was $81,219, $79,009 and $81,946 during 2019, 2018 and 2017, respectively.
v3.19.3.a.u2
Goodwill And Other Intangible Assets
 12 Months Ended
Dec. 29, 2019
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets Disclosure [Text Block] Goodwill and Other Intangible Assets

Goodwill activity for 2019 and 2018 was as follows:
 
Year End
 
December 29, 2019
 
December 30, 2018
Balance at beginning of year:
 
 
 
Goodwill, gross
$
757,281

 
$
752,731

Accumulated impairment losses (a)
(9,397
)
 
(9,397
)
Goodwill, net
747,884

 
743,334

Changes in goodwill:
 
 
 
Restaurant acquisitions (b)
6,931

 
7,038

Restaurant dispositions
—

 
(208
)
Currency translation adjustment
1,096

 
(2,280
)
Balance at end of year:


 


Goodwill, gross
765,308

 
757,281

Accumulated impairment losses (a)
(9,397
)
 
(9,397
)
Goodwill, net
$
755,911

 
$
747,884


_______________

(a)
Accumulated impairment losses resulted from the full impairment of goodwill of the Wendy’s international franchise restaurants during the fourth quarter of 2013.

(b)
2019 includes an adjustment to the fair value of net assets acquired in connection with the acquisition of franchised restaurants during 2018. See Note 4 for further information.

As discussed in Note 26, the realignment of our management and operating structure resulted in a change in our operating segments and reporting units as of December 29, 2019. We reallocated goodwill to the new reporting units using a relative fair value approach. In addition, we completed a quantitative assessment of any potential goodwill impairment for our previous North America reporting unit immediately prior to the reallocation and determined the reporting unit was not impaired.

The following table sets forth the reallocation of goodwill to the Company’s segments as of December 29, 2019:
 
Wendy’s U.S.
 
Wendy’s International
 
Global Real Estate & Development
 
Total
Goodwill
$
602,491

 
$
30,872

 
$
122,548

 
$
755,911



The following is a summary of the components of other intangible assets and the related amortization expense:
 
Year End
 
December 29, 2019
 
December 30, 2018
 
Cost
 
Accumulated Amortization
 
Net
 
Cost
 
Accumulated Amortization
 
Net
Indefinite-lived:
 
 
 
 
 
 
 
 
 
 
 
Trademarks
$
903,000

 
$
—

 
$
903,000

 
$
903,000

 
$
—

 
$
903,000

Definite-lived:
 
 
 
 
 
 
 
 
 
 
 
Franchise agreements
348,825

 
(187,063
)
 
161,762

 
348,200

 
(170,134
)
 
178,066

Favorable leases
166,098

 
(47,695
)
 
118,403

 
233,990

 
(79,776
)
 
154,214

Reacquired rights under franchise agreements
10,172

 
(2,766
)
 
7,406

 
11,807

 
(1,971
)
 
9,836

Software
181,666

 
(125,025
)
 
56,641

 
154,919

 
(105,882
)
 
49,037

 
$
1,609,761

 
$
(362,549
)
 
$
1,247,212

 
$
1,651,916

 
$
(357,763
)
 
$
1,294,153



Aggregate amortization expense:
 
Actual for fiscal year:
 
2017
$
47,302

2018
52,064

2019
53,182

Estimate for fiscal year:
 
2020
$
46,666

2021
41,362

2022
37,048

2023
33,854

2024
29,383

Thereafter
155,899
v3.19.3.a.u2
Accrued Expenses and Other Current Liabilities
 12 Months Ended
Dec. 29, 2019
Accrued Liabilities [Abstract]  
Accrued Expenses Accrued Expenses and Other Current Liabilities
 
Year End
 
December 29, 2019
 
December 30, 2018
Legal reserves (a)
$
52,272

 
$
55,883

Accrued compensation and related benefits
56,010

 
37,637

Accrued taxes
23,926

 
20,811

Other
33,064

 
36,305

 
$
165,272

 
$
150,636


_______________

(a)
Includes a legal reserve of $50,000 as of December 29, 2019 and December 30, 2018 for a settlement of the FI Case. See Note 23 for further information. The Company maintains insurance coverage for legal settlements, receivables for which are included in “Accounts and notes receivable, net.” See Note 7 for further information.

After exhaustion of applicable insurance receivables of $25,350, the Company made a payment of $24,650 for the settlement of the FI Case in January 2020.
v3.19.3.a.u2
Long-Term Debt
 12 Months Ended
Dec. 29, 2019
Debt Disclosure [Abstract]  
Long-Term Debt Long-Term Debt

Long-term debt consisted of the following:
 
Year End
 
December 29,
2019
 
December 30,
2018
Series 2019-1 Class A-2 Notes:
 
 
 
3.783% Series 2019-1 Class A-2-I Notes, anticipated repayment date 2026
$
398,000

 
$
—

4.080% Series 2019-1 Class A-2-II Notes, anticipated repayment date 2029
447,750

 
—

Series 2018-1 Class A-2 Notes:
 
 
 
3.573% Series 2018-1 Class A-2-I Notes, anticipated repayment date 2025
441,000

 
445,500

3.884% Series 2018-1 Class A-2-II Notes, anticipated repayment date 2028
465,500

 
470,250

Series 2015-1 Class A-2 Notes:
 
 
 
4.080% Series 2015-1 Class A-2-II Notes, repaid in connection with June 2019 refinancing
—

 
870,750

4.497% Series 2015-1 Class A-2-III Notes, anticipated repayment date 2025
478,750

 
483,750

7% debentures, due in 2025
82,837

 
90,769

Unamortized debt issuance costs
(33,526
)
 
(32,217
)
 
2,280,311

 
2,328,802

Less amounts payable within one year
(22,750
)
 
(23,250
)
Total long-term debt
$
2,257,561

 
$
2,305,552



Aggregate annual maturities of long-term debt, excluding the effect of purchase accounting adjustments, as of December 29, 2019 were as follows:
Fiscal Year
 
2020
$
22,750

2021
22,750

2022
22,750

2023
22,750

2024
22,750

Thereafter
2,207,250

 
$
2,321,000



Senior Notes

Wendy’s Funding, LLC, a limited-purpose, bankruptcy-remote, wholly-owned indirect subsidiary of The Wendy’s Company, is the master issuer (the “Master Issuer”) of outstanding senior secured notes under a securitized financing facility that was entered into in June 2015. As of December 29, 2019, the Master Issuer issued the following outstanding series of fixed rate senior secured notes: (i) 2019-1 Class A-2-I with an initial principal amount of $400,000; (ii) 2019-1 Class A-2-II with an initial principal amount of $450,000; (iii) 2018-1 Class A-2-I with an initial principal amount of $450,000; (iv) 2018-1 Class A-2-II with an initial principal amount of $475,000; and (v) 2015-1 Class A-2-III with an initial principal amount of $500,000 (collectively, the “Class A-2 Notes”). The Master Issuer also issued outstanding Series 2019-1 Variable Funding Senior Secured Notes, Class A-1 (the “Class A-1 Notes”), which allows for the borrowing of up to $150,000 from time to time on a revolving basis using various credit instruments, including a letter of credit facility. As of December 29, 2019, there were no borrowings outstanding under the Class A-1 Notes. The Class A-2 Notes and Class A-1 Notes are collectively 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.

Interest and principal payments on the Class A-2 Notes are payable on a quarterly basis. The requirement to make such quarterly principal payments on the Class A-2 Notes is subject to certain financial conditions set forth in the Indenture. The legal final maturity dates for the Class A-2 Notes range from 2045 through 2049. If the Master Issuer has not repaid or refinanced the Class A-2 Notes prior to their respective anticipated repayment dates, which range from 2025 through 2029, additional interest will accrue pursuant to the Indenture.

The Class A-1 Notes accrue interest at a variable interest rate based on (i) the prime rate, (ii) overnight federal funds rates, (iii) the London interbank offered rate for U.S. Dollars or (iv) with respect to advances made by conduit investors, the weighted average cost of, or related to, the issuance of commercial paper allocated to fund or maintain such advances, in each case plus any applicable margin and as specified in the Class A-1 Note agreement. There is a commitment fee on the unused portion of the Class A-1 Notes which ranges from 0.40% to 0.75% based on utilization. As of December 29, 2019, $24,756 of letters of credit were outstanding against the Class A-1 Notes, which relate primarily to interest reserves required under the Indenture.

Covenants and Restrictions

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 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. In addition, the Indenture and the related management agreement contain various covenants that limit the Company and its subsidiaries’ ability to engage in specified types of transactions, subject to certain exceptions, including, for example, to (i) incur or guarantee additional indebtedness, (ii) sell certain assets, (iii) create or incur liens on certain assets to secure indebtedness or (iv) consolidate, merge, sell or otherwise dispose of all or substantially all of their assets.

In accordance with the Indenture, certain cash accounts have been established with the Indenture trustee for the benefit of the trustee and the noteholders, and are restricted in their use. As of December 29, 2019 and December 30, 2018, Wendy’s Funding had restricted cash of $34,209 and $29,538, 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.

Refinancing Transactions

In June 2019, the Master Issuer completed a refinancing transaction under which the Master Issuer issued the Series 2019-1 Class A-2-I Notes and the Series 2019-1 Class A-2-II Notes. The Master Issuer’s outstanding Series 2015-1 Class A-2-II Notes were redeemed as part of the transaction. As a result, the Company recorded a loss on early extinguishment of debt of $7,150 during 2019, which was comprised of the write-off of certain unamortized deferred financing costs. As part of the June 2019 refinancing transaction, the Master Issuer also issued the Class A-1 Notes. The Company’s previous Series 2018-1 Class A-1 Notes were canceled on the closing date and the letters of credit outstanding against the Series 2018-1 Class A-1 Notes were transferred to the Class A-1 Notes.

In January 2018, the Master Issuer completed a refinancing transaction under which the Master Issuer issued the Series 2018-1 Class A-2-I Notes and the Series 2018-1 Class A-2-II Notes. The net proceeds from the sale of the notes were used to redeem the Master Issuer’s outstanding Series 2015-1 Class A-2-I Notes, to pay prepayment and transaction costs and for general corporate purposes. As a result, the Company recorded a loss on early extinguishment of debt of $11,475 during 2018, which was comprised of the write-off of certain deferred financing costs and a specified make-whole payment.

Debt Issuance Costs

During 2019, 2018 and 2017, the Company incurred debt issuance costs of $14,008, $17,580 and $351 in connection with the June 2019 and January 2018 refinancing transactions. During 2017, the Company also incurred debt issuance costs in connection with the 2015 securitization transaction of $561. 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, 2019, the effective interest rates, including the amortization of debt issuance costs, were 4.7%, 3.8%, 4.1%, 4.0% and 4.2% for the Series 2015-1 Class A-2-III Notes, Series 2018-1 Class A-2-I Notes, Series 2018-1 Class A-2-II Notes, Series 2019-1 Class A-2-I Notes and Series 2019-1 Class A-2-II 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. 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. As a result, the Company recognized a loss on early extinguishment of debt of $1,346 during the fourth quarter of 2019.

Wendy’s U.S. advertising fund has a revolving line of credit of $25,000, which was established to fund the advertising fund operations. During 2018, the Company borrowed and repaid $9,837 and $11,124, respectively, under the line of credit. There were no borrowings or repayments under the line of credit during 2019.

At December 29, 2019, one of Wendy’s Canadian subsidiaries has a revolving credit facility of C$6,000 which bears interest at the Bank of Montreal Prime Rate. The debt is guaranteed by Wendy’s. The full amount of the line was available under this line of credit as of December 29, 2019.

Interest Expense

Interest expense on the Company’s long-term debt was $105,829, $107,929 and $108,472 during 2019, 2018 and 2017, respectively, which was recorded to “Interest expense, net.”

Pledged Assets

The following is a summary of the Company’s assets pledged as collateral for certain debt:
 
Year End
 
December 29,
2019
Cash and cash equivalents
$
33,042

Restricted cash and other assets (including long-term)
34,214

Accounts and notes receivable, net
31,879

Inventories
3,859

Properties
67,550

Other intangible assets
1,061,605

 
$
1,232,149
v3.19.3.a.u2
Fair Value Measurements
 12 Months Ended
Dec. 29, 2019
Fair Value Disclosures [Abstract]  
Fair Value Disclosures Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Valuation techniques under the accounting guidance related to fair value measurements are based on observable and unobservable inputs. Observable inputs reflect readily obtainable data from independent sources, while unobservable inputs reflect our market assumptions. These inputs are classified into the following hierarchy:

•
Level 1 Inputs - Quoted prices for identical assets or liabilities in active markets.

•
Level 2 Inputs - Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

•
Level 3 Inputs - Pricing inputs are unobservable for the assets or liabilities and include situations where there is little, if any, market activity for the assets or liabilities. The inputs into the determination of fair value require significant management judgment or estimation.

Financial Instruments

The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments:
 
December 29, 2019
 
December 30, 2018
 
 
 
Carrying
Amount
 
Fair
Value
 
Carrying
Amount
 
Fair
Value
 
Fair Value
Measurements
Financial assets
 
 
 
 
 
 
 
 
 
Cash equivalents
$
114,992

 
$
114,992

 
$
222,228

 
$
222,228

 
Level 1
Other investments in equity securities (a)
639

 
1,649

 
639

 
2,181

 
Level 3
 
 
 
 
 
 
 
 
 
 
Financial liabilities
 
 
 
 
 
 
 
 
 
Series 2019-1 Class A-2-I Notes (b)
398,000

 
405,152

 
—

 
—

 
Level 2
Series 2019-1 Class A-2-II Notes (b)
447,750

 
459,136

 
—

 
—

 
Level 2
Series 2018-1 Class A-2-I Notes (b)
441,000

 
444,859

 
445,500

 
424,026

 
Level 2
Series 2018-1 Class A-2-II Notes (b)
465,500

 
475,718

 
470,250

 
439,353

 
Level 2
Series 2015-1 Class A-2-II Notes (b)
—

 
—

 
870,750

 
865,342

 
Level 2
Series 2015-1 Class A-2-III Notes (b)
478,750

 
490,531

 
483,750

 
482,522

 
Level 2
7% debentures, due in 2025 (b)
82,837

 
94,838

 
90,769

 
102,750

 
Level 2
Guarantees of franchisee loan obligations (c)
1

 
1

 
17

 
17

 
Level 3
_______________

(a)
The fair values of our investments are not significant and are based on our review of information provided by the investment managers or investees which was based on (1) valuations performed by the investment managers or investees, (2) quoted market or broker/dealer prices for similar investments and (3) quoted market or broker/dealer prices adjusted by the investment managers for legal or contractual restrictions, risk of nonperformance or lack of marketability, depending upon the underlying investments.

(b)
The fair values were based on quoted market prices in markets that are not considered active markets.

(c)
Wendy’s has provided loan guarantees to various lenders on behalf of franchisees entering into debt arrangements for equipment financing. We have accrued a liability for the fair value of these guarantees, the calculation of which was based upon a weighted average risk percentage.

The carrying amounts of cash, accounts payable and accrued expenses approximate fair value due to the short-term nature of those items. The carrying amounts of accounts and notes receivable, net (both current and non-current) approximate fair value due to the effect of the related allowance for doubtful accounts. Our cash equivalents and guarantees are the only financial assets and liabilities measured and recorded at fair value on a recurring basis.

Non-Recurring Fair Value Measurements

Assets and liabilities remeasured to fair value on a non-recurring basis resulted in impairment that we have recorded to “Impairment of long-lived assets” in our consolidated statements of operations.

Total impairment losses may reflect the impact of remeasuring long-lived assets held and used (including land, buildings, leasehold improvements, favorable lease assets and ROU assets) to fair value as a result of (1) declines in operating performance at Company-operated restaurants and (2) the Company’s decision to lease and/or sublease the land and/or buildings to franchisees in connection with the sale or anticipated sale of restaurants, including any subsequent lease modifications. The fair values of long-lived assets held and used presented in the tables below represent the remaining carrying value and were estimated based on either discounted cash flows of future anticipated lease and sublease income or discounted cash flows of future anticipated Company-operated restaurant performance.

Total impairment losses may also include the impact of remeasuring long-lived assets held for sale, which primarily include surplus properties. The fair values of long-lived assets held for sale presented in the tables below represent the remaining carrying value and were estimated based on current market values. See Note 17 for further information on impairment of our long-lived assets.

 
 
 
Fair Value Measurements
 
2019 Total Losses
 
December 29,
2019
 
Level 1
 
Level 2
 
Level 3
 
Held and used
$
3,582

 
$
—

 
$
—

 
$
3,582

 
$
5,602

Held for sale
988

 
—

 
—

 
988

 
1,397

Total
$
4,570

 
$
—

 
$
—

 
$
4,570

 
$
6,999

    
 
 
 
Fair Value Measurements
 
2018 Total Losses
 
December 30,
2018
 
Level 1
 
Level 2
 
Level 3
 
Held and used
$
462

 
$
—

 
$
—

 
$
462

 
$
4,343

Held for sale
1,031

 
—

 
—

 
1,031

 
354

Total
$
1,493

 
$
—

 
$
—

 
$
1,493

 
$
4,697
v3.19.3.a.u2
Income Taxes
 12 Months Ended
Dec. 29, 2019
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes

Income before income taxes is set forth below:
 
Year Ended
 
2019
 
2018
 
2017
Domestic
$
160,474

 
$
560,776

 
$
86,892

Foreign (a)
11,007

 
14,140

 
14,127

 
$
171,481

 
$
574,916

 
$
101,019


_______________

(a)
Excludes foreign income of domestic subsidiaries.

The (provision for) benefit from income taxes is set forth below:
 
Year Ended
 
2019
 
2018
 
2017
Current:
 
 
 
 
 
U.S. federal
$
(18,421
)
 
$
(109,078
)
 
$
(13,092
)
State
(6,093
)
 
(2,661
)
 
(4,055
)
Foreign
(9,190
)
 
(9,630
)
 
(9,173
)
Current tax provision
(33,704
)
 
(121,369
)
 
(26,320
)
Deferred:
 
 
 
 
 
U.S. federal
1,585

 
5,071

 
127,592

State
(2,449
)
 
441

 
(7,729
)
Foreign
27

 
1,056

 
(533
)
Deferred tax (provision) benefit
(837
)
 
6,568

 
119,330

Income tax (provision) benefit
$
(34,541
)
 
$
(114,801
)
 
$
93,010



Deferred tax assets (liabilities) are set forth below:
 
Year End
 
December 29, 2019
 
December 30, 2018
Deferred tax assets:
 
 
 
Operating and finance lease liabilities
$
345,173

 
115,322

Net operating loss and credit carryforwards
59,597

 
59,690

Unfavorable leases
26,020

 
35,801

Deferred revenue
23,907

 
23,904

Accrued compensation and related benefits
18,477

 
14,804

Accrued expenses and reserves
13,786

 
14,840

Deferred rent
492

 
16,807

Other
3,757

 
5,016

Valuation allowances
(45,183
)
 
(42,175
)
Total deferred tax assets
446,026

 
244,009

Deferred tax liabilities:
 
 
 
Operating and finance lease assets (a)
(313,803
)
 
(56,798
)
Intangible assets
(311,596
)
 
(324,394
)
Fixed assets (a)
(60,788
)
 
(105,545
)
Other
(30,598
)
 
(26,432
)
Total deferred tax liabilities
(716,785
)
 
(513,169
)
 
$
(270,759
)
 
$
(269,160
)

_______________

(a)
The Company’s adoption of the lease accounting standard in 2019 caused additional deferred taxes to be recorded as a result of the ROU assets and lease liabilities recorded on the consolidated balance sheet. Additionally, the deferred taxes existing at December 30, 2018 related to finance leases have been reclassified from fixed assets to finance lease liabilities and finance lease assets, consistent with the reclassifications made on the consolidated balance sheet upon adoption. See “New Accounting Standards Adopted” in Note 1 for further information regarding the adoption of the lease accounting standard.

The amounts and expiration dates of net operating loss and tax credit carryforwards are as follows:
 
Amount
 
Expiration
Tax credit carryforwards:
 
 
 
U.S. federal foreign tax credits
$
10,429

 
2022-2030
State tax credits
563

 
2020-2023
Foreign tax credits of non-U.S. subsidiaries
3,992

 
Not applicable
Total
$
14,984

 
 
 
 
 
 
Net operating loss carryforwards:
 
 
 
State and local net operating loss carryforwards
$
1,161,051

 
2020-2035
Foreign net operating loss carryforwards
225

 
2023-2027
Total
$
1,161,276

 
 


The Company’s valuation allowances of $45,183 and $42,175 as of December 29, 2019 and December 30, 2018, respectively, relate to foreign and state tax credit carryforwards and net operating loss carryforwards. Valuation allowances increased $3,008 and $35,895 during 2019 and 2017, respectively, and decreased $5,120 during 2018. The change during 2017 was primarily a result of the Tax Cuts and Jobs Act (the “Tax Act”) and our system optimization initiative. The reduction in the U.S. corporate rate from 35% to 21% decreases our ability to utilize foreign tax credit carryforwards after 2017 and we expect them to expire
unused. The relative presence of Company-operated restaurants in various states impacts expected future state taxable income available to utilize state net operating loss carryforwards.

Major Tax Legislation

On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act made broad and complex changes to the U.S. tax code that affects 2017 and subsequent years, including but not limited to (1) requiring a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries, (2) bonus depreciation that will allow for full expensing of qualified property, (3) reducing the U.S. federal corporate tax rate from 35% to 21% in years 2018 and forward, (4) a tax on global intangible low-taxed income (“GILTI”) and (5) limitations on the deductibility of certain executive compensation.

During 2017, we recorded a net tax benefit of $140,379 primarily consisting of a benefit of $164,893 for the impact of the corporate rate reduction on our net deferred tax liabilities, partially offset by a net expense of $22,209 for the international-related provisions of the Tax Act. In 2018, we recorded a net tax expense of $2,159 consisting of $2,454 related to the impact of the corporate rate reduction on our net deferred tax liabilities and state taxes and a net expense of $991 related to the limitations on the deductibility of certain executive compensation, partially offset by $1,286 for the net benefit of foreign tax credits.
_______________

The current portion of refundable income taxes was $13,555 and $14,475 as of December 29, 2019 and December 30, 2018, respectively, and is included in “Accounts and notes receivable, net.” There were no long-term refundable income taxes as of December 29, 2019 and December 30, 2018.

The reconciliation of income tax computed at the U.S. federal statutory rate of 21% for 2019 and 2018 and 35% for 2017 to reported income tax is set forth below:
 
Year Ended
 
2019
 
2018 (a)
 
2017 (a)
Income tax provision at the U.S. federal statutory rate
$
(36,011
)
 
$
(120,732
)
 
$
(35,357
)
State income tax provision, net of U.S. federal income tax effect
(6,470
)
 
(221
)
 
(6,451
)
Federal rate change
—

 
—

 
164,893

Prior years’ tax matters (b)
6,135

 
(9,970
)
 
15,964

Excess federal tax benefits from share-based compensation
5,841

 
10,250

 
5,196

Domestic tax planning initiatives
—

 
—

 
4,282

Foreign and U.S. tax effects of foreign operations
250

 
(856
)
 
2,408

Valuation allowances
(2,833
)
 
5,120

 
(35,895
)
Non-deductible goodwill (c)
—

 
(41
)
 
(15,458
)
Transition tax
—

 
—

 
(4,446
)
Unrepatriated earnings
(402
)
 
(326
)
 
(1,801
)
Non-deductible expenses and other
(1,051
)
 
1,975

 
(325
)
 
$
(34,541
)
 
$
(114,801
)
 
$
93,010

_______________

(a)
2018 includes the following impacts associated with the Tax Act: (1) a net expense of $2,426 related to the impact of the corporate rate reduction on our net deferred tax liabilities, (2) a net expense of $991 related to the limitations on the deductibility of certain executive compensation, (3) a net expense of $28 of state income tax and (4) a net benefit of $1,286 related to foreign tax credits. 2017 includes the following impacts associated with the Tax Act: (1) the revaluation of our U.S. net deferred tax liability at 21%, resulting in a benefit of $164,893, (2) a full valuation allowance of $15,962 on our U.S. foreign tax credit carryforwards due to the decrease in the U.S. federal tax rate, (3) a one-time transition tax of $4,446, (4) deferred tax on unrepatriated earnings of $1,801 and (5) other net expenses of $2,305.

(b)
2019 primarily relates to a reduction in unrecognized tax benefits due to a lapse of statute of limitations. 2018 includes expense of $9,542 related to the Tax Act, which was partially offset by a $7,535 benefit reported in “Valuation allowances.”
2017 primarily relates to certain state net operating loss carryforwards, previously considered worthless, that existed at the beginning of the year. The Company changed its judgment during 2017 regarding the likelihood of the utilization of these carryforwards. Because of this change, the Company recognized a deferred tax asset of $16,643, net of federal benefit, which was partially offset by an expense reported in “Valuation allowances” of $13,667.

(c)
Substantially all of the goodwill included in the net gain (loss) on sales of restaurants in 2018 and 2017 under our system optimization initiative was non-deductible for tax purposes. See Note 3 for further information.

The Company participates in the Internal Revenue Service (the “IRS”) Compliance Assurance Process (“CAP”). As part of CAP, tax years are examined on a contemporaneous basis so that all or most issues are resolved prior to the filing of the tax return. As such, our tax returns for fiscal years 2009 through 2017 have been settled. The statute of limitations for the Company’s state tax returns vary, but generally the Company’s state income tax returns from its 2016 fiscal year and forward remain subject to examination. 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

As of December 29, 2019, the Company had unrecognized tax benefits of $22,323, which, if resolved favorably would reduce income tax expense by $17,987. A reconciliation of the beginning and ending amount of unrecognized tax benefits follows:
 
Year End
 
December 29,
2019
 
December 30,
2018
 
December 31,
2017
Beginning balance
$
27,632

 
$
28,848

 
$
19,545

Additions:
 
 
 
 
 
Tax positions of current year
1,356

 
3,874

 
8,251

Tax positions of prior years
—

 
2,598

 
1,704

Reductions:
 
 
 
 
 
Tax positions of prior years
(227
)
 
(7,553
)
 
(295
)
Settlements
—

 
(21
)
 
(34
)
Lapse of statute of limitations
(6,438
)
 
(114
)
 
(323
)
Ending balance
$
22,323

 
$
27,632

 
$
28,848



The increase in unrecognized tax benefits in 2019 was primarily related to the uncertainty of the income tax consequences of a cash settlement related to a previously held investment. The addition of unrecognized tax benefits in 2018 was primarily related to the sale of our ownership interest in Inspire Brands, and the reduction of unrecognized benefits in 2018 was primarily related to settlements with various taxing jurisdictions, including amended returns that were filed in 2017. The addition of unrecognized tax benefits in 2017 was primarily related to the filing of amended returns in various jurisdictions, as well as an unfavorable court decision which caused us to change our judgment about the technical merits of a filing position.

During 2020, we believe it is reasonably possible the Company will reduce unrecognized tax benefits by up to $1,661 due primarily to the lapse of statutes of limitations and expected settlements.

During 2019, 2018 and 2017, the Company recognized $(489), $(12) and $161 of (income) expense for interest and $81, $309 and $106 of income for penalties, respectively, related to uncertain tax positions. The Company has $946 and $1,428 accrued for interest and $118 and $199 accrued for penalties as of December 29, 2019 and December 30, 2018, respectively.
v3.19.3.a.u2
Stockholders' Equity
 12 Months Ended
Dec. 29, 2019
Stockholders' Equity Note [Abstract]  
Stockholders' Equity Stockholders’ Equity

Dividends

During 2019, 2018 and 2017, The Wendy’s Company paid dividends per share of $0.42, $0.34 and $0.28, respectively.

Treasury Stock

There were 470,424 shares of common stock issued at the beginning and end of 2019, 2018 and 2017. Treasury stock activity for 2019, 2018 and 2017 was as follows:
 
Treasury Stock
 
2019
 
2018
 
2017
Number of shares at beginning of year
239,191

 
229,912

 
223,850

Repurchases of common stock
10,158

 
15,808

 
8,607

Common shares issued:
 
 
 
 
 
Stock options, net
(2,912
)
 
(5,824
)
 
(1,853
)
Restricted stock, net
(834
)
 
(627
)
 
(612
)
Director fees
(14
)
 
(15
)
 
(15
)
Other
(54
)
 
(63
)
 
(65
)
Number of shares at end of year
245,535

 
239,191

 
229,912



Repurchases of Common Stock

In February 2019, our Board of Directors authorized a repurchase program for up to $225,000 of our common stock through March 1, 2020, when and if market conditions warranted and to the extent legally permissible. In connection with the February 2019 authorization, the remaining portion of the Company’s previous November 2018 repurchase authorization for up to $220,000 of our common stock was canceled. In November 2019, the Company entered into an accelerated share repurchase agreement (the “2019 ASR Agreement”) with a third-party financial institution to repurchase common stock as part of the Company’s existing share repurchase program. Under the 2019 ASR Agreement, the Company paid the financial institution an initial purchase price of $100,000 in cash and received an initial delivery of 4,051 shares of common stock, representing an estimated 85% of the total shares expected to be delivered under the 2019 ASR Agreement. In February 2020, the Company completed the 2019 ASR Agreement and received an additional 628 shares of common stock. The total number of shares of common stock ultimately purchased by the Company under the 2019 ASR Agreement was based on the average of the daily volume-weighted average prices of the common stock during the term of the 2019 ASR Agreement, less an agreed upon discount. In total, 4,679 shares were delivered under the 2019 ASR Agreement at an average purchase price of $21.37 per share.

In addition to the shares repurchased in connection with the 2019 ASR Agreement, during 2019, the Company repurchased 6,107 shares under the November 2018 and February 2019 authorizations referenced above with an aggregate purchase price of $117,685, of which $1,801 was accrued at December 29, 2019, and excluding commissions of $86. As of December 29, 2019, the Company had $43,772 of availability remaining under its February 2019 authorization. Subsequent to December 29, 2019 through February 18, 2020, the Company repurchased 1,312 shares with an aggregate purchase price of $28,770, excluding commissions of $18. After taking into consideration these repurchases, with the completion of the 2019 ASR Agreement in February 2020 described above, the Company completed its February 2019 authorization.

In February 2020, our Board of Directors authorized the repurchase of up to $100,000 of our common stock through February 28, 2021, when and if market conditions warrant and to the extent legally permissible.

In February 2018, our Board of Directors authorized a repurchase program for up to $175,000 of our common stock through March 3, 2019, when and if market conditions warranted and to the extent legally permissible. In November 2018, our Board of Directors approved an additional share repurchase program for up to $220,000 of our common stock through December 27, 2019, when and if market conditions warranted and to the extent legally permissible. In November 2018, the Company entered into an accelerated share repurchase agreement (the “2018 ASR Agreement”) with a third-party financial institution to repurchase common stock as part of the Company’s existing share repurchase programs. Under the 2018 ASR Agreement, the Company paid the financial institution an initial purchase price of $75,000 in cash and received an initial delivery of 3,645 shares of common stock, representing an estimated 85% of the total shares expected to be delivered under the 2018 ASR Agreement. In December 2018, the Company completed the 2018 ASR Agreement and received an additional 720 shares of common stock. The total number of shares of common stock ultimately purchased by the Company under the 2018 ASR Agreement was based on the average of the daily volume-weighted average prices of the common stock during the term of the 2018 ASR Agreement, less an agreed upon discount. In addition to the shares repurchased in connection with the 2018 ASR Agreement, during 2018, the Company repurchased
10,058 shares under the February 2018 and November 2018 authorizations with an aggregate purchase price of $172,584, of which $1,827 was accrued at December 30, 2018, and excluding commissions of $141.

In February 2017, our Board of Directors authorized a repurchase program for up to $150,000 of our common stock through March 4, 2018, when and if market conditions warranted and to the extent legally permissible. During 2017, the Company repurchased 8,607 shares under the February 2017 authorization with an aggregate purchase price of $127,367, of which $1,259 was accrued at December 31, 2017, and excluding commissions of $123. The Company completed the February 2017 authorization during 2018 with the repurchase of 1,385 shares with an aggregate purchase price of $22,633, excluding commissions of $19.

Preferred Stock

There were 100,000 shares authorized and no shares issued of preferred stock throughout 2019, 2018 and 2017.

Accumulated Other Comprehensive Loss

The following table provides a rollforward of the components of accumulated other comprehensive income (loss), net of tax as applicable:
 
Foreign Currency Translation
 
Cash Flow Hedges (a)
 
Pension (b)
 
Total
Balance at January 1, 2017
$
(60,299
)
 
$
(1,797
)
 
$
(1,145
)
 
$
(63,241
)
Current-period other comprehensive income
15,150

 
1,797

 
96

 
17,043

Balance at December 31, 2017
(45,149
)
 
—

 
(1,049
)
 
(46,198
)
Current-period other comprehensive (loss) income
(16,524
)
 
—

 
1,049

 
(15,475
)
Balance at December 30, 2018
(61,673
)
 
—

 
—

 
(61,673
)
Current-period other comprehensive income
7,845

 
—

 
—

 
7,845

Balance at December 29, 2019
$
(53,828
)
 
$
—

 
$
—

 
$
(53,828
)

_______________

(a)
During 2015, the Company terminated seven forward-starting interest rate swaps designated as cash flow hedges, which had an original maturity date of December 31, 2017. As a result, current-period other comprehensive income for 2017 includes the reclassification of unrealized losses on cash flow hedges of $1,797 from “Accumulated other comprehensive loss” to our consolidated statement of operations consisting of $2,894 recorded to “Interest expense, net,” net of the related income tax benefit of $1,097 recorded to “(Provision for) benefit from income taxes.”

(b) During 2018, the Company terminated two frozen defined benefit plans. See Note 19 for further information.
v3.19.3.a.u2
Share-Based Compensation
 12 Months Ended
Dec. 29, 2019
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Share-Based Compensation Share-Based Compensation

The Company has the ability to grant stock options, stock appreciation rights, restricted stock, restricted stock units, other stock-based awards and performance compensation awards to current or prospective employees, directors, officers, consultants or advisors pursuant to the Company’s 2010 Omnibus Award Plan (as amended, the “2010 Plan”). The 2010 Plan was initially adopted with shareholder approval in May 2010 and was amended with shareholder approval in June 2015 to, among other things, increase the number of shares of common stock available for issuance under the plan. All equity grants during 2019, 2018 and 2017 were issued from the 2010 Plan, and the 2010 Plan is currently the only equity plan from which future equity awards may be granted. As of December 29, 2019, there were approximately 22,440 shares of common stock available for future grants under the 2010 Plan. During the periods presented in the consolidated financial statements, the Company settled all exercises of stock options and vesting of restricted shares, including performance shares, with treasury shares.

Stock Options

The Company’s current outstanding stock options have maximum contractual terms of 10 years and vest ratably over three years or cliff vest after 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. The fair value of stock options on the date of grant is calculated using the Black-Scholes Model. The aggregate intrinsic value of an option is the amount by which the fair value of the underlying stock exceeds its exercise price.

The following table summarizes stock option activity during 2019:
 
Number of Options
 
Weighted
Average
Exercise
Price
 
Weighted
Average
Remaining
Contractual
Life in Years
 
Aggregate
Intrinsic
Value
Outstanding at December 30, 2018
12,677

 
$
11.86

 
 
 
 
Granted
2,622

 
19.71

 
 
 
 
Exercised
(2,934
)
 
9.75

 
 
 
 
Forfeited and/or expired
(428
)
 
16.77

 
 
 
 
Outstanding at December 29, 2019
11,937

 
$
13.92

 
6.77
 
$
98,316

Vested or expected to vest at December 29, 2019
11,814

 
$
13.87

 
6.75
 
$
97,896

Exercisable at December 29, 2019
7,482

 
$
11.05

 
5.44
 
$
83,113



The total intrinsic value of options exercised during 2019, 2018 and 2017 was $26,947, $62,744 and $14,624, respectively. The weighted average grant date fair value of stock options granted during 2019, 2018 and 2017 was $3.40, $4.12 and $3.12, respectively.

The weighted average grant date fair value of stock options was determined using the following assumptions:
 
2019
 
2018
 
2017
Risk-free interest rate
1.57
%
 
2.77
%
 
1.94
%
Expected option life in years
4.50

 
5.62

 
5.62

Expected volatility
23.55
%
 
24.27
%
 
23.88
%
Expected dividend yield
2.03
%
 
1.84
%
 
1.82
%


The risk-free interest rate represents the U.S. Treasury zero-coupon bond yield correlating to the expected life of the stock options granted. The expected option life represents the period of time that the stock options granted are expected to be outstanding based on historical exercise trends for similar grants. The expected volatility is based on the historical market price volatility of the Company as well as our industry peer group. 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 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. Employee stock option awards have characteristics significantly different from those of traded options and changes in the subjective input assumptions can materially affect the fair value estimates.

Restricted Shares

The Company grants RSAs and RSUs, which primarily cliff vest after 1 to 3 years. For the purposes of our disclosures, the term “Restricted Shares” applies to RSAs and RSUs collectively unless otherwise noted. The fair value of Restricted Shares granted is determined using the average of the high and low trading prices of our common stock on the date of grant.

The following table summarizes activity of Restricted Shares during 2019:
 
Number of Restricted Shares
 
Weighted
Average
Grant Date Fair Value
Non-vested at December 30, 2018
1,321

 
$
13.65

Granted
358

 
19.51

Vested
(521
)
 
11.45

Forfeited
(87
)
 
15.78

Non-vested at December 29, 2019
1,071

 
$
16.46



The total fair value of Restricted Shares that vested in 2019, 2018 and 2017 was $9,996, $10,060 and $10,004, respectively.

Performance Shares

The Company grants performance-based awards to certain officers and key employees. The vesting of these awards is contingent upon meeting one or more defined operational or financial goals (a performance condition) or common stock share prices (a market condition). 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 2019, 2018 and 2017 were determined using the average of the high and low trading prices of our common stock on the date of grant. 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 2019, 2018 and 2017 were 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 average of the high and low trading prices of our common stock on the date of grant.

The input variables are noted in the table below:
 
2019
 
2018
 
2017
Risk-free interest rate
2.51
%
 
2.38
%
 
1.44
%
Expected life in years
3.00

 
3.00

 
3.00

Expected volatility
23.19
%
 
24.97
%
 
25.06
%
Expected dividend yield (a)
0.00
%
 
0.00
%
 
0.00
%
_______________

(a)
The Monte Carlo method assumes a reinvestment of dividends.

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 following table summarizes activity of performance shares at Target during 2019:
 
Performance Condition Awards
 
Market Condition Awards
 
Shares
 
Weighted
Average
Grant Date Fair Value
 
Shares
 
Weighted
Average
Grant Date Fair Value
Non-vested at December 30, 2018
598

 
$
12.32

 
518

 
$
14.22

Granted
155

 
17.85

 
130

 
21.36

Dividend equivalent units issued (a)
10

 
—

 
8

 
—

Vested (b)
(278
)
 
9.44

 
(256
)
 
10.25

Forfeited
(46
)
 
16.13

 
(38
)
 
19.56

Non-vested at December 29, 2019
439

 
$
15.75

 
362

 
$
19.09

_______________

(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 and market condition awards exclude the vesting of an additional 169 and 157 shares, respectively, which resulted from the performance of the awards exceeding Target.

The total fair value of performance condition awards that vested in 2019, 2018 and 2017 was $7,720, $3,681 and $5,666, respectively. The total fair value of market condition awards that vested in 2019 and 2018 was $7,135 and $3,143, respectively. No market condition awards vested in 2017.

Modifications of Share-Based Awards

During 2019, 2018 and 2017, the Company modified the terms of awards granted to ten, eight and 31 employees, respectively, in connection with its IT realignment and G&A realignment plans discussed in Note 5. These modifications resulted in the accelerated vesting of certain stock options in connection with the termination of such employees. As a result, during 2019, 2018 and 2017, the Company recognized an increase in share-based compensation of $1,011, $1,238 and $4,930, respectively, which was included in “Reorganization and realignment costs.”

Share-Based Compensation

Total share-based compensation and the related income tax benefit recognized in the Company’s consolidated statements of operations were as follows:
 
Year Ended
 
2019
 
2018
 
2017
Stock options
$
7,685

 
$
7,172

 
$
6,923

Restricted shares (a)
5,762

 
6,030

 
5,778

Performance shares:
 
 
 
 
 
Performance condition awards
2,195

 
1,491

 
1,764

Market condition awards
2,023

 
1,987

 
1,533

Modifications, net
1,011

 
1,238

 
4,930

Share-based compensation
18,676

 
17,918

 
20,928

Less: Income tax benefit
(2,990
)
 
(3,418
)
 
(4,985
)
Share-based compensation, net of income tax benefit
$
15,686

 
$
14,500

 
$
15,943

_______________

(a)
2019, 2018 and 2017 include $396, $319 and $197, respectively, related to retention awards in connection with the Company’s G&A realignment plan, which is included in “Reorganization and realignment costs.” See Note 5 for further information.

As of December 29, 2019, there was $20,978 of total unrecognized share-based compensation, which will be recognized over a weighted average amortization period of 2.11 years.
v3.19.3.a.u2
Impairment of Long-Lived Assets
 12 Months Ended
Dec. 29, 2019
Asset Impairment Charges [Abstract]  
Impairment of Long-Lived Assets Impairment of Long-Lived Assets

The Company records impairment charges as a result of (1) 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, (2) the deterioration in operating performance of certain Company-operated restaurants and (3) closing Company-operated restaurants and classifying such surplus properties as held for sale.

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:”
 
 
Year Ended
 
 
2019
 
2018
 
2017
Restaurants leased or subleased to franchisees
 
$
5,308

 
$
283

 
$
244

Company-operated restaurants
 
294

 
4,060

 
3,169

Surplus properties
 
1,397

 
354

 
684

 
 
$
6,999

 
$
4,697

 
$
4,097
v3.19.3.a.u2
Investment Income, Net (Notes)
 12 Months Ended
Dec. 29, 2019
Investment Income, Net [Abstract]  
Investment Income, Net Investment Income, Net
 
Year Ended
 
2019
 
2018
 
2017
Gain on sale of investments, net (a) (b)
$
24,496

 
$
450,000

 
$
2,570

Other than temporary loss on other investments in equity securities
—

 
—

 
(258
)
Other, net
1,102

 
736

 
391

 
$
25,598

 
$
450,736

 
$
2,703

_______________

(a)
In October 2019, the Company received a $25,000 cash settlement related to a previously held investment. As a result, the Company recorded $24,366 to “Investment income, net” and $634 to “General and administrative” for the reimbursement of related costs.

(b)
During 2018, the Company sold its remaining ownership interest in Inspire Brands for $450,000. See Note 8 for further information.
v3.19.3.a.u2
Retirement Benefit Plans
 12 Months Ended
Dec. 29, 2019
Retirement Benefits [Abstract]  
Pension and Other Postretirement Benefits Disclosure Retirement Benefit Plans

401(k) Plan

The Company has a 401(k) defined contribution plan (the “401(k) Plan”) for employees who meet certain minimum requirements and elect to participate. The 401(k) Plan permits employees to contribute up to 75% of their compensation, subject to certain limitations, and provides for matching employee contributions up to 4% of compensation and for discretionary profit sharing contributions. In connection with the matching and profit sharing contributions, the Company recognized compensation expense of $4,631, $4,619 and $4,704 in 2019, 2018 and 2017, respectively.

Pension Plans

The Company maintained two domestic qualified defined benefit plans, the benefits under which were frozen in 1988 and for which the Company had no unrecognized prior service cost. Arby’s employees who were eligible to participate through 1988 (the “Eligible Arby’s Employees”) were covered under one of these plans. Pursuant to the terms of the Arby’s sale agreement, Wendy’s Restaurants retained the liabilities related to the Eligible Arby’s Employees under these plans and received $400 from the buyer for the unfunded liability related to the Eligible Arby’s Employees. The measurement date used by the Company in determining amounts related to its defined benefit plans was the same as the Company’s fiscal year end. During 2018, the Company terminated the defined benefit plans, resulting in a settlement loss of $1,335 recorded to “Reorganization and realignment costs.”

Wendy’s Executive Plans

In conjunction with the Wendy’s Merger, amounts due under supplemental executive retirement plans (collectively, the “SERP”) were funded into a restricted account. As of January 1, 2011, participation in the SERP was frozen to new entrants and future contributions, and existing participants’ balances only earn annual interest. The corresponding SERP liabilities have been included in “Accrued expenses and other current liabilities” and “Other liabilities” and, in the aggregate, were $662 and $1,257 as of December 29, 2019 and December 30, 2018, respectively.

Effective January 1, 2017, the Company implemented a non-qualified, unfunded deferred compensation plan for management and highly compensated employees, whereby participants may defer all or a portion of their base compensation and certain incentive awards on a pre-tax basis. The Company credits the amounts deferred with earnings based on the investment options selected by the participants. The Company may also make discretionary contributions to the plan. The total of participant deferrals was $774 and $444 at December 29, 2019 and December 30, 2018, respectively, which were included in “Other liabilities.”
v3.19.3.a.u2
Leases
 12 Months Ended
Dec. 29, 2019
Leases [Abstract]  
Leases, Company as Lessee Leases

Nature of Leases

The Company operates restaurants that are located on sites owned by us and sites leased by us from third parties. In addition, the Company owns sites and leases sites from third parties, which it leases and/or subleases to franchisees. At December 29, 2019, Wendy’s and its franchisees operated 6,788 Wendy’s restaurants. Of the 357 Company-operated Wendy’s restaurants at December 29, 2019, Wendy’s owned the land and building for 143 restaurants, owned the building and held long-term land leases for 145 restaurants and held leases covering the land and building for 69 restaurants. Wendy’s also owned 512 and leased 1,248 properties that were either leased or subleased principally to franchisees. The Company also leases restaurant, office and transportation equipment.

Company as Lessee

The components of lease cost for 2019 are as follows:
 
Year Ended
 
2019
Finance lease cost:
 
Amortization of finance lease assets
$
11,241

Interest on finance lease liabilities
37,012

 
48,253

Operating lease cost
90,537

Variable lease cost (a)
58,978

Short-term lease cost
4,717

Total operating lease cost (b)
154,232

Total lease cost
$
202,485

_______________

(a)
Includes expenses for executory costs of $37,758, for which the Company is reimbursed by sublessees.

(b)
Includes $123,899 recorded to “Franchise rental expense” for leased properties that are subsequently leased to franchisees and $27,419 recorded to “Cost of sales” for leases for Company-operated restaurants.

The components of rental expense for operating leases for 2018 and 2017, as accounted for under previous guidance, were as follows:
 
Year Ended
 
2018
 
2017
Rental expense:
 
 
 
Minimum rentals
$
95,749

 
$
90,889

Contingent rentals
18,971

 
19,021

Total rental expense (a)
$
114,720

 
$
109,910

_______________

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

Accumulated amortization related to finance leases was $33,187 at December 30, 2018. Amortization of finance lease assets was $11,603 and $9,025 for 2018 and 2017, respectively.

The following table includes supplemental cash flow and non-cash information related to leases:
 
Year Ended
 
2019
Cash paid for amounts included in the measurement of lease liabilities:
 
Operating cash flows from finance leases
$
39,887

Operating cash flows from operating leases
91,824

Financing cash flows from finance leases
6,835

Right-of-use assets obtained in exchange for lease obligations:
 
Finance lease liabilities
50,061

Operating lease liabilities
15,411



The following table includes supplemental information related to leases:
 
Year End
 
December 29, 2019
Weighted-average remaining lease term (years):
 
Finance leases
17.1

Operating leases
15.4

 
 
Weighted average discount rate:
 
Finance leases
9.87
%
Operating leases
5.09
%
 
 
Supplemental balance sheet information:
 
Finance lease assets, gross
$
242,889

Accumulated amortization
(42,745
)
Finance lease assets
200,144

Operating lease assets
857,199



The following table illustrates the Company’s future minimum rental payments for non-cancelable leases as of December 29, 2019:
 
Finance
Leases
 
Operating
Leases
Fiscal Year
Company-Operated
 
Franchise
and Other
 
Company-Operated
 
Franchise
and Other
2020
$
3,088

 
$
47,041

 
$
19,971

 
$
70,301

2021
3,220

 
46,932

 
19,783

 
70,272

2022
3,270

 
48,079

 
19,473

 
70,176

2023
3,223

 
49,709

 
19,439

 
70,026

2024
3,316

 
50,069

 
19,385

 
69,901

Thereafter
40,096

 
664,005

 
183,460

 
755,026

Total minimum payments
$
56,213

 
$
905,835

 
$
281,511

 
$
1,105,702

Less interest
(24,543
)
 
(445,653
)
 
(86,422
)
 
(359,279
)
Present value of minimum lease payments (a) (b)
$
31,670

 
$
460,182

 
$
195,089

 
$
746,423

_______________

(a)
The present value of minimum finance lease payments of $11,005 and $480,847 are included in “Current portion of finance lease liabilities” and “Long-term finance lease liabilities,” respectively.

(b)
The present value of minimum operating lease payments of $43,775 and $897,737 are included in “Current portion of operating lease liabilities” and “Long-term operating lease liabilities,” respectively.

The following table illustrates the Company’s future minimum rental payments for non-cancelable leases as of December 30, 2018:
 
Finance
Leases
 
Operating
Leases
Fiscal Year
Company-Operated
 
Franchise
and Other
 
Company-Operated
 
Franchise
and Other
2019
$
1,962

 
$
45,125

 
$
20,174

 
$
75,703

2020
1,978

 
43,969

 
20,052

 
73,320

2021
2,082

 
45,522

 
19,820

 
73,167

2022
2,114

 
46,573

 
19,530

 
73,300

2023
2,084

 
48,109

 
19,430

 
73,377

Thereafter
23,558

 
676,139

 
203,073

 
854,964

Total minimum payments
$
33,778

 
$
905,437

 
$
302,079

 
$
1,223,831

Less interest
(16,874
)
 
(466,705
)
 
 
 
 
Present value of minimum lease payments (a)
$
16,904

 
$
438,732

 
 
 
 
_______________

(a)
The present value of minimum finance lease payments of $8,405 and $447,231 are included in “Current portion of finance lease liabilities” and “Long-term finance lease liabilities,” respectively.
Leases, Company as Lessor
Company as Lessor

The components of lease income for 2019 are as follows:
 
Year Ended
 
2019
Sales-type and direct-financing leases:
 
Selling profit
$
2,285

Interest income (a)
26,333

 
 
Operating lease income
176,629

Variable lease income
56,436

Franchise rental income (b)
$
233,065

_______________

(a)
Included in “Interest expense, net.”

(b)
Includes sublease income of $171,126 recognized during 2019, of which $37,739 represents lessees’ variable payments to the Company for executory costs.

The components of rental income for operating leases and subleases for 2018 and 2017, as accounted for under previous guidance, were as follows:
 
Year Ended
 
2018
 
2017
Rental income:
 
 
 
Minimum rentals
$
184,154

 
$
169,857

Contingent rentals
19,143

 
20,246

Total rental income (a)
$
203,297

 
$
190,103

_______________

(a)
Amounts include sublease income of $138,363 and $126,814 recognized during 2018 and 2017, respectively.

During 2018 and 2017, the Company recognized $27,638 and $22,869 in interest income related to our direct financing leases, respectively, which is included in “Interest expense, net.”

The following table illustrates the Company’s future minimum rental receipts for non-cancelable leases and subleases as of December 29, 2019:
 
Sales-Type and
Direct Financing Leases
 
Operating
Leases
Fiscal Year
Subleases
 
Owned Properties
 
Subleases
 
Owned Properties
2020
$
28,948

 
$
2,036

 
$
110,212

 
$
52,927

2021
30,066

 
2,068

 
111,232

 
54,716

2022
30,741

 
2,148

 
112,198

 
56,189

2023
31,780

 
2,192

 
113,064

 
56,394

2024
32,081

 
2,200

 
113,123

 
57,497

Thereafter
461,553

 
24,915

 
1,223,729

 
804,606

Total future minimum receipts
615,169

 
35,559

 
$
1,783,558

 
$
1,082,329

Unearned interest income
(371,918
)
 
(19,058
)
 
 
 
 
Net investment in sales-type and direct financing leases (a)
$
243,251

 
$
16,501

 
 
 
 
_______________

(a)
The present value of minimum direct financing rental receipts of $3,146 and $256,606 are included in “Accounts and notes receivable, net” and “Net investment in sales-type and direct financing leases,” respectively. The present value of minimum direct financing rental receipts includes a net investment in unguaranteed residual assets of $197.

The following table illustrates the Company’s future minimum rental receipts for non-cancelable leases and subleases as of December 30, 2018:
 
Sales-Type and
Direct Financing Leases
 
Operating
Leases
Fiscal Year
Subleases
 
Owned Properties
 
Subleases
 
Owned Properties
2019
$
26,239

 
$
1,937

 
$
113,180

 
$
52,527

2020
26,859

 
2,006

 
113,578

 
53,066

2021
27,904

 
2,043

 
114,447

 
54,615

2022
28,563

 
2,119

 
115,552

 
56,092

2023
29,512

 
2,159

 
116,463

 
56,284

Thereafter
448,851

 
26,404

 
1,372,646

 
858,755

Total future minimum receipts
587,928

 
36,668

 
$
1,945,866

 
$
1,131,339

Unearned interest income
(377,046
)
 
(20,338
)
 
 
 
 
Net investment in sales-type and direct financing leases (a)
$
210,882

 
$
16,330

 
 
 
 
_______________

(a)
The present value of minimum direct financing rental receipts of $735 and $226,477 are included in “Accounts and notes receivable, net” and “Net investment in sales-type and direct financing leases,” respectively.

Properties owned by the Company and leased to franchisees and other third parties under operating leases include:
 
 
Year End
 
 
December 29, 2019
 
December 30, 2018
Land
 
$
281,792

 
$
272,234

Buildings and improvements
 
311,047

 
312,672

Restaurant equipment
 
1,727

 
2,443

 
 
594,566

 
587,349

Accumulated depreciation and amortization
 
(157,130
)
 
(143,313
)
 
 
$
437,436

 
$
444,036
v3.19.3.a.u2
Guarantees and Other Commitments and Contingencies
 12 Months Ended
Dec. 29, 2019
Commitments and Contingencies Disclosure [Abstract]  
Guarantees and Other Commitments and Contingencies Guarantees and Other Commitments and Contingencies

Guarantees and Contingent Liabilities

Franchisee Image Activation Incentive Programs

In order to promote new restaurant development, Wendy’s has an incentive program for franchisees that provides for reductions in royalty and national advertising payments for up to the first two years of operation for qualifying new restaurants opened by December 31, 2020, with the value of the incentives declining in the later years of the program. In addition, during 2018, Wendy’s announced a restaurant development incentive program that provides for incremental reductions in royalty and national advertising payments for up to the first two years of operation for qualifying new restaurants for existing franchisees that sign up for the program and commit to incremental development of new Wendy’s restaurants under a new development agreement. Wendy’s also provides franchisees with the option of an early 20-year renewal of their franchise agreement upon completion of reimaging utilizing certain approved Image Activation remodel designs.

Wendy’s also had incentive programs for 2017 available to franchisees that commenced Image Activation restaurant remodels by December 15, 2017. The remodel incentive programs provided for reductions in royalty payments for one year after the completion of construction.

Other Loan Guarantees

Wendy’s provides loan guarantees to various lenders on behalf of franchisees entering into debt arrangements for equipment financing. Wendy’s has accrued a liability for the fair value of these guarantees, the calculation of which was based upon a weighted average risk percentage established at the inception of each program which has been adjusted for a history of defaults. Wendy’s potential recourse for the aggregate amount of these loans amounted to $6 as of December 29, 2019. As of December 29, 2019, the fair value of these guarantees totaled $1 and is included in “Other liabilities.”

Lease Guarantees

Wendy’s has guaranteed the performance of certain leases and other obligations, primarily from former Company-operated restaurant locations now operated by franchisees, amounting to $75,626 as of December 29, 2019. These leases extend through 2056. We have not received any notice of default related to these leases as of December 29, 2019. In the event of default by a franchise owner, Wendy’s generally retains the right to acquire possession of the related restaurant locations.

Insurance

Wendy’s is self-insured for most workers’ compensation losses and purchases insurance for general liability and automotive liability losses, all subject to a $500 per occurrence retention or deductible limit. Wendy’s determines its liability for claims incurred but not reported for the insurance liabilities on an actuarial basis. As of December 29, 2019, the Company had $20,588 recorded for these insurance liabilities. Wendy’s is self-insured for health care claims for eligible participating employees subject to certain deductibles and limitations and determines its liability for health care claims incurred but not reported based on historical claims runoff data. As of December 29, 2019, the Company had $2,349 recorded for these health care insurance liabilities.

Letters of Credit

As of December 29, 2019, the Company had outstanding letters of credit with various parties totaling $25,106. The outstanding letters of credit include amounts outstanding against the Class A-1 Notes. See Note 12 for further information. We do not expect any material loss to result from these letters of credit.

Purchase and Capital Commitments

Beverage Agreement

The Company has an agreement with a beverage vendor, which provides fountain beverage products and certain marketing support funding to the Company and its franchisees. This agreement requires minimum purchases of certain fountain beverages (“Fountain Beverages”) by the Company and its franchisees at agreed upon prices until the total contractual gallon volume usage is reached. This agreement also provides for an annual advance to be paid to the Company based on the vendor’s expectation of the Company’s annual Fountain Beverages usage, which is amortized over actual usage during the year. In January 2019, the Company amended its contract with the beverage vendor, which now expires at the later of reaching a minimum usage requirement or December 31, 2025. Beverage purchases made by the Company under this agreement during 2019, 2018 and 2017 were $11,440, $10,108 and $9,370, respectively. The Company estimates future annual purchases to be approximately $11,000 in 2020, $11,300 in 2021, $11,800 in 2022, $12,300 in 2023 and $12,800 in 2024 based on current pricing and the expected ratio of usage at Company-operated restaurants to franchised restaurants. As of December 29, 2019, $2,542 is due to the beverage vendor and is included in “Accounts payable,” principally for annual estimated payments that exceeded usage under this agreement.

IT Services Agreement

In December 2019, the Company entered into an agreement to partner with a third-party global IT consultant on the Company’s new IT organization structure to leverage the consultant’s global capabilities, which the Company believes will enable a more seamless integration between its digital and corporate IT assets. Costs incurred by the Company under this agreement were $1,386 during 2019. The Company’s unconditional purchase obligations under the agreement are approximately $16,800 in 2020, $17,200 in 2021, $15,400 in 2022, $13,000 in 2023 and $12,200 in 2024. As of December 29, 2019, $1,046 is due to the consultant and is included in “Accrued expenses and other current liabilities.”

Marketing Agreement

The Company has an agreement with two national broadcasters that grants the Company certain marketing and media rights. Costs incurred by the Company under this agreement were approximately $11,000 in each of 2019 and 2018, which are included in “Advertising funds expense.” The Company’s unconditional purchase obligations under the agreement are approximately $15,500 in 2020, $12,400 in 2021, $12,900 in 2022, $13,400 in 2023 and $12,700 in 2024.
v3.19.3.a.u2
Transactions with Related Parties
 12 Months Ended
Dec. 29, 2019
Related Party Transactions [Abstract]  
Transactions with Related Parties Transactions with Related Parties

The following is a summary of transactions between the Company and its related parties:
 
Year Ended
 
2019
 
2018
 
2017
Transactions with QSCC:
 
 
 
 
 
Wendy’s Co-Op (a)
$
(504
)
 
$
(470
)
 
$
(987
)
Lease income (b)
(217
)
 
(215
)
 
(217
)
TimWen lease and management fee payments (c)
$
16,660

 
$
13,044

 
$
12,360

_______________

Transactions with QSCC

(a)
Wendy’s has a purchasing co-op relationship agreement (the “Wendy’s Co-op”) with its franchisees which establishes Quality Supply Chain Co-op, Inc. (“QSCC”). QSCC manages, for the Wendy’s system in the U.S. and Canada, contracts for the purchase and distribution of food, proprietary paper, operating supplies and equipment under national agreements with pricing based upon total system volume. 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. and Canada.

Wendy’s and its franchisees pay sourcing fees to third-party vendors on certain products sourced by QSCC. Such sourcing fees are remitted by these vendors to QSCC and are the primary means of funding QSCC’s operations. 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 $504, $470 and $987 in 2019, 2018 and 2017, respectively, which are included as a reduction of “Cost of sales.”

(b)
Pursuant to a lease agreement entered into on January 1, 2017, Wendy’s leased 14,333 square feet of office space to QSCC for an annual base rental of $215. The lease expires on December 31, 2020. In November 2018, the lease agreement was amended to increase the leased square footage to 14,493 and to increase the annual base rental to $217. The Company received $217, $215 and $217 of lease income from QSCC during 2019, 2018 and 2017, respectively, which has been recorded to “Franchise rental income.”

TimWen lease and management fee payments

(c)
A wholly-owned subsidiary of Wendy’s leases restaurant facilities from TimWen, which are then subleased to franchisees for the operation of Wendy’s/Tim Hortons combo units in Canada. Wendy’s paid TimWen $16,867, $13,256 and $12,572 under these lease agreements during 2019, 2018 and 2017, respectively. In addition, TimWen paid Wendy’s a management fee under the TimWen joint venture agreement of $207, $212 and $212 during 2019, 2018 and 2017, respectively, which has been included as a reduction to “General and administrative.”
v3.19.3.a.u2
Legal and Environmental Matters
 12 Months Ended
Dec. 29, 2019
Loss Contingency [Abstract]  
Legal and Environmental Matters Legal and Environmental Matters

The Company is involved in litigation and claims incidental to our current and prior businesses. We provide accruals for such litigation and claims when payment is probable and reasonably estimable. We believe we have adequate accruals for continuing operations for all of our legal and environmental matters, including the accrual that we recorded for the legal proceedings related to a cybersecurity incident as described below. See Note 11 for further information on the accrual. We cannot estimate the aggregate possible range of loss for our existing litigation and claims for 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/or significant factual matters unresolved. In addition, most cases seek an indeterminate amount of damages and many involve multiple parties. Predicting the outcomes of settlement discussions or judicial or arbitral decisions is thus inherently difficult and future developments could cause these actions or claims, individually or in aggregate, to have a material adverse effect on the Company’s financial condition, results of operations, or cash flows of a particular reporting period.

The Company was named as a defendant in putative class action lawsuits alleging, among other things, that the Company failed to safeguard customer credit card information and failed to provide notice that credit card information had been compromised in connection with the cybersecurity incidents described herein.  Jonathan Torres and other consumers filed an action in the U.S. District Court for the Middle District of Florida (the “Torres Case”). On August 23, 2018, the court preliminarily approved a class-wide settlement of the Torres Case. On February 26, 2019, the court granted final approval of the settlement agreement. At this time, the Torres Case has been dismissed with prejudice (with no appeal taken), all claims and other amounts payable per the terms of the settlement agreement have been paid, and the matter is considered closed.

Certain financial institutions also filed class actions lawsuits in the U.S. District Court for the Western District of Pennsylvania, which seek to certify a nationwide class of financial institutions that issued payment cards that were allegedly impacted in connection with the cybersecurity incidents described herein.  Those cases were consolidated into a single case (the “FI Case”). On February 26, 2019, the court preliminarily approved a class-wide settlement of the FI Case. On November 6, 2019, the court granted final approval of the settlement agreement. Under the terms of the settlement agreement, a settlement class of financial institutions received $50,000, inclusive of attorneys’ fees and costs. After exhaustion of applicable insurance, the Company paid approximately $24,650 of this amount in January 2020. In exchange, the Company and its franchisees received a full release of all claims that have or could have been brought by financial institutions who did not opt out of the settlement. During 2018, the Company recorded a liability of $50,000 and insurance receivables of $22,500 for the FI Case. During 2019, as a result of cost savings related to the settlement of the Torres Case, the Company adjusted its insurance receivables for the FI Case to approximately $25,000. See Note 11 for further information.

Certain of the Company’s present and former directors have been named in two putative shareholder derivative complaints arising out of the cybersecurity incidents described herein.  The first case, brought by James Graham in the U.S. District Court for the Southern District of Ohio (the “Graham Case”), asserts claims of breach of fiduciary duty, waste of corporate assets, unjust enrichment and gross mismanagement, and additionally names one non-director executive officer of the Company.  The second case, brought by Thomas Caracci in the U.S. District Court for the Southern District of Ohio (the “Caracci Case”), asserts claims of breach of fiduciary duty and violations of Section 14(a) and Rule 14a-9 of the Securities Exchange Act of 1934.  Collectively, the plaintiffs seek a judgment on behalf of the Company for all damages incurred or that will be incurred as a result of the alleged wrongful acts or omissions, a judgment ordering disgorgement of all profits, benefits, and other compensation obtained by the named individual defendants, a judgment directing the Company to reform its governance and internal procedures, attorneys’ fees and other costs.  The Graham Case and the Caracci Case have been consolidated and on December 21, 2018, the court issued an order naming Graham and his counsel as lead in the case. On January 31, 2019, Graham filed a consolidated verified shareholder derivative complaint with the court. On January 24, 2020, the court granted preliminary approval of the settlement filed in this case. The settlement is subject to the notice and objection provisions set forth therein, and to final approval by the court. If approved, the settlement will resolve and dismiss the claims asserted in these actions.
v3.19.3.a.u2
Advertising Costs and Funds
 12 Months Ended
Dec. 29, 2019
Marketing and Advertising Expense [Abstract]  
Advertising Costs and Funds Advertising Costs and Funds

We maintain U.S. and Canadian national advertising funds established to collect and administer funds contributed for use in advertising and promotional programs. Contributions to the Advertising Funds are required from both Company-operated and franchised restaurants and are based on a percentage of restaurant sales. In addition to the contributions to the Advertising Funds, Company-operated and franchised restaurants make additional contributions to other local and regional advertising programs.

Restricted assets and related liabilities of the Advertising Funds at December 29, 2019 and December 30, 2018 are as follows:
 
Year End
 
December 29, 2019
 
December 30, 2018
Cash and cash equivalents
$
23,973

 
$
25,247

Accounts receivable, net
54,394

 
47,332

Other assets
4,009

 
3,930

Advertising funds restricted assets
$
82,376

 
$
76,509

 
 
 
 
Accounts payable
$
66,749

 
$
62,033

Accrued expenses and other current liabilities
17,446

 
18,120

Advertising funds restricted liabilities
$
84,195

 
$
80,153



Advertising expenses included in “Cost of sales” totaled $29,954, $27,939 and $27,921 in 2019, 2018 and 2017, respectively.
v3.19.3.a.u2
Geographic Information
 12 Months Ended
Dec. 29, 2019
Segments, Geographical Areas [Abstract]  
Geographic Information Geographic Information

The table below presents revenues and properties information by geographic area:
 
U.S.
 
Canada
 
Other International
 
Total
2019
 
 
 
 
 
 
 
Revenues
$
1,606,619

 
$
80,903

 
$
21,480

 
$
1,709,002

Properties
941,607

 
35,283

 
110

 
977,000

 
 
 
 
 
 
 
 
2018
 
 
 
 
 
 
 
Revenues
$
1,495,639

 
$
74,626

 
$
19,671

 
$
1,589,936

Properties
990,992

 
32,155

 
120

 
1,023,267

 
 
 
 
 
 
 
 
2017
 
 
 
 
 
 
 
Revenues
$
1,154,873

 
$
50,431

 
$
18,104

 
$
1,223,408

Properties
1,032,151

 
30,586

 
132

 
1,062,869
v3.19.3.a.u2
Segment Information (Notes)
 12 Months Ended
Dec. 29, 2019
Segment Reporting [Abstract]  
Segment Information Segment Information

As a result of the realignment of our management and operating structure during 2019 as discussed in Note 5, the Company adopted a new segment reporting structure beginning in the fourth quarter of 2019. As part of this new structure, the Company made the following changes: (1) it combined its Canadian business with its International segment and (2) it separated its real estate and development operations into its own segment. These changes were designed to increase efficiencies and to accelerate long-term growth. Prior period segment results have been revised to reflect these changes.

The Company is now comprised of the following segments: (1) Wendy’s U.S., (2) Wendy’s International and (3) Global Real Estate & Development. Wendy’s U.S. includes the operation and franchising of Wendy’s restaurants in the U.S. and derives its revenues from sales at Company-operated restaurants and royalties, fees and advertising fund collections from franchised restaurants. Wendy’s International includes the franchising of Wendy’s restaurants in countries and territories other than the U.S. and derives its revenues from royalties, fees and advertising fund collections from franchised restaurants. Global Real Estate & Development includes real estate activity for owned sites and sites leased from third parties, which are leased and/or subleased to franchisees, and also includes our share of the income of our TimWen real estate joint venture. In addition, Global Real Estate & Development earns fees from facilitating Franchise Flips and providing other development-related services to franchisees. The Company measures segment profit based on segment adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”). Segment adjusted EBITDA 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. When the Company’s chief operating decision maker reviews 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.

Revenues by segment were as follows:
 
Year Ended
 
2019
 
2018
 
2017
Wendy’s U.S.
$
1,404,307

 
$
1,312,491

 
$
986,738

Wendy’s International
68,198

 
67,630

 
43,696

Global Real Estate & Development
236,497

 
209,815

 
192,974

Total revenues
$
1,709,002

 
$
1,589,936

 
$
1,223,408



The following table reconciles profit by segment to the Company’s consolidated income before income taxes:
 
Year Ended
 
2019
 
2018
 
2017
Wendy’s U.S.
$
369,193

 
$
355,455

 
$
369,432

Wendy’s International
20,246

 
25,597

 
23,833

Global Real Estate & Development
107,116

 
110,632

 
94,782

Total segment profit
$
496,555

 
$
491,684

 
$
488,047

Advertising funds surplus
1,337

 
4,153

 
—

Unallocated general and administrative (a)
(81,230
)
 
(104,208
)
 
(82,188
)
Depreciation and amortization
(131,693
)
 
(128,879
)
 
(125,687
)
System optimization gains (losses), net
1,283

 
463

 
(39,076
)
Reorganization and realignment costs
(16,965
)
 
(9,068
)
 
(22,574
)
Impairment of long-lived assets
(6,999
)
 
(4,697
)
 
(4,097
)
Unallocated other operating income, net
291

 
444

 
333

Interest expense, net
(115,971
)
 
(119,618
)
 
(118,059
)
Loss on early extinguishment of debt
(8,496
)
 
(11,475
)
 
—

Investment income, net
25,598

 
450,736

 
2,703

Other income, net
7,771

 
5,381

 
1,617

Income before income taxes
$
171,481

 
$
574,916

 
$
101,019

_______________

(a)
Includes corporate overhead costs, such as employee compensation and related benefits. 2018 also includes the impact of legal reserves for a settlement of the FI Case of $27,500.

Net income (loss) of our equity method investments for the Brazil JV and TimWen are included in segment profit for the Wendy’s International and Global Real Estate & Development segments, respectively. Net income (loss) of equity method investments by segment was as follows:
 
Year Ended
 
2019
 
2018
 
2017
Wendy’s International
$
(1,022
)
 
$
(1,344
)
 
$
(1,134
)
Global Real Estate & Development
9,695

 
9,420

 
8,707

Total net income of equity method investments
$
8,673

 
$
8,076

 
$
7,573
v3.19.3.a.u2
Quarterly Financial Information (Unaudited)
 12 Months Ended
Dec. 29, 2019
Quarterly Financial Information Disclosure [Abstract]  
Quarterly Financial Information (Unaudited) Quarterly Financial Information (Unaudited)

The tables below set forth summary unaudited consolidated quarterly financial information for 2019 and 2018. The Company reports on a fiscal year typically consisting of 52 or 53 weeks ending on the Sunday closest to December 31. All of the Company’s fiscal quarters in 2019 and 2018 contained 13 weeks.
 
2019 Quarter Ended (a)
 
March 31
 
June 30
 
September 29
 
December 29
Revenues
$
408,583

 
$
435,348

 
$
437,880

 
$
427,191

Cost of sales
142,579

 
151,092

 
152,425

 
151,434

Operating profit
66,266

 
80,573

 
79,023

 
36,717

Net income
$
31,894

 
$
32,386

 
$
46,127

 
$
26,533

Basic income per share
$
.14

 
$
.14

 
$
.20

 
$
.12

Diluted income per share
$
.14

 
$
.14

 
$
.20

 
$
.11


 
2018 Quarter Ended (b)
 
April 1
 
July 1
 
September 30
 
December 30
Revenues
$
380,564

 
$
411,002

 
$
400,550

 
$
397,820

Cost of sales
132,219

 
138,154

 
139,348

 
138,867

Operating profit
55,262

 
71,483

 
77,348

 
45,799

Net income
$
20,159

 
$
29,876

 
$
391,249

 
$
18,831

Basic income per share
$
.08

 
$
.13

 
$
1.65

 
$
.08

Diluted income per share
$
.08

 
$
.12

 
$
1.60

 
$
.08

_______________

(a)
The Company’s consolidated statements of operations in fiscal 2019 were significantly impacted by investment income, net, franchise support and other costs, reorganization and realignment costs and loss on early extinguishment of debt. The pre-tax impact of investment income, net for the fourth quarter was $24,599 (see Note 8 for further information). The pre-tax impact of franchise support and other costs for the fourth quarter included approximately $16,400 to support U.S. franchisees in preparation for the launch of breakfast across the U.S. system on March 2, 2020. The pre-tax impact of reorganization and realignment costs for the fourth quarter was $12,194 (see Note 5 for further information). The pre-tax impact of loss on early extinguishment of debt for the second and fourth quarters was $7,150 and $1,346, respectively (see Note 12 for further information).
   
(b)
The Company’s consolidated statements of operations in fiscal 2018 were significantly impacted by investment income, net, reorganization and realignment costs, loss on early extinguishment of debt and legal reserves for the FI Case. The pre-tax impact of investment income, net for the third quarter was $450,133 and included the sale of our remaining ownership interest in Inspire Brands (see Note 8 for further information). The pre-tax impact of reorganization and realignment costs for the first, second, third and fourth quarters was $2,626, $3,124, $941 and $2,377, respectively (see Note 5 for further information). The pre-tax impact of loss on early extinguishment of debt for the first quarter was $11,475 (see Note 12 for further information). The pre-tax impact of legal reserves for the FI Case for the fourth quarter was $27,500 (see Note 23 for further information).
v3.19.3.a.u2
Summary of Significant Accounting Policies (Policies)
 12 Months Ended
Dec. 29, 2019
Accounting Policies [Abstract]  
Principles of Consolidation, Policy
Principles of Consolidation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include all of the Company’s subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
Use of Estimates, Policy
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ materially from those estimates.
Fiscal Year, Policy
Fiscal Year

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, 2019” or “2019,” (2) “the year ended December 30, 2018” or “2018” and (3) “the year ended December 31, 2017” or “2017,” all of which consisted of 52 weeks.
Reclassifications, Policy
Reclassifications

Certain balance sheet reclassifications have been made to the prior year presentation to conform to the current year presentation. See “New Accounting Standards Adopted” below for further information.
Cash and Cash Equivalents, Policy

Cash and Cash Equivalents

All highly liquid investments with a maturity of three months or less when acquired are considered cash equivalents. The Company’s cash and cash equivalents principally consist of cash in bank and money market mutual fund accounts and are primarily not in Federal Deposit Insurance Corporation insured accounts.

We believe that our vulnerability to risk concentrations in our cash equivalents is mitigated by (1) our policies restricting the eligibility, credit quality and concentration limits for our placements in cash equivalents and (2) insurance from the Securities Investor Protection Corporation of up to $500 per account, as well as supplemental private insurance coverage maintained by substantially all of our brokerage firms, to the extent our cash equivalents are held in brokerage accounts.
Restricted Cash, Policy
Restricted Cash

In accordance with the Company’s securitized financing facility, certain cash accounts have been established with the trustee for the benefit of the trustee and the noteholders and are restricted in their use. 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 Company’s national advertising funds for the U.S. and Canada (the “Advertising Funds”), usage of which is restricted for advertising activities. Refer to Note 7 for further information.
Accounts and Notes Receivable, Net, Policy
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. The need for an allowance for doubtful accounts is reviewed on a specific identification basis based upon past due balances and the financial strength of the obligor.
Inventories, Policy
Inventories

The Company’s inventories are stated at the lower of cost or net realizable value, with cost determined in accordance with the first-in, first-out method and consist primarily of restaurant food items and paper supplies.
Properties and Depreciation and Amortization, Policy
Properties and Depreciation and Amortization

Properties are stated at cost, including capitalized internal costs of employees to the extent such employees are dedicated to specific restaurant construction projects, less accumulated depreciation and amortization. Depreciation and amortization of properties is computed principally on the straight-line basis using the following estimated useful lives of the related major classes of properties: 3 to 20 years for office and restaurant equipment (including technology), 3 to 15 years for transportation equipment and 7 to 30 years for buildings and improvements. When the Company commits to a plan to cease using certain properties before the end of their estimated useful lives, depreciation expense is accelerated to reflect the use of the assets over their shortened useful lives. Leasehold improvements are amortized over the shorter of their estimated useful lives or the terms of the respective leases, including periods covered by renewal options that the Company is reasonably assured of exercising.

The Company reviews properties for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. If such review indicates an asset group may not be recoverable, an impairment loss is recognized for the excess of the carrying amount over the fair value of an asset group to be held and used or over the fair value less cost to sell of an asset to be disposed. See “Impairment of Long-Lived Assets” below for further information.

The Company classifies assets as held for sale and ceases depreciation of the assets when there is a plan for disposal of the assets and those assets meet the held for sale criteria. Assets held for sale are included in “Prepaid expenses and other current assets” in the consolidated balance sheets.
Goodwill, Policy
Goodwill

Goodwill, representing the excess of the cost of an acquired entity over the fair value of the acquired net assets, is not amortized. Goodwill associated with our Company-operated restaurants is reduced as a result of restaurant dispositions based on the relative fair values and is included in the carrying value of the restaurant in determining the gain or loss on disposal. If a Company-operated restaurant is sold within two years of being acquired from a franchisee, the goodwill associated with the acquisition is written off in its entirety. Goodwill has been assigned to reporting units for purposes of impairment testing.  The Company tests goodwill for impairment annually during the fourth quarter, or more frequently if events or changes in circumstances indicate that the asset may be impaired. Our annual impairment test of goodwill may be completed through a qualitative assessment to determine if the fair value of the reporting unit is more likely than not greater than the carrying amount.  If we elect to bypass the qualitative assessment for any reporting units, or if a qualitative assessment indicates it is more likely than not that the estimated carrying value of a reporting unit exceeds its fair value, we perform a two-step quantitative goodwill impairment test. Under the first step, the fair value of the reporting unit is compared with its carrying value (including goodwill).  If the fair value of the reporting unit is less than its carrying value, an indication of goodwill impairment exists for the reporting unit and we must perform step two of the impairment test (measurement).  Step two of the impairment test, if necessary, requires the estimation of the fair value for the assets and liabilities of a reporting unit in order to calculate the implied fair value of the reporting unit’s goodwill.  If the carrying amount of a reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess.

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. Should actual cash flows and our future estimates vary adversely from those estimates we use, we may be required to recognize goodwill impairment charges in future years.
Impairment of Long-Lived Assets, Policy
Impairment of Long-Lived Assets

Our long-lived assets include (1) properties and related definite-lived intangible assets (e.g., favorable leases) that are leased and/or subleased to franchisees, (2) Company-operated restaurant assets and related definite-lived intangible assets, which include reacquired rights under franchise agreements, and (3) finance and operating lease assets.

We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We assess the recoverability of our long-lived assets by comparing the carrying amount of the asset group to future undiscounted net cash flows expected to be generated through leases and/or subleases or by our individual Company-operated restaurants. 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 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. Should actual cash flows and our future estimates vary adversely from those estimates we used, we may be required to recognize additional impairment charges in future years.
Other Intangible Assets, Policy
Other Intangible Assets

Definite-lived intangible assets are amortized on a straight-line basis using the following estimated useful lives of the related classes of intangibles: for favorable leases, the terms of the respective leases, including periods covered by renewal options that the Company as lessee is reasonably assured of exercising; 1 to 5 years for computer software; 4 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 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. Indefinite-lived intangible assets are tested for impairment at least annually, or more frequently if events or changes in circumstances indicate that the assets may be impaired. Our annual impairment test for indefinite-lived intangible assets may be completed through a qualitative assessment to determine if the fair value of the indefinite-lived intangible assets is more likely than not greater than the carrying amount. 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. If the Company determines that impairment of its intangible assets may exist, the amount of impairment loss is measured as the excess of carrying value over fair value. Our estimates in the determination of the fair value of indefinite-lived intangible assets include the anticipated future revenues of Company-operated and franchised restaurants and the resulting cash flows.
Investments, Policy
Investments

The Company has a 50% share in a partnership in a Canadian restaurant real estate joint venture (“TimWen”) with a subsidiary of Restaurant Brands International Inc., a quick-service restaurant company that owns the Tim Hortons® brand (Tim Hortons is a registered trademark of Tim Hortons USA Inc.). In addition, the Company has a 20% share in a joint venture in Brazil (the “Brazil JV”). 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.” Other investments in equity securities, including investments in limited partnerships, in which the Company does not have significant influence, and for which there is not a readily determinable fair value, are recorded at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer. Realized gains and losses are reported as income or loss in the period in which the securities are sold or otherwise disposed. 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, 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. Accordingly, the carrying value difference is amortized over the estimated lives of the assets of the investee to which such difference would have been allocated if the equity investment were a consolidated subsidiary. To the extent the carrying value difference represents goodwill, it is not amortized.
Share-based Compensation, Policy
Share-Based Compensation

The Company has granted share-based compensation awards to certain employees under several equity plans (the “Equity Plans”). The Company measures the cost of employee services received in exchange for an equity award, which include grants of employee stock options and restricted shares, based on the fair value of the award at the date of grant. Share-based compensation expense is recognized net of estimated forfeitures, determined based on historical experience. 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. 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 average of the high and low trading prices of our common stock on the date of grant, unless the awards are subject to market conditions, in which case we use a Monte Carlo simulation model. The Monte Carlo simulation model utilizes multiple input variables to estimate the probability that market conditions will be achieved.
Foreign Currency Translation, Policy
Foreign Currency Translation

The Company’s primary foreign operations are in Canada where the functional currency is the Canadian dollar. Financial statements of foreign subsidiaries are prepared in their functional currency and then translated into U.S. dollars. Assets and liabilities are translated at the exchange rate as of the balance sheet date and revenues, costs and expenses are translated at a monthly average exchange rate. 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.”
Income Taxes, Policy
Income Taxes

The Company accounts for income taxes under the asset and liability method. A deferred tax asset or liability is recognized whenever there are (1) future tax effects from temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and (2) operating loss, capital loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to the years in which those differences are expected to be recovered or settled.

Deferred tax assets are recognized to the extent the Company believes these assets will more likely than not be realized. In evaluating the realizability of deferred tax assets, the Company considers all available positive and negative evidence, including the interaction and the timing of future reversals of existing temporary differences, projected future taxable income, recent operating results and tax-planning strategies. When considered necessary, a valuation allowance is recorded to reduce the carrying amount of the deferred tax assets to their anticipated realizable value.

The Company records uncertain tax positions on the basis of a two-step process whereby we first determine if it is more likely than not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. A tax position that meets the more-likely-than-not recognition threshold is then measured for purposes of financial statement recognition as the largest amount of benefit that is greater than 50% likely of being realized upon being effectively settled.

Interest accrued for uncertain tax positions is charged to “Interest expense, net.” Penalties accrued for uncertain tax positions are charged to “General and administrative.”
Restaurant Acquisitions, Policy
Restaurant Acquisitions and Dispositions

The Company accounts for the acquisition of restaurants from franchisees using the acquisition method of accounting for business combinations. The acquisition method of accounting involves the allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed. This allocation process requires the use of estimates and assumptions to derive fair values and to complete the allocation. The excess of the purchase price over the fair values of the assets acquired and liabilities assumed represents goodwill derived from the acquisition. See “Goodwill” above for further information.
Restaurant Dispositions, Policy
In connection with the sale of Company-operated restaurants to franchisees, the Company typically enters into several agreements, in addition to an asset purchase agreement, with franchisees including franchise, development, relationship and lease agreements. The Company typically sells restaurants’ cash, inventory and equipment and retains ownership or the leasehold interest to the real estate to lease and/or sublease to the franchisee. The Company has determined that its restaurant dispositions usually represent multiple-element arrangements, and as such, the cash consideration received is allocated to the separate elements based on their relative selling price. Cash consideration generally includes up-front consideration for the sale of the restaurants, technical assistance fees and development fees and future cash consideration for royalties and lease payments. The Company considers the future lease payments in allocating the initial cash consideration received. The Company obtains third-party evidence to estimate the relative selling price of the stated rent under the lease and/or sublease agreements which is primarily based upon comparable market rents. Based on the Company’s review of the third-party evidence, the Company records favorable or unfavorable lease assets/liabilities with a corresponding offset to the gain or loss on the sale of the restaurants. The cash consideration per restaurant for technical assistance fees and development fees is consistent with the amounts stated in the related franchise agreements which are charged for separate standalone arrangements. The Company recognizes the technical assistance and development fees over the contractual term of the franchise agreements. Future royalty income is also recognized in revenue as earned. See “Revenue Recognition” below for further information.
Revenue Recognition, Policy
Revenue Recognition

“Sales” includes revenues recognized upon delivery of food to the customer at Company-operated restaurants. “Sales” excludes taxes collected from the Company’s customers. Revenue is recognized when the food is purchased by the customer, which is when our performance obligation is satisfied. “Sales” also includes income for gift cards. Gift card payments are recorded as deferred income when received and are recognized as revenue in proportion to actual gift card redemptions.
“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 and development fees. Royalties from franchised restaurants are based on a percentage of sales of the franchised restaurant and are recognized as earned. New build technical assistance fees, renewal fees and Franchise Flip technical assistance fees are recorded as deferred revenue when received and recognized as revenue over the contractual term of the franchise agreements, once the restaurant has opened. Development fees are deferred when received, allocated to each agreed upon restaurant, and recognized as revenue over the contractual term of each respective franchise agreement, once the restaurant has opened. These franchise fees are considered highly dependent upon and interrelated with the franchise right granted in the franchise agreement. Franchise Flip advisory fees include valuation services and fees for selecting pre-approved buyers for Franchise Flips. Franchise Flip advisory fees are paid by the seller and are recognized as revenue at closing of the Franchise Flip transaction.
“Advertising funds revenue” includes contributions to the Advertising Funds by franchisees. Revenue related to these contributions is based on a percentage of sales of the franchised restaurants and is recognized as earned.
“Franchise rental income” includes rental income from properties owned and leased by the Company and leased or subleased to franchisees. Rental income is recognized on a straight-line basis over the respective operating lease terms. Favorable and unfavorable lease amounts related to the leased and/or subleased properties are amortized to rental income on a straight-line basis over the remaining term of the leases.

See “New Accounting Standards Adopted” below for a description of changes to our revenue recognition policies resulting from the adoption of the new accounting guidance for revenue recognition effective January 1, 2018.
Cost of Sales, Policy
Cost of Sales

Cost of sales includes food and paper, restaurant labor and occupancy, advertising and other operating costs relating to Company-operated restaurants. Cost of sales excludes depreciation and amortization expense.
Vendor Incentives, Policy

Vendor Incentives

The Company receives incentives from certain vendors. These incentives are recognized as earned and are classified as a reduction of “Cost of sales.”
Advertising Costs, Policy
Advertising Costs

Advertising costs are expensed as incurred and are included in “Cost of sales” and “Advertising funds expense.” Production costs of advertising are expensed when the advertisement is first released.
Franchise Support and Other Costs, Policy
Franchise Support and Other Costs

The Company incurs costs to provide direct support services to our franchisees, as well as certain other direct and incremental costs to the Company’s franchise operations. 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.
Self-insurance, Policy
Self-Insurance

The Company is self-insured for most workers’ compensation losses and health care claims and purchases insurance for general liability and automotive liability losses, all subject to a $500 per occurrence retention or deductible limit. 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.
Lessee, Leases, Policy
Leases

Determination of Whether a Contract Contains a Lease

The Company evaluates the contracts it enters into to determine whether such contracts contain leases. A contract contains a lease if the contract conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. At commencement, contracts containing a lease are further evaluated for classification as an operating or finance lease where the Company is a lessee, or as an operating, sales-type or direct financing lease where the Company is a lessor, based on their terms.

ROU Model and Determination of Lease Term

The Company uses the right-of-use (“ROU”) model to account for leases where the Company is the lessee, which requires an entity to recognize a lease liability and ROU asset on the lease commencement date. A lease liability is measured equal to the present value of the remaining lease payments over the lease term and is discounted using the incremental borrowing rate, as the rate implicit in the Company’s leases is not readily determinable. The incremental borrowing rate is the rate of interest that the Company would have to pay to borrow, on a collateralized basis over a similar term, an amount equal to the lease payments in a similar economic environment. Lease payments include payments made before the commencement date and any residual value guarantees, if applicable. The initial ROU asset consists of the initial measurement of the lease liability, adjusted for any favorable or unfavorable terms for leases acquired from franchisees, as well as payments made before the commencement date, initial direct costs and lease incentives earned. When determining the lease term, the Company includes option periods that it is reasonably certain to exercise as failure to renew the lease would impose a significant economic detriment. For properties used for Company-operated restaurants, the primary economic detriment relates to the existence of unamortized leasehold improvements which might be impaired if we choose not to exercise the available renewal options. The lease term for properties leased or subleased to franchisees is determined based upon the economic detriment to the franchisee and includes consideration of the length of the franchise agreement, historical performance of the restaurant and the existence of bargain renewal options. Lease terms for real estate are generally initially between 15 and 20 years and, in most cases, provide for rent escalations and renewal options.

Operating Leases

For operating leases, minimum lease payments or receipts, including minimum scheduled rent increases, are recognized as rent expense where the Company is a lessee, or income where the Company is a lessor, as applicable, on a straight-line basis (“Straight-Line Rent”) over the applicable lease terms. There is a period under certain lease agreements referred to as a rent holiday (“Rent Holiday”) that generally begins on the possession date and ends on the rent commencement date. During a Rent Holiday, no cash rent payments are typically due under the terms of the lease; however, expense is recorded for that period on a straight-line basis. The excess of the Straight-Line Rent over the minimum rents paid is included in the ROU asset where the Company is a lessee. The excess of the Straight-Line Rent over the minimum rents received is recorded as a deferred lease asset and is included in “Other assets” where the Company is a lessor. Certain leases contain provisions, referred to as contingent rent (“Contingent Rent”), that require additional rental payments based upon restaurant sales volume. Contingent Rent is recognized each period as the liability is incurred or the asset is earned.

Lease cost for operating leases is recognized on a straight-line basis and includes the amortization of the ROU asset and interest expense related to the operating lease liability. Variable lease cost for operating leases includes Contingent Rent and payments for executory costs such as real estate taxes, insurance and common area maintenance, which are excluded from the measurement of the lease liability. Short-term lease cost for operating leases includes rental expense for leases with a term of less than 12 months. Lease costs are recorded in the consolidated statements of operations based on the nature of the underlying lease as follows: (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. When the expected term of a lease is determined to be shorter than the original amortization period, the favorable or unfavorable lease balance associated with the lease is adjusted to reflect the revised lease term.

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

Lease cost for finance leases includes the amortization of the ROU asset, which is amortized on a straight-line basis and recorded to “Depreciation and amortization,” and interest expense on the finance lease liability, which is calculated using the interest method and recorded to “Interest expense, net.” Finance lease ROU assets are amortized over the shorter of their estimated useful lives or the terms of the respective leases, including periods covered by renewal options that the Company is reasonably assured of exercising.

Sales-Type and Direct Financing Leases

For sales-type and direct financing leases where the Company is the lessor, the Company records its investment in properties leased to franchisees on a net basis, which is comprised of the present value of the lease payments not yet received and the present value of the guaranteed and unguaranteed residual assets. The current and long-term portions of our net investment in sales-type and direct financing leases are included in “Accounts and notes receivable, net” and “Net investment in sales-type and direct financing leases,” respectively. Unearned income is recognized as interest income over the lease term and is included in “Interest expense, net.” Sales-type leases result in the recognition of gain or loss at the commencement of the lease, which is recorded to “Other operating income, net.” The gain or loss recognized upon commencement of the lease is directly affected by the Company’s estimate of the amount to be derived from the guaranteed and unguaranteed residual assets at the end of the lease term. The Company’s main component of this estimate is the expected fair value of the underlying assets, primarily the fair value of land. Lessees’ variable payments to the Company for executory costs under sales-type and direct financing leases are recognized on a gross basis as “Franchise rental income” with a corresponding expense recorded to “Franchise rental expense.”

Significant Assumptions and Judgments

Management makes certain estimates and assumptions regarding each new lease and sublease agreement, renewal and amendment, including, but not limited to, property values, market rents, property lives, discount rates and probable term, all of which can impact (1) the classification and accounting for a lease or sublease as operating or finance, including sales-type and direct financing, (2) the Rent Holiday and escalations in payment that are taken into consideration when calculating Straight-Line Rent, (3) the term over which leasehold improvements for each restaurant are amortized and (4) the values and lives of adjustments to the initial ROU asset where the Company is the lessee, or favorable and unfavorable leases where the Company is the lessor. The amount of depreciation and amortization, interest and rent expense and income reported would vary if different estimates and assumptions were used.
Lessor, Leases, Policy
Leases

Determination of Whether a Contract Contains a Lease

The Company evaluates the contracts it enters into to determine whether such contracts contain leases. A contract contains a lease if the contract conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. At commencement, contracts containing a lease are further evaluated for classification as an operating or finance lease where the Company is a lessee, or as an operating, sales-type or direct financing lease where the Company is a lessor, based on their terms.

ROU Model and Determination of Lease Term

The Company uses the right-of-use (“ROU”) model to account for leases where the Company is the lessee, which requires an entity to recognize a lease liability and ROU asset on the lease commencement date. A lease liability is measured equal to the present value of the remaining lease payments over the lease term and is discounted using the incremental borrowing rate, as the rate implicit in the Company’s leases is not readily determinable. The incremental borrowing rate is the rate of interest that the Company would have to pay to borrow, on a collateralized basis over a similar term, an amount equal to the lease payments in a similar economic environment. Lease payments include payments made before the commencement date and any residual value guarantees, if applicable. The initial ROU asset consists of the initial measurement of the lease liability, adjusted for any favorable or unfavorable terms for leases acquired from franchisees, as well as payments made before the commencement date, initial direct costs and lease incentives earned. When determining the lease term, the Company includes option periods that it is reasonably certain to exercise as failure to renew the lease would impose a significant economic detriment. For properties used for Company-operated restaurants, the primary economic detriment relates to the existence of unamortized leasehold improvements which might be impaired if we choose not to exercise the available renewal options. The lease term for properties leased or subleased to franchisees is determined based upon the economic detriment to the franchisee and includes consideration of the length of the franchise agreement, historical performance of the restaurant and the existence of bargain renewal options. Lease terms for real estate are generally initially between 15 and 20 years and, in most cases, provide for rent escalations and renewal options.

Operating Leases

For operating leases, minimum lease payments or receipts, including minimum scheduled rent increases, are recognized as rent expense where the Company is a lessee, or income where the Company is a lessor, as applicable, on a straight-line basis (“Straight-Line Rent”) over the applicable lease terms. There is a period under certain lease agreements referred to as a rent holiday (“Rent Holiday”) that generally begins on the possession date and ends on the rent commencement date. During a Rent Holiday, no cash rent payments are typically due under the terms of the lease; however, expense is recorded for that period on a straight-line basis. The excess of the Straight-Line Rent over the minimum rents paid is included in the ROU asset where the Company is a lessee. The excess of the Straight-Line Rent over the minimum rents received is recorded as a deferred lease asset and is included in “Other assets” where the Company is a lessor. Certain leases contain provisions, referred to as contingent rent (“Contingent Rent”), that require additional rental payments based upon restaurant sales volume. Contingent Rent is recognized each period as the liability is incurred or the asset is earned.

Lease cost for operating leases is recognized on a straight-line basis and includes the amortization of the ROU asset and interest expense related to the operating lease liability. Variable lease cost for operating leases includes Contingent Rent and payments for executory costs such as real estate taxes, insurance and common area maintenance, which are excluded from the measurement of the lease liability. Short-term lease cost for operating leases includes rental expense for leases with a term of less than 12 months. Lease costs are recorded in the consolidated statements of operations based on the nature of the underlying lease as follows: (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. When the expected term of a lease is determined to be shorter than the original amortization period, the favorable or unfavorable lease balance associated with the lease is adjusted to reflect the revised lease term.

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

Lease cost for finance leases includes the amortization of the ROU asset, which is amortized on a straight-line basis and recorded to “Depreciation and amortization,” and interest expense on the finance lease liability, which is calculated using the interest method and recorded to “Interest expense, net.” Finance lease ROU assets are amortized over the shorter of their estimated useful lives or the terms of the respective leases, including periods covered by renewal options that the Company is reasonably assured of exercising.

Sales-Type and Direct Financing Leases

For sales-type and direct financing leases where the Company is the lessor, the Company records its investment in properties leased to franchisees on a net basis, which is comprised of the present value of the lease payments not yet received and the present value of the guaranteed and unguaranteed residual assets. The current and long-term portions of our net investment in sales-type and direct financing leases are included in “Accounts and notes receivable, net” and “Net investment in sales-type and direct financing leases,” respectively. Unearned income is recognized as interest income over the lease term and is included in “Interest expense, net.” Sales-type leases result in the recognition of gain or loss at the commencement of the lease, which is recorded to “Other operating income, net.” The gain or loss recognized upon commencement of the lease is directly affected by the Company’s estimate of the amount to be derived from the guaranteed and unguaranteed residual assets at the end of the lease term. The Company’s main component of this estimate is the expected fair value of the underlying assets, primarily the fair value of land. Lessees’ variable payments to the Company for executory costs under sales-type and direct financing leases are recognized on a gross basis as “Franchise rental income” with a corresponding expense recorded to “Franchise rental expense.”

Significant Assumptions and Judgments

Management makes certain estimates and assumptions regarding each new lease and sublease agreement, renewal and amendment, including, but not limited to, property values, market rents, property lives, discount rates and probable term, all of which can impact (1) the classification and accounting for a lease or sublease as operating or finance, including sales-type and direct financing, (2) the Rent Holiday and escalations in payment that are taken into consideration when calculating Straight-Line Rent, (3) the term over which leasehold improvements for each restaurant are amortized and (4) the values and lives of adjustments to the initial ROU asset where the Company is the lessee, or favorable and unfavorable leases where the Company is the lessor. The amount of depreciation and amortization, interest and rent expense and income reported would vary if different estimates and assumptions were used.
Concentration of Risk, Policy
Concentration of Risk

Wendy’s had no customers which accounted for 10% or more of consolidated revenues in 2019, 2018 or 2017. As of December 29, 2019, Wendy’s had one main in-line distributor of food, packaging and beverage products, excluding breads, that serviced approximately 52% of Wendy’s restaurants in the U.S. and five additional in-line distributors that, in the aggregate, serviced approximately 47% of Wendy’s restaurants in the U.S. We believe that our vulnerability to risk concentrations related to significant vendors and sources of our raw materials is mitigated as we believe that there are other vendors who would be able to service our requirements. However, if a disruption of service from any of our main in-line distributors was to occur, we could experience short-term increases in our costs while distribution channels were adjusted.

Wendy’s restaurants are principally located throughout the U.S. and to a lesser extent, in 30 foreign countries and U.S. territories with the largest number in Canada. Wendy’s U.S. restaurants are located in 50 states and the District of Columbia, with the largest number in Florida, Texas, Ohio, Georgia, California, North Carolina, Pennsylvania and Michigan. Because our restaurant operations are generally located throughout the U.S. and to a much lesser extent, Canada and other foreign countries and U.S. territories, we believe the risk of geographic concentration is not significant. We could be adversely affected by changing consumer preferences resulting from concerns over nutritional or safety aspects of beef, chicken, french fries or other products we sell or the effects of food safety events or disease outbreaks. Our exposure to foreign exchange risk is primarily related to fluctuations in the Canadian dollar relative to the U.S. dollar for our Canadian operations. 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.

The Company is subject to credit risk through its accounts receivable consisting primarily of amounts due from franchisees for royalties, franchise fees and rent. In addition, we have notes receivable from certain of our franchisees. The financial condition of these franchisees is largely dependent upon the underlying business trends of the Wendy’s brand and market conditions within the quick-service restaurant industry. This concentration of credit risk is mitigated, in part, by the number of franchisees and the short-term nature of the franchise receivables.
New Accounting Standards and New Accounting Standards Adopted, Policy
New Accounting Standards Adopted

Cloud Computing

In August 2018, the Financial Accounting Standards Board (“FASB”) issued new guidance on accounting for implementation costs of a cloud computing arrangement that is a service contract. The new guidance aligns the accounting for such implementation costs of a cloud computing arrangement that is a service contract with the guidance on capitalizing costs associated with developing or obtaining internal-use software. The Company adopted this amendment during the first quarter of 2019. The adoption of this guidance did not have a material impact on our consolidated financial statements.

Nonemployee Share-Based Payments

In June 2018, the FASB issued new guidance on nonemployee share-based payment arrangements. The new guidance aligns the requirements for nonemployee share-based payments with the requirements for employee share-based payments. The Company adopted this amendment during the first quarter of 2019. The adoption of this guidance did not have a material impact on our consolidated financial statements.

Leases

In February 2016, the FASB issued new guidance on leases, which outlines principles for the recognition, measurement, presentation and disclosure of leases applicable to both lessors and lessees. The new guidance requires lessees to recognize on the balance sheet the assets and liabilities for the rights and obligations created by finance and operating leases. The Company adopted the new guidance during the first quarter of 2019 using the effective date as the date of initial application; therefore, the comparative periods have not been adjusted and continue to be reported under the previous lease guidance.

The new standard provides a number of optional practical expedients in transition. The Company elected the package of practical expedients, which permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. For those leases that fall under the definition of a short-term lease, the Company elected the short-term lease recognition exemption. Under this practical expedient, for those leases that qualify, we did not recognize ROU assets or liabilities, which included not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition. The Company also elected the practical expedient for lessees to account for lease components and nonlease components as a single lease component for all underlying classes of assets. In addition, the Company elected the practical expedient for lessors to account for lease components and nonlease components as a single lease component in instances where the lease component is predominant, the timing and pattern of transfer for the lease component and nonlease component are the same and the lease component, if accounted for separately, would be classified as an operating lease. The Company did not elect the use-of-hindsight practical expedient.

The standard had a material impact on our consolidated balance sheets and related disclosures. Upon adoption at the beginning of 2019, we recognized operating lease liabilities of $1,011,000 based on the present value of the remaining minimum rental payments, with corresponding ROU assets of $934,000. The measurement of the operating lease ROU assets included, among other items, favorable lease amounts of $23,000 and unfavorable lease amounts of $30,000, which were previously included in “Other intangible assets” and “Other liabilities,” respectively, as well as the excess of rent expense recognized on a straight-line basis over the minimum rents paid of $67,000, which was previously included in “Other liabilities.” In addition, the standard requires lessors to recognize lessees’ payments to the Company for executory costs on a gross basis as revenue with a corresponding expense, which resulted in an increase of approximately $38,000 to our 2019 franchise rental income and expense. The Company also recognized a decrease to retained earnings of $1,105 as a result of impairing newly recognized ROU assets upon transition to the new guidance. The adoption of the guidance did not have a material impact on our consolidated statement of cash flows.

In connection with the adoption of the standard, the Company has reclassified finance lease ROU assets to “Finance lease assets,” which were previously recorded to “Properties.” The Company also reclassified the current and long-term finance lease liabilities to “Current portion of finance lease liabilities” and “Long-term finance lease liabilities,” respectively, which were previously recorded to “Current portion of long-term debt” and “Long-term debt,” respectively. The prior period amounts in the consolidated balance sheet and in the related notes to the financial statements reflect the reclassifications of these assets and liabilities to conform to the current year presentation.

The following table illustrates the reclassifications made to the consolidated balance sheet as of December 30, 2018:
 
As Previously Reported
 
Reclassifications
 
As Currently Reported
Properties
$
1,213,236

 
$
(189,969
)
 
$
1,023,267

Finance lease assets
—

 
189,969

 
189,969

Current portion of long-term debt
31,655

 
(8,405
)
 
23,250

Current portion of finance lease liabilities
—

 
8,405

 
8,405

Long-term debt
2,752,783

 
(447,231
)
 
2,305,552

Long-term finance lease liabilities
—

 
447,231

 
447,231



In addition, the Company reclassified repayments of finance lease liabilities to “Repayments of finance lease liabilities,” which were previously recorded to “Repayments of long-term debt.” The prior period amounts in the consolidated statements of cash flows reflect the reclassifications of these cash flows to conform to the current year presentation.

The following tables illustrate the reclassifications made to the consolidated statements of cash flows for 2018 and 2017:
 
2018
 
As Previously Reported
 
Reclassifications
 
As Currently Reported
Repayments of long-term debt
$
(900,072
)
 
$
5,571

 
$
(894,501
)
Repayments of finance lease liabilities
—

 
(5,571
)
 
(5,571
)

 
2017
 
As Previously Reported
 
Reclassifications
 
As Currently Reported
Repayments of long-term debt
$
(58,113
)
 
$
5,520

 
$
(52,593
)
Repayments of finance lease liabilities
—

 
(5,520
)
 
(5,520
)

Revenue Recognition

In May 2014, the FASB issued amended guidance for revenue recognition. The new guidance outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The core principle of the guidance is that an entity should recognize revenue for the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. Additionally, the guidance requires improved disclosure to help users of financial statements better understand the nature, amount, timing and uncertainty of revenue that is recognized. The Company adopted the new guidance on January 1, 2018. As a result, the Company has changed its accounting policy for revenue recognition as detailed below.

The Company applied the new guidance using the modified retrospective method, whereby the cumulative effect of initially adopting the guidance was recognized as an adjustment to the opening balance of equity at January 1, 2018. Therefore, the comparative period has not been adjusted and continues to be reported under the previous revenue recognition guidance. The details of the significant changes and quantitative impact of the changes are discussed below.

Franchise Fees

Under previous revenue recognition guidance, new build technical assistance fees and development fees were recognized as revenue when a franchised restaurant opened, as all material services and conditions related to the franchise fee had been substantially performed upon the restaurant opening. In addition, under previous guidance, technical assistance fees received in connection with sales of Company-operated restaurants to franchisees and facilitating Franchise Flips, as well as renewal fees, were recognized as revenue when the franchise agreements were signed and the restaurants opened. Under the new guidance, these franchise fees are considered highly dependent upon and interrelated with the franchise right granted in the franchise agreement. As such, these franchise fees are recognized over the contractual term of the franchise agreement.

National Advertising Funds

Previously, the revenue, expenses and cash flows of the Advertising Funds were not included in the Company’s consolidated statements of operations and statements of cash flows because the contributions to the Advertising Funds were designated for specific purposes and the Company acted as an agent, in substance, with regard to these contributions as a result of industry-specific guidance. Under the new guidance, which superseded the previous industry-specific guidance, the revenue, expenses and cash flows of the Advertising Funds are fully consolidated into the Company’s consolidated statements of operations and statements of cash flows.
Impacts on Financial Statements

The following tables summarize the impacts of adopting the revenue recognition standard on the Company’s consolidated financial statements:
 
 
 
Adjustments
 
 
 
As Reported
 
Franchise Fees
 
Advertising Funds
 
Balances Without Adoption
Consolidated Balance Sheet
 
 
 
 
 
 
 
December 30, 2018
 
 
 
 
 
 
 
Accrued expenses and other current liabilities
$
150,636

 
$
(3,079
)
 
$
—

 
$
147,557

Advertising funds restricted liabilities
80,153

 
—

 
(2,492
)
 
77,661

Total current liabilities
284,185

 
(3,079
)
 
(2,492
)
 
278,614

Deferred income taxes
269,160

 
21,861

 
—

 
291,021

Deferred franchise fees
92,232

 
(81,551
)
 
—

 
10,681

Total liabilities
3,643,586

 
(62,769
)
 
(2,492
)
 
3,578,325

Retained earnings
146,277

 
63,174

 
2,492

 
211,943

Accumulated other comprehensive loss
(61,673
)
 
(405
)
 
—

 
(62,078
)
Total stockholders’ equity
648,449

 
62,769

 
2,492

 
713,710

 
 
 
 
 
 
 
 
Consolidated Statement of Operations
 
 
 
 
 
 
Year Ended December 30, 2018
 
 
 
 
 
 
 
Franchise royalty revenue and fees (a)
$
409,043

 
$
(525
)
 
$
—

 
$
408,518

Advertising funds revenue
326,019

 
—

 
(326,019
)
 
—

Total revenues
1,589,936

 
(525
)
 
(326,019
)
 
1,263,392

Advertising funds expense
321,866

 
—

 
(321,866
)
 
—

Total costs and expenses
1,340,044

 
—

 
(321,866
)
 
1,018,178

Operating profit
249,892

 
(525
)
 
(4,153
)
 
245,214

Income before income taxes
574,916

 
(525
)
 
(4,153
)
 
570,238

Provision for income taxes
(114,801
)
 
134

 
—

 
(114,667
)
Net income
460,115

 
(391
)
 
(4,153
)
 
455,571

_______________

(a)
The adjustments for 2018 include the reversal of franchise fees recognized over time under the new revenue recognition guidance of $9,641, as well as franchisee fees that would have been recognized under the previous revenue recognition guidance when the franchise agreements were signed and the restaurants opened of $9,116. See Note 2 for further information.
 
 
 
Adjustments
 
 
 
As Reported
 
Franchise Fees
 
Advertising Funds
 
Balances Without Adoption
Consolidated Statement of Cash Flows
 
 
 
 
 
 
 
Year Ended December 30, 2018
 
 
 
 
 
 
 
Cash flows from operating activities:
 
 
 
 
 
 
 
Net income
$
460,115

 
$
(391
)
 
$
(4,153
)
 
$
455,571

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
 
 
 
Deferred income tax
(6,568
)
 
(134
)
 
—

 
(6,702
)
Other, net
5,178

 
(502
)
 
—

 
4,676

Changes in operating assets and liabilities:
 
 
 
 
 
 
 
Advertising funds restricted assets and liabilities
13,955

 
—

 
4,153

 
18,108

Accrued expenses and other current liabilities
23,963

 
1,027

 
—

 
24,990



New Accounting Standards

Income Taxes

In December 2019, the FASB issued new guidance to simplify the accounting for income taxes by removing certain exceptions to the general principles and the simplification of areas such as franchise taxes, step-up in tax basis goodwill, separate entity financial statements and interim recognition of enactment of tax laws or rate changes. The standard is effective beginning with our 2021 fiscal year. The Company does not expect the guidance to have a material impact on our consolidated financial statements.

Fair Value Measurement

In August 2018, the FASB issued new guidance on disclosure requirements for fair value measurements, which is effective beginning with our 2020 fiscal year. The objective of the new guidance is to provide additional information about assets and liabilities measured at fair value in the statement of financial position or disclosed in the notes to financial statements. New incremental disclosure requirements include the amount of fair value hierarchy level 3 changes in unrealized gains and losses and the range and weighted average used to develop significant unobservable inputs for level 3 fair value measurements. The Company does not expect the amendment to have a material impact on our consolidated financial statements.

Goodwill Impairment

In January 2017, the FASB issued an amendment that simplifies the accounting for goodwill impairment by eliminating step two from the goodwill impairment test. The Company does not expect the amendment, which is effective beginning with our 2020 fiscal year, to have a material impact on our consolidated financial statements.

Credit Losses

In June 2016, the FASB issued an amendment that will require the Company to use a current expected credit loss model that will result in the immediate recognition of an estimate of credit losses that are expected to occur over the life of the financial instruments that are within the scope of the guidance, including trade receivables. The amendment is effective beginning with our 2020 fiscal year. The Company does not expect the amendment to have a material impact on our consolidated financial statements.
v3.19.3.a.u2
Summary of Significant Accounting Policies (Tables)
 12 Months Ended
Dec. 29, 2019
Accounting Standards Update 2016-02  
New Accounting Pronouncements or Change in Accounting Principle  
Schedule of Prior Period Adjustments
The following table illustrates the reclassifications made to the consolidated balance sheet as of December 30, 2018:
 
As Previously Reported
 
Reclassifications
 
As Currently Reported
Properties
$
1,213,236

 
$
(189,969
)
 
$
1,023,267

Finance lease assets
—

 
189,969

 
189,969

Current portion of long-term debt
31,655

 
(8,405
)
 
23,250

Current portion of finance lease liabilities
—

 
8,405

 
8,405

Long-term debt
2,752,783

 
(447,231
)
 
2,305,552

Long-term finance lease liabilities
—

 
447,231

 
447,231



In addition, the Company reclassified repayments of finance lease liabilities to “Repayments of finance lease liabilities,” which were previously recorded to “Repayments of long-term debt.” The prior period amounts in the consolidated statements of cash flows reflect the reclassifications of these cash flows to conform to the current year presentation.

The following tables illustrate the reclassifications made to the consolidated statements of cash flows for 2018 and 2017:
 
2018
 
As Previously Reported
 
Reclassifications
 
As Currently Reported
Repayments of long-term debt
$
(900,072
)
 
$
5,571

 
$
(894,501
)
Repayments of finance lease liabilities
—

 
(5,571
)
 
(5,571
)

 
2017
 
As Previously Reported
 
Reclassifications
 
As Currently Reported
Repayments of long-term debt
$
(58,113
)
 
$
5,520

 
$
(52,593
)
Repayments of finance lease liabilities
—

 
(5,520
)
 
(5,520
)
Accounting Standards Update 2014-09  
New Accounting Pronouncements or Change in Accounting Principle  
Schedule of New Accounting Pronouncements and Changes in Accounting Principles
The following tables summarize the impacts of adopting the revenue recognition standard on the Company’s consolidated financial statements:
 
 
 
Adjustments
 
 
 
As Reported
 
Franchise Fees
 
Advertising Funds
 
Balances Without Adoption
Consolidated Balance Sheet
 
 
 
 
 
 
 
December 30, 2018
 
 
 
 
 
 
 
Accrued expenses and other current liabilities
$
150,636

 
$
(3,079
)
 
$
—

 
$
147,557

Advertising funds restricted liabilities
80,153

 
—

 
(2,492
)
 
77,661

Total current liabilities
284,185

 
(3,079
)
 
(2,492
)
 
278,614

Deferred income taxes
269,160

 
21,861

 
—

 
291,021

Deferred franchise fees
92,232

 
(81,551
)
 
—

 
10,681

Total liabilities
3,643,586

 
(62,769
)
 
(2,492
)
 
3,578,325

Retained earnings
146,277

 
63,174

 
2,492

 
211,943

Accumulated other comprehensive loss
(61,673
)
 
(405
)
 
—

 
(62,078
)
Total stockholders’ equity
648,449

 
62,769

 
2,492

 
713,710

 
 
 
 
 
 
 
 
Consolidated Statement of Operations
 
 
 
 
 
 
Year Ended December 30, 2018
 
 
 
 
 
 
 
Franchise royalty revenue and fees (a)
$
409,043

 
$
(525
)
 
$
—

 
$
408,518

Advertising funds revenue
326,019

 
—

 
(326,019
)
 
—

Total revenues
1,589,936

 
(525
)
 
(326,019
)
 
1,263,392

Advertising funds expense
321,866

 
—

 
(321,866
)
 
—

Total costs and expenses
1,340,044

 
—

 
(321,866
)
 
1,018,178

Operating profit
249,892

 
(525
)
 
(4,153
)
 
245,214

Income before income taxes
574,916

 
(525
)
 
(4,153
)
 
570,238

Provision for income taxes
(114,801
)
 
134

 
—

 
(114,667
)
Net income
460,115

 
(391
)
 
(4,153
)
 
455,571

_______________

(a)
The adjustments for 2018 include the reversal of franchise fees recognized over time under the new revenue recognition guidance of $9,641, as well as franchisee fees that would have been recognized under the previous revenue recognition guidance when the franchise agreements were signed and the restaurants opened of $9,116. See Note 2 for further information.
 
 
 
Adjustments
 
 
 
As Reported
 
Franchise Fees
 
Advertising Funds
 
Balances Without Adoption
Consolidated Statement of Cash Flows
 
 
 
 
 
 
 
Year Ended December 30, 2018
 
 
 
 
 
 
 
Cash flows from operating activities:
 
 
 
 
 
 
 
Net income
$
460,115

 
$
(391
)
 
$
(4,153
)
 
$
455,571

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
 
 
 
Deferred income tax
(6,568
)
 
(134
)
 
—

 
(6,702
)
Other, net
5,178

 
(502
)
 
—

 
4,676

Changes in operating assets and liabilities:
 
 
 
 
 
 
 
Advertising funds restricted assets and liabilities
13,955

 
—

 
4,153

 
18,108

Accrued expenses and other current liabilities
23,963

 
1,027

 
—

 
24,990
v3.19.3.a.u2
Revenue (Tables)
 12 Months Ended
Dec. 29, 2019
Revenue [Abstract]  
Disaggregation of Revenue
The following tables disaggregate revenue by segment and source for 2019, 2018 and 2017:
 
2019
 
Wendy’s U.S.
 
Wendy’s International
 
Global Real Estate & Development
 
Total
Sales at Company-operated restaurants
$
707,485

 
$
—

 
$
—

 
$
707,485

Franchise royalty revenue
355,702

 
44,998

 
—

 
400,700

Franchise fees
21,889

 
2,978

 
3,432

 
28,299

Franchise rental income
—

 
—

 
233,065

 
233,065

Advertising funds revenue
319,231

 
20,222

 
—

 
339,453

Total revenues
$
1,404,307

 
$
68,198

 
$
236,497

 
$
1,709,002



 
2018
 
Wendy’s U.S.
 
Wendy’s International
 
Global Real Estate & Development
 
Total
Sales at Company-operated restaurants
$
651,577

 
$
—

 
$
—

 
$
651,577

Franchise royalty revenue
335,500

 
42,446

 
—

 
377,946

Franchise fees
18,972

 
5,607

 
6,518

 
31,097

Franchise rental income
—

 
—

 
203,297

 
203,297

Advertising funds revenue
306,442

 
19,577

 
—

 
326,019

Total revenues
$
1,312,491

 
$
67,630

 
$
209,815

 
$
1,589,936


 
2017
 
Wendy’s U.S.
 
Wendy’s International
 
Global Real Estate & Development
 
Total
Sales at Company-operated restaurants
$
622,802

 
$
—

 
$
—

 
$
622,802

Franchise royalty revenue
326,846

 
39,126

 
—

 
365,972

Franchise fees
37,090

 
4,570

 
2,871

 
44,531

Franchise rental income
—

 
—

 
190,103

 
190,103

Total revenues
$
986,738

 
$
43,696

 
$
192,974

 
$
1,223,408
Contract balances, assets and liabilities
The following table provides information about receivables and contract liabilities (deferred franchise fees) from contracts with customers:
 
December 29,
2019 (a)
 
December 30,
2018 (a)
Receivables, which are included in “Accounts and notes receivable, net” (b)
$
39,188

 
$
40,300

Receivables, which are included in “Advertising funds restricted assets”
54,394

 
47,332

Deferred franchise fees (c)
100,689

 
102,205

_______________

(a)
Excludes funds collected from the sale of gift cards, which are primarily reimbursed to franchisees upon redemption at franchised restaurants and do not ultimately result in the recognition of revenue in the Company’s consolidated statements of operations.

(b)
Includes receivables related to “Sales” and “Franchise royalty revenue and fees.”

(c)
Deferred franchise fees are included in “Accrued expenses and other current liabilities” and “Deferred franchise fees” and totaled $8,899 and $91,790 as of December 29, 2019, respectively, and $9,973 and $92,232 as of December 30, 2018, respectively.
Deferred franchise fee rollforward
Significant changes in deferred franchise fees are as follows:
 
2019
 
2018
Deferred franchise fees at beginning of period
$
102,205

 
$
102,492

Revenue recognized during the period
(9,487
)
 
(9,641
)
New deferrals due to cash received and other
7,971

 
9,354

Deferred franchise fees at end of period
$
100,689

 
$
102,205
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction
The following table reflects the estimated franchise fees to be recognized in the future related to performance obligations that are unsatisfied at the end of the period:
Estimate for fiscal year:
 
2020
$
8,899

2021
6,147

2022
5,898

2023
5,721

2024
5,518

Thereafter
68,506

 
$
100,689
v3.19.3.a.u2
System Optimization (Gains) Losses, Net (Tables)
 12 Months Ended
Dec. 29, 2019
Property, Plant and Equipment  
Summary of Disposition Activity
 
Year End
 
December 29, 2019
 
December 30, 2018
Land
$
375,109

 
$
377,277

Buildings and improvements
508,602

 
507,219

Leasehold improvements
405,158

 
403,896

Office, restaurant and transportation equipment
279,799

 
266,030

 
1,568,668

 
1,554,422

Accumulated depreciation and amortization
(591,668
)
 
(531,155
)
 
$
977,000

 
$
1,023,267
System Optimization  
Property, Plant and Equipment  
Summary of Disposition Activity
The following is a summary of the disposition activity recorded as a result of our system optimization initiative:
 
Year Ended
 
2019
 
2018
 
2017
Number of restaurants sold to franchisees
—

 
3

 
—

 
 
 
 
 
 
Proceeds from sales of restaurants
$
—

 
$
1,436

 
$
—

Net assets sold (a)
—

 
(1,370
)
 
—

Goodwill related to sales of restaurants
—

 
(208
)
 
—

Net favorable leases
—

 
220

 
—

Other
—

 
11

 
—

 
—

 
89

 
—

Post-closing adjustments on sales of restaurants (b)
1,087

 
445

 
2,541

Gain on sales of restaurants, net
1,087

 
534

 
2,541

Gain (loss) on sales of other assets, net (c)
196

 
(71
)
 
2,018

Loss on DavCo and NPC Transactions
—

 
—

 
(43,635
)
System optimization gains (losses), net
$
1,283

 
$
463

 
$
(39,076
)
_______________

(a)
Net assets sold consisted primarily of equipment.

(b)
2019, 2018 and 2017 include the recognition of deferred gains of $911, $1,029 and $312, respectively, as a result of the resolution of certain contingencies related to the extension of lease terms for restaurants previously sold to franchisees. 2018 and 2017 also include cash proceeds, net of payments, of $6 and $294, respectively, related to post-closing reconciliations with franchisees. Additionally, 2017 includes the recognition of a deferred gain of $1,822 (C$2,300) resulting from the release of a guarantee provided by Wendy’s to a lender on behalf of a franchisee in connection with the sale of eight Canadian restaurants to the franchisee during 2014.

(c)
During 2019, 2018 and 2017, Wendy’s received cash proceeds of $3,448, $1,781 and $10,534, respectively, primarily from the sale of surplus properties. 2017 also includes the recognition of a deferred gain of $375 related to the sale of a share in an aircraft.
Summary of DavCo and NPC Transactions
The following is a summary of the activity recorded as a result of the DavCo and NPC Transactions:
 
Year Ended
 
2017
Acquisition (a)
 
Total consideration paid
$
86,788

Identifiable assets and liabilities assumed:
 
Net assets held for sale
70,688

Finance lease assets
49,360

Deferred taxes
27,830

Finance lease obligations
(97,797
)
Net unfavorable leases (b)
(22,330
)
Other liabilities (c)
(6,924
)
Total identifiable net assets
20,827

Goodwill (d)
$
65,961

 
 
Disposition
 
Proceeds
$
70,688

Net assets sold
(70,688
)
Goodwill (d)
(65,961
)
Net favorable leases (e)
24,034

Other (f)
(1,708
)
Loss on DavCo and NPC Transactions
$
(43,635
)
_______________

(a)
The fair values of the identifiable intangible assets and taxes related to the acquisition were provisional amounts as of December 31, 2017, pending final purchase accounting adjustments. The Company finalized the purchase price allocation during 2018 with no differences from the provisional amounts previously reported. The Company utilized management estimates and consultation with an independent third-party valuation firm to assist in the valuation process.

(b)
Includes favorable lease assets of $1,229 and unfavorable lease liabilities of $23,559.

(c)
Includes a supplemental purchase price liability recorded to “Accrued expenses and other current liabilities” of $6,269, which was settled during 2018 upon the resolution of certain lease-related matters.

(d)
Includes tax deductible goodwill of $21,795.

(e)
The Company recorded favorable lease assets of $30,068 and unfavorable lease liabilities of $6,034 as a result of subleasing land, buildings and leasehold improvements to NPC.

(f)
Includes cash payments for selling and other costs associated with the transaction.

v3.19.3.a.u2
Acquisitions (Tables)
 12 Months Ended
Dec. 29, 2019
Business Combinations [Abstract]  
Schedule of Business Acquisitions, by Acquisition 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 franchisees:
 
Year Ended
 
2019
 
2018 (a)
 
2017
Restaurants acquired from franchisees
5

 
16

 
—

 
 
 
 
 
 
Total consideration paid, net of cash received
$
5,052

 
$
21,401

 
$
—

Identifiable assets acquired and liabilities assumed:
 
 
 
 
 
Properties
666

 
4,363

 
—

Acquired franchise rights
1,354

 
10,127

 
—

Finance lease assets
5,350

 
5,360

 
—

Other assets
—

 
621

 
—

Finance lease liabilities
(4,084
)
 
(3,135
)
 
—

Unfavorable leases
—

 
(733
)
 
—

Other
(2,316
)
 
(2,240
)
 
—

Total identifiable net assets
970

 
14,363

 
—

Goodwill
$
4,082

 
$
7,038

 
$
—

_______________

(a) The fair values of the identifiable intangible assets related to restaurants acquired in 2018 were provisional amounts as of December 30, 2018, pending final purchase accounting adjustments. The Company finalized the purchase price allocation during the three months ended March 31, 2019, which resulted in a decrease in the fair value of acquired franchise rights of $2,989 and an increase in deferred tax assets of $140.
v3.19.3.a.u2
Reorganization and Reorganization Costs (Tables)
 12 Months Ended
Dec. 29, 2019
Restructuring Cost and Reserve  
Restructuring and Related Costs

The following is a summary of the initiatives included in “Reorganization and realignment costs:”
 
Year Ended
 
2019
 
2018
 
2017
IT realignment
$
9,127

 
$
—

 
$
—

G&A realignment
7,749

 
8,785

 
21,663

System optimization initiative
89

 
283

 
911

Reorganization and realignment costs
$
16,965

 
$
9,068

 
$
22,574
IT Realignment  
Restructuring Cost and Reserve  
Restructuring and Related Costs
The following is a summary of the activity recorded as a result of the IT realignment plan:
 
2019
Severance and related employee costs
$
7,548

Third-party and other costs
1,386

 
8,934

Share-based compensation (a)
193

Total IT realignment
$
9,127

_______________

(a)
Primarily represents incremental share-based compensation resulting from the modification of stock options in connection with the termination of employees under our IT realignment plan.
Schedule of Restructuring Reserve by Type of Cost
The table below presents a rollforward of our accruals for the plan, which are included in “Accrued expenses and other current liabilities” and “Other liabilities” and totaled $8,025 and $599 as of December 29, 2019, respectively.
 
Balance
December 30, 2018
 
Charges
 
Payments
 
Balance
December 29, 2019
Severance and related employee costs
$
—

 
$
7,548

 
$
—

 
$
7,548

Third-party and other costs
—

 
1,386

 
(310
)
 
1,076

 
$
—

 
$
8,934

 
$
(310
)
 
$
8,624
G&A Realignment  
Restructuring Cost and Reserve  
Restructuring and Related Costs
The following is a summary of the activity recorded as a result of the G&A realignment plan:
 
Year Ended
 
Total Incurred
Since Inception
 
2019
 
2018
 
2017
 
Severance and related employee costs
$
5,485

 
$
3,797

 
$
14,956

 
$
24,238

Recruitment and relocation costs
950

 
1,077

 
489

 
2,516

Third-party and other costs
100

 
1,019

 
1,091

 
2,210

 
6,535

 
5,893

 
16,536

 
28,964

Share-based compensation (a)
1,214

 
1,557

 
5,127

 
7,898

Termination of defined benefit plans (b)
—

 
1,335

 
—

 
1,335

Total G&A realignment
$
7,749

 
$
8,785

 
$
21,663

 
$
38,197

_______________

(a)
Primarily represents incremental share-based compensation resulting from the modification of stock options in connection with the termination of employees under our G&A realignment plan.

(b)
During 2018, the Company terminated two frozen defined benefit plans. See Note 19 for further information.

Schedule of Restructuring Reserve by Type of Cost
The accruals for our G&A realignment plan are included in “Accrued expenses and other current liabilities” and “Other liabilities” and totaled $4,504 and $855 as of December 29, 2019, respectively, and $6,280 and $1,044 as of December 30, 2018, respectively. The tables below present a rollforward of our accruals for the plan.
 
Balance
December 30, 2018
 
Charges
 
Payments
 
Balance
December 29, 2019
Severance and related employee costs
$
7,241

 
$
5,485

 
$
(7,450
)
 
$
5,276

Recruitment and relocation costs
83

 
950

 
(950
)
 
83

Third-party and other costs
—

 
100

 
(100
)
 
—

 
$
7,324

 
$
6,535

 
$
(8,500
)
 
$
5,359



 
Balance
December 31,
2017
 
Charges
 
Payments
 
Balance
December 30, 2018
Severance and related employee costs
$
12,093

 
$
3,797

 
$
(8,649
)
 
$
7,241

Recruitment and relocation costs
177

 
1,077

 
(1,171
)
 
83

Third-party and other costs
—

 
1,019

 
(1,019
)
 
—

 
$
12,270

 
$
5,893

 
$
(10,839
)
 
$
7,324
System Optimization  
Restructuring Cost and Reserve  
Restructuring and Related Costs
The following is a summary of the costs recorded as a result of our system optimization initiative:
 
Year Ended
 
Total Incurred Since Inception
 
2019
 
2018
 
2017
 
Severance and related employee costs
$
—

 
$
—

 
$
3

 
$
18,237

Professional fees
72

 
264

 
838

 
17,784

Other
17

 
19

 
70

 
5,849

 
89

 
283

 
911

 
41,870

Accelerated depreciation and amortization (a)
—

 
—

 
—

 
25,398

Share-based compensation (b)
—

 
—

 
—

 
5,013

Total system optimization initiative
$
89

 
$
283

 
$
911

 
$
72,281

_______________

(a)
Primarily includes accelerated amortization of previously acquired franchise rights related to Company-operated restaurants in territories that have been sold to franchisees in connection with our system optimization initiative.

(b)
Represents incremental share-based compensation resulting from the modification of stock options and performance-based awards in connection with the termination of employees under our system optimization initiative.
Schedule of Restructuring Reserve by Type of Cost
The table below presents a rollforward of our accruals for our system optimization initiative, which were included in “Accrued expenses and other current liabilities” and “Other liabilities.” As of both December 29, 2019 and December 30, 2018, no accrual remained.
 
Balance
January 1, 2017
 
Charges
 
Payments
 
Balance
December 31, 2017
Severance and related employee costs
$
—

 
$
3

 
$
(3
)
 
$
—

Recruitment and relocation costs
101

 
838

 
(939
)
 
—

Other
—

 
70

 
(70
)
 
—

 
$
101

 
$
911

 
$
(1,012
)
 
$
—
v3.19.3.a.u2
Income Per Share (Tables)
 12 Months Ended
Dec. 29, 2019
Earnings Per Share [Abstract]  
Number of shares used to calculate basic and diluted income per share
The weighted average number of shares used to calculate basic and diluted income per share were as follows:
 
Year Ended
 
2019
 
2018
 
2017
Common stock:
 
 
 
 
 
Weighted average basic shares outstanding
229,944

 
237,797

 
244,179

Dilutive effect of stock options and restricted shares
5,131

 
7,166

 
8,110

Weighted average diluted shares outstanding
235,075

 
244,963

 
252,289
v3.19.3.a.u2
Cash and Receivables (Tables)
 12 Months Ended
Dec. 29, 2019
Cash and Receivables [Abstract]  
Schedule of Cash and Cash Equivalents
 
Year End
 
December 29, 2019
 
December 30, 2018
Cash and cash equivalents
 
 
 
Cash
$
185,203

 
$
209,177

Cash equivalents
114,992

 
222,228

 
300,195

 
431,405

Restricted cash
 
 
 
Accounts held by trustee for the securitized financing facility
34,209

 
29,538

Trust for termination costs for former Wendy’s executives
111

 
109

Other
219

 
213

 
34,539

 
29,860

Advertising Funds (a)
23,973

 
25,247

 
58,512

 
55,107

Total cash, cash equivalents and restricted cash
$
358,707

 
$
486,512

_______________

(a)
Included in “Advertising funds restricted assets.”
Schedule of Accounts, Notes, Loans and Financing Receivable
 
 
Year End
 
 
December 29, 2019
 
December 30, 2018
Accounts and Notes Receivable, Net
 
 
 
 
Current
 
 
 
 
Accounts receivable:
 
 
 
 
Franchisees
 
$
55,570

 
$
60,567

Other (a)
 
48,282

 
51,320

 
 
103,852

 
111,887

Notes receivable from franchisees (b) (c)
 
23,628

 
2,857

 
 
127,480

 
114,744

Allowance for doubtful accounts
 
(10,019
)
 
(4,939
)
 
 
$
117,461

 
$
109,805

 
 
 
 
 
Non-current (d)
 
 
 
 
Notes receivable from franchisees (c)
 
$
1,617

 
$
16,322

Allowance for doubtful accounts (c)
 
—

 
(2,000
)
 
 
$
1,617

 
$
14,322

_______________

(a)
Includes income tax refund receivables of $13,555 and $14,475 as of December 29, 2019 and December 30, 2018, respectively. Additionally, 2019 and 2018 include receivables of $25,350 and $22,500, respectively, related to insurance coverage for the FI Case. See Note 11 for further information on our legal reserves.

(b)
Includes the current portion of sales-type and direct financing lease receivables of $3,146 and $735 as of December 29, 2019 and December 30, 2018, respectively. See Note 20 for further information.

(c)
Includes a note receivable from a franchisee in Indonesia, of which $1,262 and $969 are included in current notes receivable and $1,617 and $2,522 are included in non-current notes receivable as of December 29, 2019 and December 30, 2018, respectively.

Includes notes receivable from the Brazil JV of $15,920 as of December 29, 2019, which is included in current notes receivable, and $12,800 as of December 30, 2018, which is included in non-current notes receivable. As of December 29, 2019 and December 30, 2018, the Company had reserves of $5,720 and $2,000, respectively, on the loans outstanding to the Brazil JV. See Note 8 for further information.

Includes a note receivable from a franchisee in India totaling $1,000, which is included in current notes receivable as of December 29, 2019 and in non-current notes receivable as of December 30, 2018. During 2019, the Company recorded a reserve of $985 on the loan outstanding to the franchisee in India.

Includes a note receivable from a U.S. franchisee totaling $1,000, which is included in current notes receivable as of December 29, 2019.

(d)
Included in “Other assets.”
Allowance for Doubtful Accounts
The following is an analysis of the allowance for doubtful accounts:
 
Year Ended
 
2019
 
2018
 
2017
Balance at beginning of year:
 
 
 
 
 
Current
$
4,939

 
$
4,546

 
$
4,030

Non-current
2,000

 
—

 
26

Provision for doubtful accounts:
 
 
 
 
 
Franchisees and other
3,294

 
2,562

 
579

Uncollectible accounts written off, net of recoveries
(214
)
 
(169
)
 
(89
)
Balance at end of year:
 
 
 
 
 
Current
10,019

 
4,939

 
4,546

Non-current
—

 
2,000

 
—

Total
$
10,019

 
$
6,939

 
$
4,546
v3.19.3.a.u2
Investments (Tables)
 12 Months Ended
Dec. 29, 2019
Schedule of Equity Method Investments  
Schedule of Equity Method Investments and Other Investments in Equity Securities

The following is a summary of the carrying value of our investments:
 
Year End
 
December 29,
2019
 
December 30,
2018
Equity method investments
$
45,310

 
$
47,021

Other investments in equity securities
639

 
639

 
$
45,949

 
$
47,660
Schedule of Equity Method Investments
Presented below is activity related to our portion of TimWen and the Brazil JV included in our consolidated balance sheets and consolidated statements of operations as of and for the years ended December 29, 2019, December 30, 2018 and December 31, 2017.
 
Year Ended
 
2019
 
2018
 
2017
Balance at beginning of period
$
47,021

 
$
55,363

 
$
54,545

 
 
 
 
 
 
Investment
—

 
13

 
375

 
 
 
 
 
 
Equity in earnings for the period
10,943

 
10,402

 
9,897

Amortization of purchase price adjustments (a)
(2,270
)
 
(2,326
)
 
(2,324
)
 
8,673

 
8,076

 
7,573

Distributions received
(13,400
)
 
(13,390
)
 
(11,713
)
Foreign currency translation adjustment included in
    “Other comprehensive income (loss), net” and other
3,016

 
(3,041
)
 
4,583

Balance at end of period
$
45,310

 
$
47,021

 
$
55,363

_______________

(a)
Purchase price adjustments that impacted the carrying value of the Company’s investment in TimWen are being amortized over the average original aggregate life of 21 years.
v3.19.3.a.u2
Properties (Tables)
 12 Months Ended
Dec. 29, 2019
Property, Plant and Equipment [Abstract]  
Properties
 
Year End
 
December 29, 2019
 
December 30, 2018
Land
$
375,109

 
$
377,277

Buildings and improvements
508,602

 
507,219

Leasehold improvements
405,158

 
403,896

Office, restaurant and transportation equipment
279,799

 
266,030

 
1,568,668

 
1,554,422

Accumulated depreciation and amortization
(591,668
)
 
(531,155
)
 
$
977,000

 
$
1,023,267
v3.19.3.a.u2
Goodwill And Other Intangible Assets (Tables)
 12 Months Ended
Dec. 29, 2019
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of Goodwill

Goodwill activity for 2019 and 2018 was as follows:
 
Year End
 
December 29, 2019
 
December 30, 2018
Balance at beginning of year:
 
 
 
Goodwill, gross
$
757,281

 
$
752,731

Accumulated impairment losses (a)
(9,397
)
 
(9,397
)
Goodwill, net
747,884

 
743,334

Changes in goodwill:
 
 
 
Restaurant acquisitions (b)
6,931

 
7,038

Restaurant dispositions
—

 
(208
)
Currency translation adjustment
1,096

 
(2,280
)
Balance at end of year:


 


Goodwill, gross
765,308

 
757,281

Accumulated impairment losses (a)
(9,397
)
 
(9,397
)
Goodwill, net
$
755,911

 
$
747,884


_______________

(a)
Accumulated impairment losses resulted from the full impairment of goodwill of the Wendy’s international franchise restaurants during the fourth quarter of 2013.

(b)
2019 includes an adjustment to the fair value of net assets acquired in connection with the acquisition of franchised restaurants during 2018. See Note 4 for further information.
Schedule of Goodwill, Segment Allocation
The following table sets forth the reallocation of goodwill to the Company’s segments as of December 29, 2019:
 
Wendy’s U.S.
 
Wendy’s International
 
Global Real Estate & Development
 
Total
Goodwill
$
602,491

 
$
30,872

 
$
122,548

 
$
755,911
Schedule Of Finite Lived And Indefinite Lived Intangible Assets
The following is a summary of the components of other intangible assets and the related amortization expense:
 
Year End
 
December 29, 2019
 
December 30, 2018
 
Cost
 
Accumulated Amortization
 
Net
 
Cost
 
Accumulated Amortization
 
Net
Indefinite-lived:
 
 
 
 
 
 
 
 
 
 
 
Trademarks
$
903,000

 
$
—

 
$
903,000

 
$
903,000

 
$
—

 
$
903,000

Definite-lived:
 
 
 
 
 
 
 
 
 
 
 
Franchise agreements
348,825

 
(187,063
)
 
161,762

 
348,200

 
(170,134
)
 
178,066

Favorable leases
166,098

 
(47,695
)
 
118,403

 
233,990

 
(79,776
)
 
154,214

Reacquired rights under franchise agreements
10,172

 
(2,766
)
 
7,406

 
11,807

 
(1,971
)
 
9,836

Software
181,666

 
(125,025
)
 
56,641

 
154,919

 
(105,882
)
 
49,037

 
$
1,609,761

 
$
(362,549
)
 
$
1,247,212

 
$
1,651,916

 
$
(357,763
)
 
$
1,294,153
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense
Aggregate amortization expense:
 
Actual for fiscal year:
 
2017
$
47,302

2018
52,064

2019
53,182

Estimate for fiscal year:
 
2020
$
46,666

2021
41,362

2022
37,048

2023
33,854

2024
29,383

Thereafter
155,899
v3.19.3.a.u2
Accrued Expenses and Other Current Liabilities (Tables)
 12 Months Ended
Dec. 29, 2019
Accrued Liabilities [Abstract]  
Schedule of Accrued Liabilities
 
Year End
 
December 29, 2019
 
December 30, 2018
Legal reserves (a)
$
52,272

 
$
55,883

Accrued compensation and related benefits
56,010

 
37,637

Accrued taxes
23,926

 
20,811

Other
33,064

 
36,305

 
$
165,272

 
$
150,636


_______________

(a)
Includes a legal reserve of $50,000 as of December 29, 2019 and December 30, 2018 for a settlement of the FI Case. See Note 23 for further information. The Company maintains insurance coverage for legal settlements, receivables for which are included in “Accounts and notes receivable, net.” See Note 7 for further information.

After exhaustion of applicable insurance receivables of $25,350, the Company made a payment of $24,650 for the settlement of the FI Case in January 2020.
v3.19.3.a.u2
Long-Term Debt (Tables)
 12 Months Ended
Dec. 29, 2019
Debt Disclosure [Abstract]  
Long-term debt

Long-term debt consisted of the following:
 
Year End
 
December 29,
2019
 
December 30,
2018
Series 2019-1 Class A-2 Notes:
 
 
 
3.783% Series 2019-1 Class A-2-I Notes, anticipated repayment date 2026
$
398,000

 
$
—

4.080% Series 2019-1 Class A-2-II Notes, anticipated repayment date 2029
447,750

 
—

Series 2018-1 Class A-2 Notes:
 
 
 
3.573% Series 2018-1 Class A-2-I Notes, anticipated repayment date 2025
441,000

 
445,500

3.884% Series 2018-1 Class A-2-II Notes, anticipated repayment date 2028
465,500

 
470,250

Series 2015-1 Class A-2 Notes:
 
 
 
4.080% Series 2015-1 Class A-2-II Notes, repaid in connection with June 2019 refinancing
—

 
870,750

4.497% Series 2015-1 Class A-2-III Notes, anticipated repayment date 2025
478,750

 
483,750

7% debentures, due in 2025
82,837

 
90,769

Unamortized debt issuance costs
(33,526
)
 
(32,217
)
 
2,280,311

 
2,328,802

Less amounts payable within one year
(22,750
)
 
(23,250
)
Total long-term debt
$
2,257,561

 
$
2,305,552
Aggregate maturities of long-term debt
Aggregate annual maturities of long-term debt, excluding the effect of purchase accounting adjustments, as of December 29, 2019 were as follows:
Fiscal Year
 
2020
$
22,750

2021
22,750

2022
22,750

2023
22,750

2024
22,750

Thereafter
2,207,250

 
$
2,321,000
Pledged Assets
The following is a summary of the Company’s assets pledged as collateral for certain debt:
 
Year End
 
December 29,
2019
Cash and cash equivalents
$
33,042

Restricted cash and other assets (including long-term)
34,214

Accounts and notes receivable, net
31,879

Inventories
3,859

Properties
67,550

Other intangible assets
1,061,605

 
$
1,232,149
v3.19.3.a.u2
Fair Value Measurements (Tables)
 12 Months Ended
Dec. 29, 2019
Fair Value Disclosures [Abstract]  
Fair Value, by Balance Sheet Grouping
The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments:
 
December 29, 2019
 
December 30, 2018
 
 
 
Carrying
Amount
 
Fair
Value
 
Carrying
Amount
 
Fair
Value
 
Fair Value
Measurements
Financial assets
 
 
 
 
 
 
 
 
 
Cash equivalents
$
114,992

 
$
114,992

 
$
222,228

 
$
222,228

 
Level 1
Other investments in equity securities (a)
639

 
1,649

 
639

 
2,181

 
Level 3
 
 
 
 
 
 
 
 
 
 
Financial liabilities
 
 
 
 
 
 
 
 
 
Series 2019-1 Class A-2-I Notes (b)
398,000

 
405,152

 
—

 
—

 
Level 2
Series 2019-1 Class A-2-II Notes (b)
447,750

 
459,136

 
—

 
—

 
Level 2
Series 2018-1 Class A-2-I Notes (b)
441,000

 
444,859

 
445,500

 
424,026

 
Level 2
Series 2018-1 Class A-2-II Notes (b)
465,500

 
475,718

 
470,250

 
439,353

 
Level 2
Series 2015-1 Class A-2-II Notes (b)
—

 
—

 
870,750

 
865,342

 
Level 2
Series 2015-1 Class A-2-III Notes (b)
478,750

 
490,531

 
483,750

 
482,522

 
Level 2
7% debentures, due in 2025 (b)
82,837

 
94,838

 
90,769

 
102,750

 
Level 2
Guarantees of franchisee loan obligations (c)
1

 
1

 
17

 
17

 
Level 3
_______________

(a)
The fair values of our investments are not significant and are based on our review of information provided by the investment managers or investees which was based on (1) valuations performed by the investment managers or investees, (2) quoted market or broker/dealer prices for similar investments and (3) quoted market or broker/dealer prices adjusted by the investment managers for legal or contractual restrictions, risk of nonperformance or lack of marketability, depending upon the underlying investments.

(b)
The fair values were based on quoted market prices in markets that are not considered active markets.

(c)
Wendy’s has provided loan guarantees to various lenders on behalf of franchisees entering into debt arrangements for equipment financing. We have accrued a liability for the fair value of these guarantees, the calculation of which was based upon a weighted average risk percentage.
Fair value of assets and liabilities (other than cash and cash equivalents) measure at fair value on a nonrecurring basis
 
 
 
Fair Value Measurements
 
2019 Total Losses
 
December 29,
2019
 
Level 1
 
Level 2
 
Level 3
 
Held and used
$
3,582

 
$
—

 
$
—

 
$
3,582

 
$
5,602

Held for sale
988

 
—

 
—

 
988

 
1,397

Total
$
4,570

 
$
—

 
$
—

 
$
4,570

 
$
6,999

    
 
 
 
Fair Value Measurements
 
2018 Total Losses
 
December 30,
2018
 
Level 1
 
Level 2
 
Level 3
 
Held and used
$
462

 
$
—

 
$
—

 
$
462

 
$
4,343

Held for sale
1,031

 
—

 
—

 
1,031

 
354

Total
$
1,493

 
$
—

 
$
—

 
$
1,493

 
$
4,697
v3.19.3.a.u2
Income Taxes (Tables)
 12 Months Ended
Dec. 29, 2019
Income Tax Disclosure [Abstract]  
Schedule of Income before Income Tax, Domestic and Foreign

Income before income taxes is set forth below:
 
Year Ended
 
2019
 
2018
 
2017
Domestic
$
160,474

 
$
560,776

 
$
86,892

Foreign (a)
11,007

 
14,140

 
14,127

 
$
171,481

 
$
574,916

 
$
101,019


_______________

(a)
Excludes foreign income of domestic subsidiaries.
Schedule of Components of Income Tax (Expense) Benefit
The (provision for) benefit from income taxes is set forth below:
 
Year Ended
 
2019
 
2018
 
2017
Current:
 
 
 
 
 
U.S. federal
$
(18,421
)
 
$
(109,078
)
 
$
(13,092
)
State
(6,093
)
 
(2,661
)
 
(4,055
)
Foreign
(9,190
)
 
(9,630
)
 
(9,173
)
Current tax provision
(33,704
)
 
(121,369
)
 
(26,320
)
Deferred:
 
 
 
 
 
U.S. federal
1,585

 
5,071

 
127,592

State
(2,449
)
 
441

 
(7,729
)
Foreign
27

 
1,056

 
(533
)
Deferred tax (provision) benefit
(837
)
 
6,568

 
119,330

Income tax (provision) benefit
$
(34,541
)
 
$
(114,801
)
 
$
93,010
Schedule of Deferred Tax Assets and Liabilities
Deferred tax assets (liabilities) are set forth below:
 
Year End
 
December 29, 2019
 
December 30, 2018
Deferred tax assets:
 
 
 
Operating and finance lease liabilities
$
345,173

 
115,322

Net operating loss and credit carryforwards
59,597

 
59,690

Unfavorable leases
26,020

 
35,801

Deferred revenue
23,907

 
23,904

Accrued compensation and related benefits
18,477

 
14,804

Accrued expenses and reserves
13,786

 
14,840

Deferred rent
492

 
16,807

Other
3,757

 
5,016

Valuation allowances
(45,183
)
 
(42,175
)
Total deferred tax assets
446,026

 
244,009

Deferred tax liabilities:
 
 
 
Operating and finance lease assets (a)
(313,803
)
 
(56,798
)
Intangible assets
(311,596
)
 
(324,394
)
Fixed assets (a)
(60,788
)
 
(105,545
)
Other
(30,598
)
 
(26,432
)
Total deferred tax liabilities
(716,785
)
 
(513,169
)
 
$
(270,759
)
 
$
(269,160
)

_______________

(a)
The Company’s adoption of the lease accounting standard in 2019 caused additional deferred taxes to be recorded as a result of the ROU assets and lease liabilities recorded on the consolidated balance sheet. Additionally, the deferred taxes existing at December 30, 2018 related to finance leases have been reclassified from fixed assets to finance lease liabilities and finance lease assets, consistent with the reclassifications made on the consolidated balance sheet upon adoption. See “New Accounting Standards Adopted” in Note 1 for further information regarding the adoption of the lease accounting standard.
Summary of Net Operating Loss and Tax Credit Carryforwards
The amounts and expiration dates of net operating loss and tax credit carryforwards are as follows:
 
Amount
 
Expiration
Tax credit carryforwards:
 
 
 
U.S. federal foreign tax credits
$
10,429

 
2022-2030
State tax credits
563

 
2020-2023
Foreign tax credits of non-U.S. subsidiaries
3,992

 
Not applicable
Total
$
14,984

 
 
 
 
 
 
Net operating loss carryforwards:
 
 
 
State and local net operating loss carryforwards
$
1,161,051

 
2020-2035
Foreign net operating loss carryforwards
225

 
2023-2027
Total
$
1,161,276

 
 
Schedule of Effective Income Tax Rate Reconciliation
The reconciliation of income tax computed at the U.S. federal statutory rate of 21% for 2019 and 2018 and 35% for 2017 to reported income tax is set forth below:
 
Year Ended
 
2019
 
2018 (a)
 
2017 (a)
Income tax provision at the U.S. federal statutory rate
$
(36,011
)
 
$
(120,732
)
 
$
(35,357
)
State income tax provision, net of U.S. federal income tax effect
(6,470
)
 
(221
)
 
(6,451
)
Federal rate change
—

 
—

 
164,893

Prior years’ tax matters (b)
6,135

 
(9,970
)
 
15,964

Excess federal tax benefits from share-based compensation
5,841

 
10,250

 
5,196

Domestic tax planning initiatives
—

 
—

 
4,282

Foreign and U.S. tax effects of foreign operations
250

 
(856
)
 
2,408

Valuation allowances
(2,833
)
 
5,120

 
(35,895
)
Non-deductible goodwill (c)
—

 
(41
)
 
(15,458
)
Transition tax
—

 
—

 
(4,446
)
Unrepatriated earnings
(402
)
 
(326
)
 
(1,801
)
Non-deductible expenses and other
(1,051
)
 
1,975

 
(325
)
 
$
(34,541
)
 
$
(114,801
)
 
$
93,010

_______________

(a)
2018 includes the following impacts associated with the Tax Act: (1) a net expense of $2,426 related to the impact of the corporate rate reduction on our net deferred tax liabilities, (2) a net expense of $991 related to the limitations on the deductibility of certain executive compensation, (3) a net expense of $28 of state income tax and (4) a net benefit of $1,286 related to foreign tax credits. 2017 includes the following impacts associated with the Tax Act: (1) the revaluation of our U.S. net deferred tax liability at 21%, resulting in a benefit of $164,893, (2) a full valuation allowance of $15,962 on our U.S. foreign tax credit carryforwards due to the decrease in the U.S. federal tax rate, (3) a one-time transition tax of $4,446, (4) deferred tax on unrepatriated earnings of $1,801 and (5) other net expenses of $2,305.

(b)
2019 primarily relates to a reduction in unrecognized tax benefits due to a lapse of statute of limitations. 2018 includes expense of $9,542 related to the Tax Act, which was partially offset by a $7,535 benefit reported in “Valuation allowances.”
2017 primarily relates to certain state net operating loss carryforwards, previously considered worthless, that existed at the beginning of the year. The Company changed its judgment during 2017 regarding the likelihood of the utilization of these carryforwards. Because of this change, the Company recognized a deferred tax asset of $16,643, net of federal benefit, which was partially offset by an expense reported in “Valuation allowances” of $13,667.

(c)
Substantially all of the goodwill included in the net gain (loss) on sales of restaurants in 2018 and 2017 under our system optimization initiative was non-deductible for tax purposes. See Note 3 for further information.
Schedule of Unrecognized Tax Benefits Roll Forward
As of December 29, 2019, the Company had unrecognized tax benefits of $22,323, which, if resolved favorably would reduce income tax expense by $17,987. A reconciliation of the beginning and ending amount of unrecognized tax benefits follows:
 
Year End
 
December 29,
2019
 
December 30,
2018
 
December 31,
2017
Beginning balance
$
27,632

 
$
28,848

 
$
19,545

Additions:
 
 
 
 
 
Tax positions of current year
1,356

 
3,874

 
8,251

Tax positions of prior years
—

 
2,598

 
1,704

Reductions:
 
 
 
 
 
Tax positions of prior years
(227
)
 
(7,553
)
 
(295
)
Settlements
—

 
(21
)
 
(34
)
Lapse of statute of limitations
(6,438
)
 
(114
)
 
(323
)
Ending balance
$
22,323

 
$
27,632

 
$
28,848
v3.19.3.a.u2
Stockholders' Equity (Tables)
 12 Months Ended
Dec. 29, 2019
Stockholders' Equity Note [Abstract]  
Schedule of Treasury Stock
There were 470,424 shares of common stock issued at the beginning and end of 2019, 2018 and 2017. Treasury stock activity for 2019, 2018 and 2017 was as follows:
 
Treasury Stock
 
2019
 
2018
 
2017
Number of shares at beginning of year
239,191

 
229,912

 
223,850

Repurchases of common stock
10,158

 
15,808

 
8,607

Common shares issued:
 
 
 
 
 
Stock options, net
(2,912
)
 
(5,824
)
 
(1,853
)
Restricted stock, net
(834
)
 
(627
)
 
(612
)
Director fees
(14
)
 
(15
)
 
(15
)
Other
(54
)
 
(63
)
 
(65
)
Number of shares at end of year
245,535

 
239,191

 
229,912
Schedule of Accumulated Other Comprehensive Income (Loss)
The following table provides a rollforward of the components of accumulated other comprehensive income (loss), net of tax as applicable:
 
Foreign Currency Translation
 
Cash Flow Hedges (a)
 
Pension (b)
 
Total
Balance at January 1, 2017
$
(60,299
)
 
$
(1,797
)
 
$
(1,145
)
 
$
(63,241
)
Current-period other comprehensive income
15,150

 
1,797

 
96

 
17,043

Balance at December 31, 2017
(45,149
)
 
—

 
(1,049
)
 
(46,198
)
Current-period other comprehensive (loss) income
(16,524
)
 
—

 
1,049

 
(15,475
)
Balance at December 30, 2018
(61,673
)
 
—

 
—

 
(61,673
)
Current-period other comprehensive income
7,845

 
—

 
—

 
7,845

Balance at December 29, 2019
$
(53,828
)
 
$
—

 
$
—

 
$
(53,828
)

_______________

(a)
During 2015, the Company terminated seven forward-starting interest rate swaps designated as cash flow hedges, which had an original maturity date of December 31, 2017. As a result, current-period other comprehensive income for 2017 includes the reclassification of unrealized losses on cash flow hedges of $1,797 from “Accumulated other comprehensive loss” to our consolidated statement of operations consisting of $2,894 recorded to “Interest expense, net,” net of the related income tax benefit of $1,097 recorded to “(Provision for) benefit from income taxes.”

(b) During 2018, the Company terminated two frozen defined benefit plans. See Note 19 for further information.
v3.19.3.a.u2
Share-Based Compensation (Tables)
 12 Months Ended
Dec. 29, 2019
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Schedule of Share-based Compensation, Stock Options, Activity
The following table summarizes stock option activity during 2019:
 
Number of Options
 
Weighted
Average
Exercise
Price
 
Weighted
Average
Remaining
Contractual
Life in Years
 
Aggregate
Intrinsic
Value
Outstanding at December 30, 2018
12,677

 
$
11.86

 
 
 
 
Granted
2,622

 
19.71

 
 
 
 
Exercised
(2,934
)
 
9.75

 
 
 
 
Forfeited and/or expired
(428
)
 
16.77

 
 
 
 
Outstanding at December 29, 2019
11,937

 
$
13.92

 
6.77
 
$
98,316

Vested or expected to vest at December 29, 2019
11,814

 
$
13.87

 
6.75
 
$
97,896

Exercisable at December 29, 2019
7,482

 
$
11.05

 
5.44
 
$
83,113
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology
The weighted average grant date fair value of stock options was determined using the following assumptions:
 
2019
 
2018
 
2017
Risk-free interest rate
1.57
%
 
2.77
%
 
1.94
%
Expected option life in years
4.50

 
5.62

 
5.62

Expected volatility
23.55
%
 
24.27
%
 
23.88
%
Expected dividend yield
2.03
%
 
1.84
%
 
1.82
%
Schedule of Nonvested Restricted Stock Units Activity
The following table summarizes activity of Restricted Shares during 2019:
 
Number of Restricted Shares
 
Weighted
Average
Grant Date Fair Value
Non-vested at December 30, 2018
1,321

 
$
13.65

Granted
358

 
19.51

Vested
(521
)
 
11.45

Forfeited
(87
)
 
15.78

Non-vested at December 29, 2019
1,071

 
$
16.46
Schedule of Share-based Payment Award, Performance Share Awards, Valuation Assumptions
The input variables are noted in the table below:
 
2019
 
2018
 
2017
Risk-free interest rate
2.51
%
 
2.38
%
 
1.44
%
Expected life in years
3.00

 
3.00

 
3.00

Expected volatility
23.19
%
 
24.97
%
 
25.06
%
Expected dividend yield (a)
0.00
%
 
0.00
%
 
0.00
%
_______________

(a)
The Monte Carlo method assumes a reinvestment of dividends.
Schedule of Nonvested Performance-based Units Activity
The following table summarizes activity of performance shares at Target during 2019:
 
Performance Condition Awards
 
Market Condition Awards
 
Shares
 
Weighted
Average
Grant Date Fair Value
 
Shares
 
Weighted
Average
Grant Date Fair Value
Non-vested at December 30, 2018
598

 
$
12.32

 
518

 
$
14.22

Granted
155

 
17.85

 
130

 
21.36

Dividend equivalent units issued (a)
10

 
—

 
8

 
—

Vested (b)
(278
)
 
9.44

 
(256
)
 
10.25

Forfeited
(46
)
 
16.13

 
(38
)
 
19.56

Non-vested at December 29, 2019
439

 
$
15.75

 
362

 
$
19.09

_______________

(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 and market condition awards exclude the vesting of an additional 169 and 157 shares, respectively, which resulted from the performance of the awards exceeding Target.
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs
Total share-based compensation and the related income tax benefit recognized in the Company’s consolidated statements of operations were as follows:
 
Year Ended
 
2019
 
2018
 
2017
Stock options
$
7,685

 
$
7,172

 
$
6,923

Restricted shares (a)
5,762

 
6,030

 
5,778

Performance shares:
 
 
 
 
 
Performance condition awards
2,195

 
1,491

 
1,764

Market condition awards
2,023

 
1,987

 
1,533

Modifications, net
1,011

 
1,238

 
4,930

Share-based compensation
18,676

 
17,918

 
20,928

Less: Income tax benefit
(2,990
)
 
(3,418
)
 
(4,985
)
Share-based compensation, net of income tax benefit
$
15,686

 
$
14,500

 
$
15,943

_______________

(a)
2019, 2018 and 2017 include $396, $319 and $197, respectively, related to retention awards in connection with the Company’s G&A realignment plan, which is included in “Reorganization and realignment costs.” See Note 5 for further information.
v3.19.3.a.u2
Impairment of Long-Lived Assets (Tables)
 12 Months Ended
Dec. 29, 2019
Asset Impairment Charges [Abstract]  
Impairment of Long-Lived Assets
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:”
 
 
Year Ended
 
 
2019
 
2018
 
2017
Restaurants leased or subleased to franchisees
 
$
5,308

 
$
283

 
$
244

Company-operated restaurants
 
294

 
4,060

 
3,169

Surplus properties
 
1,397

 
354

 
684

 
 
$
6,999

 
$
4,697

 
$
4,097
v3.19.3.a.u2
Investment Income, Net (Tables)
 12 Months Ended
Dec. 29, 2019
Investment Income, Net [Abstract]  
Investment Income
 
Year Ended
 
2019
 
2018
 
2017
Gain on sale of investments, net (a) (b)
$
24,496

 
$
450,000

 
$
2,570

Other than temporary loss on other investments in equity securities
—

 
—

 
(258
)
Other, net
1,102

 
736

 
391

 
$
25,598

 
$
450,736

 
$
2,703

_______________

(a)
In October 2019, the Company received a $25,000 cash settlement related to a previously held investment. As a result, the Company recorded $24,366 to “Investment income, net” and $634 to “General and administrative” for the reimbursement of related costs.

(b)
During 2018, the Company sold its remaining ownership interest in Inspire Brands for $450,000. See Note 8 for further information.
v3.19.3.a.u2
Leases (Tables)
 12 Months Ended
Dec. 29, 2019
Dec. 30, 2018
Leases [Abstract]    
Lease, Cost
The components of lease cost for 2019 are as follows:
 
Year Ended
 
2019
Finance lease cost:
 
Amortization of finance lease assets
$
11,241

Interest on finance lease liabilities
37,012

 
48,253

Operating lease cost
90,537

Variable lease cost (a)
58,978

Short-term lease cost
4,717

Total operating lease cost (b)
154,232

Total lease cost
$
202,485

_______________

(a)
Includes expenses for executory costs of $37,758, for which the Company is reimbursed by sublessees.

(b)
Includes $123,899 recorded to “Franchise rental expense” for leased properties that are subsequently leased to franchisees and $27,419 recorded to “Cost of sales” for leases for Company-operated restaurants.
  
Schedule of Rent Expense  
The components of rental expense for operating leases for 2018 and 2017, as accounted for under previous guidance, were as follows:
 
Year Ended
 
2018
 
2017
Rental expense:
 
 
 
Minimum rentals
$
95,749

 
$
90,889

Contingent rentals
18,971

 
19,021

Total rental expense (a)
$
114,720

 
$
109,910

_______________

(a)
Amounts include rental expense related to (1) leases for Company-operated restaurants recorded to “Cost of sales,” (2) leased properties that are subsequently leased to franchisees recorded to “Franchise rental expense” and (3) leases for corporate offices and equipment recorded to “General and administrative.”
Schedule of Supplemental Cash Flow and Non-cash Information Related to Leases
The following table includes supplemental cash flow and non-cash information related to leases:
 
Year Ended
 
2019
Cash paid for amounts included in the measurement of lease liabilities:
 
Operating cash flows from finance leases
$
39,887

Operating cash flows from operating leases
91,824

Financing cash flows from finance leases
6,835

Right-of-use assets obtained in exchange for lease obligations:
 
Finance lease liabilities
50,061

Operating lease liabilities
15,411



  
Schedule of Supplemental Information Related to Leases
The following table includes supplemental information related to leases:
 
Year End
 
December 29, 2019
Weighted-average remaining lease term (years):
 
Finance leases
17.1

Operating leases
15.4

 
 
Weighted average discount rate:
 
Finance leases
9.87
%
Operating leases
5.09
%
 
 
Supplemental balance sheet information:
 
Finance lease assets, gross
$
242,889

Accumulated amortization
(42,745
)
Finance lease assets
200,144

Operating lease assets
857,199


  
Finance Lease, Liability, Maturity
The following table illustrates the Company’s future minimum rental payments for non-cancelable leases as of December 29, 2019:
 
Finance
Leases
 
Operating
Leases
Fiscal Year
Company-Operated
 
Franchise
and Other
 
Company-Operated
 
Franchise
and Other
2020
$
3,088

 
$
47,041

 
$
19,971

 
$
70,301

2021
3,220

 
46,932

 
19,783

 
70,272

2022
3,270

 
48,079

 
19,473

 
70,176

2023
3,223

 
49,709

 
19,439

 
70,026

2024
3,316

 
50,069

 
19,385

 
69,901

Thereafter
40,096

 
664,005

 
183,460

 
755,026

Total minimum payments
$
56,213

 
$
905,835

 
$
281,511

 
$
1,105,702

Less interest
(24,543
)
 
(445,653
)
 
(86,422
)
 
(359,279
)
Present value of minimum lease payments (a) (b)
$
31,670

 
$
460,182

 
$
195,089

 
$
746,423

_______________

(a)
The present value of minimum finance lease payments of $11,005 and $480,847 are included in “Current portion of finance lease liabilities” and “Long-term finance lease liabilities,” respectively.

(b)
The present value of minimum operating lease payments of $43,775 and $897,737 are included in “Current portion of operating lease liabilities” and “Long-term operating lease liabilities,” respectively.
  
Lessee, Operating Lease, Liability, Maturity
The following table illustrates the Company’s future minimum rental payments for non-cancelable leases as of December 29, 2019:
 
Finance
Leases
 
Operating
Leases
Fiscal Year
Company-Operated
 
Franchise
and Other
 
Company-Operated
 
Franchise
and Other
2020
$
3,088

 
$
47,041

 
$
19,971

 
$
70,301

2021
3,220

 
46,932

 
19,783

 
70,272

2022
3,270

 
48,079

 
19,473

 
70,176

2023
3,223

 
49,709

 
19,439

 
70,026

2024
3,316

 
50,069

 
19,385

 
69,901

Thereafter
40,096

 
664,005

 
183,460

 
755,026

Total minimum payments
$
56,213

 
$
905,835

 
$
281,511

 
$
1,105,702

Less interest
(24,543
)
 
(445,653
)
 
(86,422
)
 
(359,279
)
Present value of minimum lease payments (a) (b)
$
31,670

 
$
460,182

 
$
195,089

 
$
746,423

_______________

(a)
The present value of minimum finance lease payments of $11,005 and $480,847 are included in “Current portion of finance lease liabilities” and “Long-term finance lease liabilities,” respectively.

(b)
The present value of minimum operating lease payments of $43,775 and $897,737 are included in “Current portion of operating lease liabilities” and “Long-term operating lease liabilities,” respectively.
  
Capital Lease, Liability, Maturity  

The following table illustrates the Company’s future minimum rental payments for non-cancelable leases as of December 30, 2018:
 
Finance
Leases
 
Operating
Leases
Fiscal Year
Company-Operated
 
Franchise
and Other
 
Company-Operated
 
Franchise
and Other
2019
$
1,962

 
$
45,125

 
$
20,174

 
$
75,703

2020
1,978

 
43,969

 
20,052

 
73,320

2021
2,082

 
45,522

 
19,820

 
73,167

2022
2,114

 
46,573

 
19,530

 
73,300

2023
2,084

 
48,109

 
19,430

 
73,377

Thereafter
23,558

 
676,139

 
203,073

 
854,964

Total minimum payments
$
33,778

 
$
905,437

 
$
302,079

 
$
1,223,831

Less interest
(16,874
)
 
(466,705
)
 
 
 
 
Present value of minimum lease payments (a)
$
16,904

 
$
438,732

 
 
 
 
_______________

(a)
The present value of minimum finance lease payments of $8,405 and $447,231 are included in “Current portion of finance lease liabilities” and “Long-term finance lease liabilities,” respectively.
Lessee, Operating Lease, Liability, Maturity  

The following table illustrates the Company’s future minimum rental payments for non-cancelable leases as of December 30, 2018:
 
Finance
Leases
 
Operating
Leases
Fiscal Year
Company-Operated
 
Franchise
and Other
 
Company-Operated
 
Franchise
and Other
2019
$
1,962

 
$
45,125

 
$
20,174

 
$
75,703

2020
1,978

 
43,969

 
20,052

 
73,320

2021
2,082

 
45,522

 
19,820

 
73,167

2022
2,114

 
46,573

 
19,530

 
73,300

2023
2,084

 
48,109

 
19,430

 
73,377

Thereafter
23,558

 
676,139

 
203,073

 
854,964

Total minimum payments
$
33,778

 
$
905,437

 
$
302,079

 
$
1,223,831

Less interest
(16,874
)
 
(466,705
)
 
 
 
 
Present value of minimum lease payments (a)
$
16,904

 
$
438,732

 
 
 
 
_______________

(a)
The present value of minimum finance lease payments of $8,405 and $447,231 are included in “Current portion of finance lease liabilities” and “Long-term finance lease liabilities,” respectively.
Sales-type Lease, Lease Income
The components of lease income for 2019 are as follows:
 
Year Ended
 
2019
Sales-type and direct-financing leases:
 
Selling profit
$
2,285

Interest income (a)
26,333

 
 
Operating lease income
176,629

Variable lease income
56,436

Franchise rental income (b)
$
233,065

_______________

(a)
Included in “Interest expense, net.”

(b)
Includes sublease income of $171,126 recognized during 2019, of which $37,739 represents lessees’ variable payments to the Company for executory costs.
  
Direct Financing Lease, Lease Income
The components of lease income for 2019 are as follows:
 
Year Ended
 
2019
Sales-type and direct-financing leases:
 
Selling profit
$
2,285

Interest income (a)
26,333

 
 
Operating lease income
176,629

Variable lease income
56,436

Franchise rental income (b)
$
233,065

_______________

(a)
Included in “Interest expense, net.”

(b)
Includes sublease income of $171,126 recognized during 2019, of which $37,739 represents lessees’ variable payments to the Company for executory costs.
  
Operating Lease, Lease Income
The components of lease income for 2019 are as follows:
 
Year Ended
 
2019
Sales-type and direct-financing leases:
 
Selling profit
$
2,285

Interest income (a)
26,333

 
 
Operating lease income
176,629

Variable lease income
56,436

Franchise rental income (b)
$
233,065

_______________

(a)
Included in “Interest expense, net.”

(b)
Includes sublease income of $171,126 recognized during 2019, of which $37,739 represents lessees’ variable payments to the Company for executory costs.
  
Schedule of Rent Income  
The components of rental income for operating leases and subleases for 2018 and 2017, as accounted for under previous guidance, were as follows:
 
Year Ended
 
2018
 
2017
Rental income:
 
 
 
Minimum rentals
$
184,154

 
$
169,857

Contingent rentals
19,143

 
20,246

Total rental income (a)
$
203,297

 
$
190,103

_______________

(a)
Amounts include sublease income of $138,363 and $126,814 recognized during 2018 and 2017, respectively.
Sales-type and Direct Financing Leases, Lease Receivable, Maturity
The following table illustrates the Company’s future minimum rental receipts for non-cancelable leases and subleases as of December 29, 2019:
 
Sales-Type and
Direct Financing Leases
 
Operating
Leases
Fiscal Year
Subleases
 
Owned Properties
 
Subleases
 
Owned Properties
2020
$
28,948

 
$
2,036

 
$
110,212

 
$
52,927

2021
30,066

 
2,068

 
111,232

 
54,716

2022
30,741

 
2,148

 
112,198

 
56,189

2023
31,780

 
2,192

 
113,064

 
56,394

2024
32,081

 
2,200

 
113,123

 
57,497

Thereafter
461,553

 
24,915

 
1,223,729

 
804,606

Total future minimum receipts
615,169

 
35,559

 
$
1,783,558

 
$
1,082,329

Unearned interest income
(371,918
)
 
(19,058
)
 
 
 
 
Net investment in sales-type and direct financing leases (a)
$
243,251

 
$
16,501

 
 
 
 
_______________

(a)
The present value of minimum direct financing rental receipts of $3,146 and $256,606 are included in “Accounts and notes receivable, net” and “Net investment in sales-type and direct financing leases,” respectively. The present value of minimum direct financing rental receipts includes a net investment in unguaranteed residual assets of $197.
  
Lessor, Operating Lease, Payments to be Received, Maturity
The following table illustrates the Company’s future minimum rental receipts for non-cancelable leases and subleases as of December 29, 2019:
 
Sales-Type and
Direct Financing Leases
 
Operating
Leases
Fiscal Year
Subleases
 
Owned Properties
 
Subleases
 
Owned Properties
2020
$
28,948

 
$
2,036

 
$
110,212

 
$
52,927

2021
30,066

 
2,068

 
111,232

 
54,716

2022
30,741

 
2,148

 
112,198

 
56,189

2023
31,780

 
2,192

 
113,064

 
56,394

2024
32,081

 
2,200

 
113,123

 
57,497

Thereafter
461,553

 
24,915

 
1,223,729

 
804,606

Total future minimum receipts
615,169

 
35,559

 
$
1,783,558

 
$
1,082,329

Unearned interest income
(371,918
)
 
(19,058
)
 
 
 
 
Net investment in sales-type and direct financing leases (a)
$
243,251

 
$
16,501

 
 
 
 
_______________

(a)
The present value of minimum direct financing rental receipts of $3,146 and $256,606 are included in “Accounts and notes receivable, net” and “Net investment in sales-type and direct financing leases,” respectively. The present value of minimum direct financing rental receipts includes a net investment in unguaranteed residual assets of $197.
  
Direct Financing Leases, Lease Receivable, Maturity  
The following table illustrates the Company’s future minimum rental receipts for non-cancelable leases and subleases as of December 30, 2018:
 
Sales-Type and
Direct Financing Leases
 
Operating
Leases
Fiscal Year
Subleases
 
Owned Properties
 
Subleases
 
Owned Properties
2019
$
26,239

 
$
1,937

 
$
113,180

 
$
52,527

2020
26,859

 
2,006

 
113,578

 
53,066

2021
27,904

 
2,043

 
114,447

 
54,615

2022
28,563

 
2,119

 
115,552

 
56,092

2023
29,512

 
2,159

 
116,463

 
56,284

Thereafter
448,851

 
26,404

 
1,372,646

 
858,755

Total future minimum receipts
587,928

 
36,668

 
$
1,945,866

 
$
1,131,339

Unearned interest income
(377,046
)
 
(20,338
)
 
 
 
 
Net investment in sales-type and direct financing leases (a)
$
210,882

 
$
16,330

 
 
 
 
_______________

(a)
The present value of minimum direct financing rental receipts of $735 and $226,477 are included in “Accounts and notes receivable, net” and “Net investment in sales-type and direct financing leases,” respectively.
Lessor, Operating Lease, Lease Receivable, Maturity  
The following table illustrates the Company’s future minimum rental receipts for non-cancelable leases and subleases as of December 30, 2018:
 
Sales-Type and
Direct Financing Leases
 
Operating
Leases
Fiscal Year
Subleases
 
Owned Properties
 
Subleases
 
Owned Properties
2019
$
26,239

 
$
1,937

 
$
113,180

 
$
52,527

2020
26,859

 
2,006

 
113,578

 
53,066

2021
27,904

 
2,043

 
114,447

 
54,615

2022
28,563

 
2,119

 
115,552

 
56,092

2023
29,512

 
2,159

 
116,463

 
56,284

Thereafter
448,851

 
26,404

 
1,372,646

 
858,755

Total future minimum receipts
587,928

 
36,668

 
$
1,945,866

 
$
1,131,339

Unearned interest income
(377,046
)
 
(20,338
)
 
 
 
 
Net investment in sales-type and direct financing leases (a)
$
210,882

 
$
16,330

 
 
 
 
_______________

(a)
The present value of minimum direct financing rental receipts of $735 and $226,477 are included in “Accounts and notes receivable, net” and “Net investment in sales-type and direct financing leases,” respectively.
Schedule of Property Subject To Operating Lease
Properties owned by the Company and leased to franchisees and other third parties under operating leases include:
 
 
Year End
 
 
December 29, 2019
 
December 30, 2018
Land
 
$
281,792

 
$
272,234

Buildings and improvements
 
311,047

 
312,672

Restaurant equipment
 
1,727

 
2,443

 
 
594,566

 
587,349

Accumulated depreciation and amortization
 
(157,130
)
 
(143,313
)
 
 
$
437,436

 
$
444,036


  
v3.19.3.a.u2
Transactions with Related Parties (Tables)
 12 Months Ended
Dec. 29, 2019
Related Party Transactions [Abstract]  
Schedule of Related Party Transactions by Related Party

The following is a summary of transactions between the Company and its related parties:
 
Year Ended
 
2019
 
2018
 
2017
Transactions with QSCC:
 
 
 
 
 
Wendy’s Co-Op (a)
$
(504
)
 
$
(470
)
 
$
(987
)
Lease income (b)
(217
)
 
(215
)
 
(217
)
TimWen lease and management fee payments (c)
$
16,660

 
$
13,044

 
$
12,360

_______________

Transactions with QSCC

(a)
Wendy’s has a purchasing co-op relationship agreement (the “Wendy’s Co-op”) with its franchisees which establishes Quality Supply Chain Co-op, Inc. (“QSCC”). QSCC manages, for the Wendy’s system in the U.S. and Canada, contracts for the purchase and distribution of food, proprietary paper, operating supplies and equipment under national agreements with pricing based upon total system volume. 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. and Canada.

Wendy’s and its franchisees pay sourcing fees to third-party vendors on certain products sourced by QSCC. Such sourcing fees are remitted by these vendors to QSCC and are the primary means of funding QSCC’s operations. 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 $504, $470 and $987 in 2019, 2018 and 2017, respectively, which are included as a reduction of “Cost of sales.”

(b)
Pursuant to a lease agreement entered into on January 1, 2017, Wendy’s leased 14,333 square feet of office space to QSCC for an annual base rental of $215. The lease expires on December 31, 2020. In November 2018, the lease agreement was amended to increase the leased square footage to 14,493 and to increase the annual base rental to $217. The Company received $217, $215 and $217 of lease income from QSCC during 2019, 2018 and 2017, respectively, which has been recorded to “Franchise rental income.”

TimWen lease and management fee payments

(c)
A wholly-owned subsidiary of Wendy’s leases restaurant facilities from TimWen, which are then subleased to franchisees for the operation of Wendy’s/Tim Hortons combo units in Canada. Wendy’s paid TimWen $16,867, $13,256 and $12,572 under these lease agreements during 2019, 2018 and 2017, respectively. In addition, TimWen paid Wendy’s a management fee under the TimWen joint venture agreement of $207, $212 and $212 during 2019, 2018 and 2017, respectively, which has been included as a reduction to “General and administrative.”
v3.19.3.a.u2
Advertising Costs and Funds (Tables)
 12 Months Ended
Dec. 29, 2019
Restricted Assets and Liabilities  
Restricted Assets and Liabilities  
Schedule of Restricted Assets and Liabilities
Restricted assets and related liabilities of the Advertising Funds at December 29, 2019 and December 30, 2018 are as follows:
 
Year End
 
December 29, 2019
 
December 30, 2018
Cash and cash equivalents
$
23,973

 
$
25,247

Accounts receivable, net
54,394

 
47,332

Other assets
4,009

 
3,930

Advertising funds restricted assets
$
82,376

 
$
76,509

 
 
 
 
Accounts payable
$
66,749

 
$
62,033

Accrued expenses and other current liabilities
17,446

 
18,120

Advertising funds restricted liabilities
$
84,195

 
$
80,153
v3.19.3.a.u2
Geographic Information (Tables)
 12 Months Ended
Dec. 29, 2019
Segments, Geographical Areas [Abstract]  
Geographic Information

The table below presents revenues and properties information by geographic area:
 
U.S.
 
Canada
 
Other International
 
Total
2019
 
 
 
 
 
 
 
Revenues
$
1,606,619

 
$
80,903

 
$
21,480

 
$
1,709,002

Properties
941,607

 
35,283

 
110

 
977,000

 
 
 
 
 
 
 
 
2018
 
 
 
 
 
 
 
Revenues
$
1,495,639

 
$
74,626

 
$
19,671

 
$
1,589,936

Properties
990,992

 
32,155

 
120

 
1,023,267

 
 
 
 
 
 
 
 
2017
 
 
 
 
 
 
 
Revenues
$
1,154,873

 
$
50,431

 
$
18,104

 
$
1,223,408

Properties
1,032,151

 
30,586

 
132

 
1,062,869
v3.19.3.a.u2
Segment Information (Tables)
 12 Months Ended
Dec. 29, 2019
Segment Reporting [Abstract]  
Reconciliation of Revenue from Segments to Consolidated
Revenues by segment were as follows:
 
Year Ended
 
2019
 
2018
 
2017
Wendy’s U.S.
$
1,404,307

 
$
1,312,491

 
$
986,738

Wendy’s International
68,198

 
67,630

 
43,696

Global Real Estate & Development
236,497

 
209,815

 
192,974

Total revenues
$
1,709,002

 
$
1,589,936

 
$
1,223,408
Schedule of Segment Reporting Information, by Segment
The following table reconciles profit by segment to the Company’s consolidated income before income taxes:
 
Year Ended
 
2019
 
2018
 
2017
Wendy’s U.S.
$
369,193

 
$
355,455

 
$
369,432

Wendy’s International
20,246

 
25,597

 
23,833

Global Real Estate & Development
107,116

 
110,632

 
94,782

Total segment profit
$
496,555

 
$
491,684

 
$
488,047

Advertising funds surplus
1,337

 
4,153

 
—

Unallocated general and administrative (a)
(81,230
)
 
(104,208
)
 
(82,188
)
Depreciation and amortization
(131,693
)
 
(128,879
)
 
(125,687
)
System optimization gains (losses), net
1,283

 
463

 
(39,076
)
Reorganization and realignment costs
(16,965
)
 
(9,068
)
 
(22,574
)
Impairment of long-lived assets
(6,999
)
 
(4,697
)
 
(4,097
)
Unallocated other operating income, net
291

 
444

 
333

Interest expense, net
(115,971
)
 
(119,618
)
 
(118,059
)
Loss on early extinguishment of debt
(8,496
)
 
(11,475
)
 
—

Investment income, net
25,598

 
450,736

 
2,703

Other income, net
7,771

 
5,381

 
1,617

Income before income taxes
$
171,481

 
$
574,916

 
$
101,019

_______________

(a)
Includes corporate overhead costs, such as employee compensation and related benefits. 2018 also includes the impact of legal reserves for a settlement of the FI Case of $27,500.
Reconciliation of Other Significant Reconciling Items from Segments to Consolidated
Net income (loss) of our equity method investments for the Brazil JV and TimWen are included in segment profit for the Wendy’s International and Global Real Estate & Development segments, respectively. Net income (loss) of equity method investments by segment was as follows:
 
Year Ended
 
2019
 
2018
 
2017
Wendy’s International
$
(1,022
)
 
$
(1,344
)
 
$
(1,134
)
Global Real Estate & Development
9,695

 
9,420

 
8,707

Total net income of equity method investments
$
8,673

 
$
8,076

 
$
7,573
v3.19.3.a.u2
Quarterly Financial Information (Unaudited) (Tables)
 12 Months Ended
Dec. 29, 2019
Quarterly Financial Information Disclosure [Abstract]  
Schedule of Quarterly Financial Information (Unaudited)

The tables below set forth summary unaudited consolidated quarterly financial information for 2019 and 2018. The Company reports on a fiscal year typically consisting of 52 or 53 weeks ending on the Sunday closest to December 31. All of the Company’s fiscal quarters in 2019 and 2018 contained 13 weeks.
 
2019 Quarter Ended (a)
 
March 31
 
June 30
 
September 29
 
December 29
Revenues
$
408,583

 
$
435,348

 
$
437,880

 
$
427,191

Cost of sales
142,579

 
151,092

 
152,425

 
151,434

Operating profit
66,266

 
80,573

 
79,023

 
36,717

Net income
$
31,894

 
$
32,386

 
$
46,127

 
$
26,533

Basic income per share
$
.14

 
$
.14

 
$
.20

 
$
.12

Diluted income per share
$
.14

 
$
.14

 
$
.20

 
$
.11


 
2018 Quarter Ended (b)
 
April 1
 
July 1
 
September 30
 
December 30
Revenues
$
380,564

 
$
411,002

 
$
400,550

 
$
397,820

Cost of sales
132,219

 
138,154

 
139,348

 
138,867

Operating profit
55,262

 
71,483

 
77,348

 
45,799

Net income
$
20,159

 
$
29,876

 
$
391,249

 
$
18,831

Basic income per share
$
.08

 
$
.13

 
$
1.65

 
$
.08

Diluted income per share
$
.08

 
$
.12

 
$
1.60

 
$
.08

_______________

(a)
The Company’s consolidated statements of operations in fiscal 2019 were significantly impacted by investment income, net, franchise support and other costs, reorganization and realignment costs and loss on early extinguishment of debt. The pre-tax impact of investment income, net for the fourth quarter was $24,599 (see Note 8 for further information). The pre-tax impact of franchise support and other costs for the fourth quarter included approximately $16,400 to support U.S. franchisees in preparation for the launch of breakfast across the U.S. system on March 2, 2020. The pre-tax impact of reorganization and realignment costs for the fourth quarter was $12,194 (see Note 5 for further information). The pre-tax impact of loss on early extinguishment of debt for the second and fourth quarters was $7,150 and $1,346, respectively (see Note 12 for further information).
   
(b)
The Company’s consolidated statements of operations in fiscal 2018 were significantly impacted by investment income, net, reorganization and realignment costs, loss on early extinguishment of debt and legal reserves for the FI Case. The pre-tax impact of investment income, net for the third quarter was $450,133 and included the sale of our remaining ownership interest in Inspire Brands (see Note 8 for further information). The pre-tax impact of reorganization and realignment costs for the first, second, third and fourth quarters was $2,626, $3,124, $941 and $2,377, respectively (see Note 5 for further information). The pre-tax impact of loss on early extinguishment of debt for the first quarter was $11,475 (see Note 12 for further information). The pre-tax impact of legal reserves for the FI Case for the fourth quarter was $27,500 (see Note 23 for further information).
v3.19.3.a.u2
Summary of Significant Accounting Policies Corporate Structure (Details)
Dec. 29, 2019
countries
number_of_restaurants
Franchisor Disclosure  
Number of Restaurants 6,788
Entity Operated Units  
Franchisor Disclosure  
Number of Restaurants 357
Franchised Units  
Franchisor Disclosure  
Number of Restaurants 6,431
International  
Franchisor Disclosure  
Number of Countries Entity Operates | countries 30
International | Entity Operated Units  
Franchisor Disclosure  
Number of Restaurants 0
v3.19.3.a.u2
Summary of Significant Accounting Policies Cash Equivalents (Details)
$ in Thousands
Dec. 29, 2019
USD ($)
Accounting Policies [Abstract]  
Cash Equivalents, Insurance from Securities Investor Protection Corporation, Maximum per Account $ 500
v3.19.3.a.u2
Summary of Significant Accounting Policies Properties and Depreciation and Amortization (Details)
 12 Months Ended
Dec. 29, 2019
Office and restaurant equipment | Minimum  
Properties  
Property, Plant and Equipment, Useful Life 3 years
Office and restaurant equipment | Maximum  
Properties  
Property, Plant and Equipment, Useful Life 20 years
Transportation equipment | Minimum  
Properties  
Property, Plant and Equipment, Useful Life 3 years
Transportation equipment | Maximum  
Properties  
Property, Plant and Equipment, Useful Life 15 years
Buildings and improvements | Minimum  
Properties  
Property, Plant and Equipment, Useful Life 7 years
Buildings and improvements | Maximum  
Properties  
Property, Plant and Equipment, Useful Life 30 years
v3.19.3.a.u2
Summary of Significant Accounting Policies Other Intangible Assets and Deferred Financing Costs (Details)
 12 Months Ended
Dec. 29, 2019
Computer software | Minimum  
Finite-Lived Intangible Assets  
Finite-Lived Intangible Asset, Useful Life 1 year
Computer software | Maximum  
Finite-Lived Intangible Assets  
Finite-Lived Intangible Asset, Useful Life 5 years
Reacquired rights under franchise agreements | Minimum  
Finite-Lived Intangible Assets  
Finite-Lived Intangible Asset, Useful Life 4 years
Reacquired rights under franchise agreements | Maximum  
Finite-Lived Intangible Assets  
Finite-Lived Intangible Asset, Useful Life 20 years
Franchise agreements  
Finite-Lived Intangible Assets  
Finite-Lived Intangible Asset, Useful Life 20 years
v3.19.3.a.u2
Summary of Significant Accounting Policies Investments (Details)
Dec. 29, 2019
TimWen  
Schedule of Investments  
Equity Method Investment, Ownership Percentage 50.00%
Brazil JV  
Schedule of Investments  
Equity Method Investment, Ownership Percentage 20.00%
v3.19.3.a.u2
Summary of Significant Accounting Policies Self-insurance (Details)
$ in Thousands
Dec. 29, 2019
USD ($)
Insurance Claims  
Loss Contingencies  
Loss Contingency, Range of Possible Loss per Occurrence, Maximum $ 500
v3.19.3.a.u2
Summary of Significant Accounting Policies Leases (Details)
Dec. 29, 2019
Minimum  
Operating Leased Assets  
Lessee, Operating Lease, Term of Contract 15 years
Maximum  
Operating Leased Assets  
Lessee, Operating Lease, Term of Contract 20 years
v3.19.3.a.u2
Summary of Significant Accounting Policies Concentration of Risk (Details)
 12 Months Ended
Dec. 29, 2019
states
countries
distributors
number_of_restaurants
customers
Concentration Risk  
Number of Customers Accounting for More Than 10% of Revenues | customers 0
Number of Restaurants 6,788
U.S.  
Concentration Risk  
Number of Main In-line Distributors | distributors 1
Number of Additional In-line Distributors | distributors 5
Number of States Where Restaurants are Located | states 50
International  
Concentration Risk  
Number of Countries Entity Operates (Including Canada) | countries 30
Entity Operated Units  
Concentration Risk  
Number of Restaurants 357
Entity Operated Units | International  
Concentration Risk  
Number of Restaurants 0
Main In-line Distributor Risk | U.S.  
Concentration Risk  
Concentration Risk, Percentage 52.00%
Additional In-line Distributor Risk | U.S.  
Concentration Risk  
Concentration Risk, Percentage 47.00%
Geographic Concentration Risk | International  
Concentration Risk  
Concentration Risk, Percentage 10.00%
v3.19.3.a.u2
Summary of Significant Accounting Policies New Accounting Standards Adopted (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2018
Dec. 29, 2019
New Accounting Pronouncements or Change in Accounting Principle    
Operating lease assets   $ 857,199
Accounting Standards Update 2016-02    
New Accounting Pronouncements or Change in Accounting Principle    
Operating lease liabilities $ 1,011,000  
Operating lease assets 934,000  
Favorable leases 23,000  
Unfavorable leases 30,000  
Straight-line rent in excess of minimum rents paid 67,000  
Effect on future earnings, amount   38,000
Effect on future earnings, offset amount   $ 38,000
Cumulative effect on retained earnings, net of tax $ 1,105  
v3.19.3.a.u2
Summary of Significant Accounting Policies Adoption for Topic 842 Leases (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Prior Period Adjustments Restatement      
Properties $ 977,000 $ 1,023,267 $ 1,062,869
Finance lease assets   189,969  
Current portion of long-term debt 22,750 23,250  
Current portion of finance lease liabilities   8,405  
Long-term debt 2,257,561 2,305,552  
Long-term finance lease liabilities   447,231  
Repayments of long-term debt $ (899,800) (894,501) (52,593)
Repayments of finance lease liabilities   (5,571) (5,520)
Previously Reported      
Prior Period Adjustments Restatement      
Properties   1,213,236  
Finance lease assets   0  
Current portion of long-term debt   31,655  
Current portion of finance lease liabilities   0  
Long-term debt   2,752,783  
Long-term finance lease liabilities   0  
Repayments of long-term debt   (900,072) (58,113)
Repayments of finance lease liabilities   0 0
Restatement Adjustment      
Prior Period Adjustments Restatement      
Properties   (189,969)  
Finance lease assets   189,969  
Current portion of long-term debt   (8,405)  
Current portion of finance lease liabilities   8,405  
Long-term debt   (447,231)  
Long-term finance lease liabilities   447,231  
Repayments of long-term debt   5,571 5,520
Repayments of finance lease liabilities   $ (5,571) $ (5,520)
v3.19.3.a.u2
Summary of Significant Accounting Policies Adoption for Topic 606 Revenue Recognition (Details) - USD ($)
$ in Thousands
 3 Months Ended 12 Months Ended
Dec. 29, 2019
Sep. 29, 2019
Jun. 30, 2019
Mar. 31, 2019
Dec. 30, 2018
Sep. 30, 2018
Jul. 01, 2018
Apr. 01, 2018
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Jan. 01, 2017
New Accounting Pronouncements or Change in Accounting Principle                        
Accrued expenses and other current liabilities $ 165,272       $ 150,636       $ 165,272 $ 150,636    
Advertising funds restricted liabilities 84,195       80,153       84,195 80,153    
Total current liabilities 349,698       284,185       349,698 284,185    
Deferred income taxes 270,759       269,160       270,759 269,160    
Deferred franchise fees 91,790       92,232       91,790 92,232    
Total liabilities 4,478,170       3,643,586       4,478,170 3,643,586    
Retained earnings 185,725       146,277       185,725 146,277    
Accumulated other comprehensive loss (53,828)       (61,673)       (53,828) (61,673) $ (46,198) $ (63,241)
Total stockholders' equity 516,359       648,449       516,359 648,449 573,203 $ 527,736
Total revenues 427,191 $ 437,880 $ 435,348 $ 408,583 397,820 $ 400,550 $ 411,002 $ 380,564 1,709,002 1,589,936 1,223,408  
Advertising funds expense                 338,116 321,866 0  
Total costs and expenses                 1,446,423 1,340,044 1,008,650  
Operating profit 36,717 79,023 80,573 66,266 45,799 77,348 71,483 55,262 262,579 249,892 214,758  
Income before income taxes                 171,481 574,916 101,019  
Provision for income taxes                 34,541 114,801 (93,010)  
Net income $ 26,533 $ 46,127 $ 32,386 $ 31,894 18,831 $ 391,249 $ 29,876 $ 20,159 136,940 460,115 194,029  
Revenue recognized during the period related to deferred franchise fees                 9,487 9,641    
Deferred income tax                 837 (6,568) (119,330)  
Other, net                 (4,838) 5,178 1,253  
Advertising funds restricted assets and liabilities                 (2,720) 13,955 (12,230)  
Accrued expenses and other current liabilities                 5,034 23,963 4,982  
Adjustments for franchise fees | Accounting Standards Update 2014-09                        
New Accounting Pronouncements or Change in Accounting Principle                        
Accrued expenses and other current liabilities         (3,079)         (3,079)    
Advertising funds restricted liabilities         0         0    
Total current liabilities         (3,079)         (3,079)    
Deferred income taxes         21,861         21,861    
Deferred franchise fees         (81,551)         (81,551)    
Total liabilities         (62,769)         (62,769)    
Retained earnings         63,174         63,174    
Accumulated other comprehensive loss         (405)         (405)    
Total stockholders' equity         62,769         62,769    
Total revenues                   (525)    
Advertising funds expense                   0    
Total costs and expenses                   0    
Operating profit                   (525)    
Income before income taxes                   (525)    
Provision for income taxes                   (134)    
Net income                   (391)    
Deferred income tax                   (134)    
Other, net                   (502)    
Advertising funds restricted assets and liabilities                   0    
Accrued expenses and other current liabilities                   1,027    
Adjustments for advertising funds | Accounting Standards Update 2014-09                        
New Accounting Pronouncements or Change in Accounting Principle                        
Accrued expenses and other current liabilities         0         0    
Advertising funds restricted liabilities         (2,492)         (2,492)    
Total current liabilities         (2,492)         (2,492)    
Deferred income taxes         0         0    
Deferred franchise fees         0         0    
Total liabilities         (2,492)         (2,492)    
Retained earnings         2,492         2,492    
Accumulated other comprehensive loss         0         0    
Total stockholders' equity         2,492         2,492    
Total revenues                   (326,019)    
Advertising funds expense                   (321,866)    
Total costs and expenses                   (321,866)    
Operating profit                   (4,153)    
Income before income taxes                   (4,153)    
Provision for income taxes                   0    
Net income                   (4,153)    
Deferred income tax                   0    
Other, net                   0    
Advertising funds restricted assets and liabilities                   4,153    
Accrued expenses and other current liabilities                   0    
Balances without adoption | Accounting Standards Update 2014-09                        
New Accounting Pronouncements or Change in Accounting Principle                        
Accrued expenses and other current liabilities         147,557         147,557    
Advertising funds restricted liabilities         77,661         77,661    
Total current liabilities         278,614         278,614    
Deferred income taxes         291,021         291,021    
Deferred franchise fees         10,681         10,681    
Total liabilities         3,578,325         3,578,325    
Retained earnings         211,943         211,943    
Accumulated other comprehensive loss         (62,078)         (62,078)    
Total stockholders' equity         $ 713,710         713,710    
Total revenues                   1,263,392    
Advertising funds expense                   0    
Total costs and expenses                   1,018,178    
Operating profit                   245,214    
Income before income taxes                   570,238    
Provision for income taxes                   114,667    
Net income                   455,571    
Revenue recognized during the period related to deferred franchise fees                   9,116    
Deferred income tax                   (6,702)    
Other, net                   4,676    
Advertising funds restricted assets and liabilities                   18,108    
Accrued expenses and other current liabilities                   24,990    
Franchise royalty revenue and fees                        
New Accounting Pronouncements or Change in Accounting Principle                        
Revenue from Contract with Customer, Excluding Assessed Tax                 428,999 409,043 410,503  
Franchise royalty revenue and fees | Adjustments for franchise fees | Accounting Standards Update 2014-09                        
New Accounting Pronouncements or Change in Accounting Principle                        
Revenue from Contract with Customer, Excluding Assessed Tax                   (525)    
Franchise royalty revenue and fees | Adjustments for advertising funds | Accounting Standards Update 2014-09                        
New Accounting Pronouncements or Change in Accounting Principle                        
Revenue from Contract with Customer, Excluding Assessed Tax                   0    
Franchise royalty revenue and fees | Balances without adoption | Accounting Standards Update 2014-09                        
New Accounting Pronouncements or Change in Accounting Principle                        
Revenue from Contract with Customer, Excluding Assessed Tax                   408,518    
Advertising funds revenue                        
New Accounting Pronouncements or Change in Accounting Principle                        
Revenue from Contract with Customer, Excluding Assessed Tax                 $ 339,453 326,019 $ 0  
Advertising funds revenue | Adjustments for franchise fees | Accounting Standards Update 2014-09                        
New Accounting Pronouncements or Change in Accounting Principle                        
Revenue from Contract with Customer, Excluding Assessed Tax                   0    
Advertising funds revenue | Adjustments for advertising funds | Accounting Standards Update 2014-09                        
New Accounting Pronouncements or Change in Accounting Principle                        
Revenue from Contract with Customer, Excluding Assessed Tax                   (326,019)    
Advertising funds revenue | Balances without adoption | Accounting Standards Update 2014-09                        
New Accounting Pronouncements or Change in Accounting Principle                        
Revenue from Contract with Customer, Excluding Assessed Tax                   $ 0    
v3.19.3.a.u2
Disaggregation of Revenue (Details) - USD ($)
$ in Thousands
 3 Months Ended 12 Months Ended
Dec. 29, 2019
Sep. 29, 2019
Jun. 30, 2019
Mar. 31, 2019
Dec. 30, 2018
Sep. 30, 2018
Jul. 01, 2018
Apr. 01, 2018
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Disaggregation of Revenue                      
Franchise agreement term                 20 years    
Franchise agreement renewal term                 10 years    
Franchise agreement extension term                 25 years    
Franchise agreement renewal term extension                 20 years    
Franchise rental income                 $ 233,065    
Franchise rental income                   $ 203,297 $ 190,103
Total revenues $ 427,191 $ 437,880 $ 435,348 $ 408,583 $ 397,820 $ 400,550 $ 411,002 $ 380,564 1,709,002 1,589,936 1,223,408
Sales at Company-operated restaurants                      
Disaggregation of Revenue                      
Revenue from Contract with Customer, Excluding Assessed Tax                 707,485 651,577 622,802
Franchise royalty revenue                      
Disaggregation of Revenue                      
Revenue from Contract with Customer, Excluding Assessed Tax                 400,700 377,946 365,972
Franchise fees                      
Disaggregation of Revenue                      
Revenue from Contract with Customer, Excluding Assessed Tax                 28,299 31,097 44,531
Advertising funds revenue                      
Disaggregation of Revenue                      
Revenue from Contract with Customer, Excluding Assessed Tax                 339,453 326,019 0
Wendy's U.S.                      
Disaggregation of Revenue                      
Franchise rental income                 0    
Franchise rental income                   0 0
Total revenues                 1,404,307 1,312,491 986,738
Wendy's U.S. | Sales at Company-operated restaurants                      
Disaggregation of Revenue                      
Revenue from Contract with Customer, Excluding Assessed Tax                 707,485 651,577 622,802
Wendy's U.S. | Franchise royalty revenue                      
Disaggregation of Revenue                      
Revenue from Contract with Customer, Excluding Assessed Tax                 355,702 335,500 326,846
Wendy's U.S. | Franchise fees                      
Disaggregation of Revenue                      
Revenue from Contract with Customer, Excluding Assessed Tax                 21,889 18,972 37,090
Wendy's U.S. | Advertising funds revenue                      
Disaggregation of Revenue                      
Revenue from Contract with Customer, Excluding Assessed Tax                 319,231 306,442  
Wendy's International                      
Disaggregation of Revenue                      
Franchise rental income                 0    
Franchise rental income                   0 0
Total revenues                 68,198 67,630 43,696
Wendy's International | Sales at Company-operated restaurants                      
Disaggregation of Revenue                      
Revenue from Contract with Customer, Excluding Assessed Tax                 0 0 0
Wendy's International | Franchise royalty revenue                      
Disaggregation of Revenue                      
Revenue from Contract with Customer, Excluding Assessed Tax                 44,998 42,446 39,126
Wendy's International | Franchise fees                      
Disaggregation of Revenue                      
Revenue from Contract with Customer, Excluding Assessed Tax                 2,978 5,607 4,570
Wendy's International | Advertising funds revenue                      
Disaggregation of Revenue                      
Revenue from Contract with Customer, Excluding Assessed Tax                 20,222 19,577  
Global Real Estate & Development                      
Disaggregation of Revenue                      
Franchise rental income                 233,065    
Franchise rental income                   203,297 190,103
Total revenues                 236,497 209,815 192,974
Global Real Estate & Development | Sales at Company-operated restaurants                      
Disaggregation of Revenue                      
Revenue from Contract with Customer, Excluding Assessed Tax                 0 0 0
Global Real Estate & Development | Franchise royalty revenue                      
Disaggregation of Revenue                      
Revenue from Contract with Customer, Excluding Assessed Tax                 0 0 0
Global Real Estate & Development | Franchise fees                      
Disaggregation of Revenue                      
Revenue from Contract with Customer, Excluding Assessed Tax                 3,432 6,518 $ 2,871
Global Real Estate & Development | Advertising funds revenue                      
Disaggregation of Revenue                      
Revenue from Contract with Customer, Excluding Assessed Tax                 $ 0 $ 0  
Minimum                      
Disaggregation of Revenue                      
Lessee, Operating Lease, Term of Contract 15 years               15 years    
Minimum | Lessee Disclosure                      
Disaggregation of Revenue                      
Lessee, Operating Lease, Term of Contract 15 years               15 years    
Maximum                      
Disaggregation of Revenue                      
Lessee, Operating Lease, Term of Contract 20 years               20 years    
Maximum | Lessee Disclosure                      
Disaggregation of Revenue                      
Lessee, Operating Lease, Term of Contract 20 years               20 years    
v3.19.3.a.u2
Contract Balances (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 29, 2019
Dec. 30, 2018
Contract balances    
Receivables, which are included in Accounts and notes receivable, net $ 39,188 $ 40,300
Receivables, which are included in Advertising funds restricted assets 54,394 47,332
Deferred franchise fees at beginning of period 102,205 102,492
Revenue recognized during the period (9,487) (9,641)
New deferrals due to cash received and other 7,971 9,354
Deferred franchise fees at end of period 100,689 102,205
Deferred franchisee fees, current 8,899 9,973
Deferred franchise fees, noncurrent $ 91,790 $ 92,232
v3.19.3.a.u2
Remaining Performance Obligation (Details)
$ in Thousands
Dec. 29, 2019
USD ($)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2019-12-30  
Revenue, Remaining Performance Obligation  
Revenue, Remaining Performance Obligation, Amount $ 8,899
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2021-01-04  
Revenue, Remaining Performance Obligation  
Revenue, Remaining Performance Obligation, Amount 6,147
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2022-01-03  
Revenue, Remaining Performance Obligation  
Revenue, Remaining Performance Obligation, Amount 5,898
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2023-01-02  
Revenue, Remaining Performance Obligation  
Revenue, Remaining Performance Obligation, Amount 5,721
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2024-01-01  
Revenue, Remaining Performance Obligation  
Revenue, Remaining Performance Obligation, Amount 5,518
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2024-12-30  
Revenue, Remaining Performance Obligation  
Revenue, Remaining Performance Obligation, Amount 68,506
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: (nil)  
Revenue, Remaining Performance Obligation  
Revenue, Remaining Performance Obligation, Amount $ 100,689
v3.19.3.a.u2
System Optimization (Gains) Losses, Net Summary of Disposition Activity (Details)
$ in Thousands, $ in Thousands
 12 Months Ended
May 31, 2017
USD ($)
Jan. 03, 2021
number_of_restaurants
Dec. 29, 2019
USD ($)
number_of_restaurants
Dec. 30, 2018
USD ($)
number_of_restaurants
Dec. 31, 2017
USD ($)
number_of_restaurants
Dec. 31, 2017
CAD ($)
number_of_restaurants
Dec. 28, 2014
number_of_restaurants
Jan. 01, 2017
Property, Plant and Equipment                
Company-operated restaurant ownership percentage               5.00%
System optimization (gains) losses, net                
Proceeds from sales     $ 3,448 $ 3,223 $ 81,516      
System optimization gains (losses), net     $ 1,283 $ 463 $ (39,076)      
Sale of franchise-operated restaurants to franchisees                
System optimization (gains) losses, net                
Number of restaurants sold to franchisees | number_of_restaurants     37 96 400 400    
Sale of company-owned restaurants to franchisees                
System optimization (gains) losses, net                
Number of restaurants sold to franchisees | number_of_restaurants     0 3 0 0    
Proceeds from sales     $ 0 $ 1,436 $ 0      
Net assets sold     0 (1,370) 0      
Goodwill related to sales of restaurants     0 (208) 0      
Net favorable leases     0 220 0      
Other     0 11 0      
Gain on sales of restaurants, net, before post-closing adjustments     0 89 0      
Post-closing adjustments on sales of restaurants     1,087 445 2,541      
System optimization gains (losses), net     1,087 534 2,541      
Recognition of deferred gain on sale of property     911 1,029 312      
Cash Proceeds from Post Closing Adjustments, Net of Payments       6 294      
Sale of other assets                
System optimization (gains) losses, net                
Proceeds from sales     3,448 1,781 10,534      
System optimization gains (losses), net     196 (71) 2,018      
Recognition of deferred gain on sale of property         375      
NPC Disposition                
System optimization (gains) losses, net                
Proceeds from sales $ 70,688       70,688      
Net assets sold         (70,688)      
Goodwill related to sales of restaurants         (65,961)      
Net favorable leases         24,034      
Other         (1,708)      
System optimization gains (losses), net     $ 0 $ 0 (43,635)      
Guarantee Obligations | Sale of company-owned restaurants to franchisees                
System optimization (gains) losses, net                
Recognition of deferred gain on sale of property         $ 1,822      
Franchises Sold, Deferred Gain on Sale | number_of_restaurants             8  
Canada, Dollars | Guarantee Obligations | Sale of company-owned restaurants to franchisees                
System optimization (gains) losses, net                
Recognition of deferred gain on sale of property           $ 2,300    
Scenario, Forecast | Sale of company-owned restaurants to franchisees                
System optimization (gains) losses, net                
Number of restaurants sold to franchisees | number_of_restaurants   43            
v3.19.3.a.u2
System Optimization (Gains) Losses, Net Summary of DavCo and NPC Transactions (Details)
$ in Thousands
 12 Months Ended
May 31, 2017
USD ($)
number_of_restaurants
Dec. 29, 2019
USD ($)
Dec. 30, 2018
USD ($)
Dec. 31, 2017
USD ($)
Property, Plant and Equipment        
Goodwill   $ 755,911 $ 747,884 $ 743,334
Proceeds from sales   3,448 3,223 81,516
System optimization gains (losses), net   1,283 463 (39,076)
DavCo Acquisition        
Property, Plant and Equipment        
Restaurants acquired from franchisees | number_of_restaurants 140      
Restaurants closed before acquisition | number_of_restaurants 7      
Total consideration paid $ 86,788     86,788
Net assets held for sale       70,688
Finance lease assets       49,360
Deferred taxes       27,830
Finance lease obligations       (97,797)
Net unfavorable leases       (22,330)
Other liabilities       (6,924)
Total identifiable net assets       20,827
Goodwill       65,961
Favorable Lease Assets       1,229
Unfavorable Lease Liabilities       23,559
Supplemental deferred purchase price       6,269
Tax deductible goodwill       21,795
NPC Disposition        
Property, Plant and Equipment        
Number of sold restaurants to be reimaged | number_of_restaurants 90      
Number of restaurants to be built by the end of 2022 | number_of_restaurants 15      
Proceeds from sales $ 70,688     70,688
Net assets sold       (70,688)
Goodwill       (65,961)
Net favorable leases       24,034
Other       (1,708)
System optimization gains (losses), net   $ 0 $ 0 (43,635)
Favorable Lease Assets       30,068
Unfavorable Lease Liabilities       $ 6,034
v3.19.3.a.u2
System Optimization (Gains) Losses, Net Assets Held for Sale (Details) - USD ($)
$ in Thousands
Dec. 29, 2019
Dec. 30, 2018
Long Lived Assets Held-for-sale    
Assets Held for sale $ 1,437 $ 2,435
v3.19.3.a.u2
Acquisitions (Details)
$ in Thousands
 3 Months Ended 12 Months Ended
Mar. 31, 2019
USD ($)
Dec. 29, 2019
USD ($)
number_of_restaurants
Dec. 30, 2018
USD ($)
number_of_restaurants
Dec. 31, 2017
USD ($)
number_of_restaurants
Business Acquisition        
Goodwill   $ 755,911 $ 747,884 $ 743,334
Acquisitions        
Business Acquisition        
Restaurants acquired from franchisees | number_of_restaurants   5 16 0
Total consideration paid, net of cash received   $ 5,052 $ 21,401 $ 0
Properties   666 4,363 0
Acquired franchise rights   1,354 10,127 0
Finance lease assets   5,350 5,360 0
Other assets   0 621 0
Finance lease liabilities   (4,084)    
Finance lease liabilities     (3,135) 0
Unfavorable leases   0 (733) 0
Other   (2,316) (2,240) 0
Total identifiable net assets   970 14,363 0
Goodwill   $ 4,082 $ 7,038 $ 0
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Intangibles $ (2,989)      
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Financial Assets $ 140      
v3.19.3.a.u2
Reorganization and Reorganization Costs Summary (Details) - USD ($)
$ in Thousands
 3 Months Ended 12 Months Ended
Dec. 29, 2019
Dec. 30, 2018
Sep. 30, 2018
Jul. 01, 2018
Apr. 01, 2018
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Restructuring Cost and Reserve                
Reorganization and realignment costs $ 12,194 $ 2,377 $ 941 $ 3,124 $ 2,626 $ 16,965 $ 9,068 $ 22,574
IT Realignment                
Restructuring Cost and Reserve                
Reorganization and realignment costs           9,127 0 0
G&A Realignment                
Restructuring Cost and Reserve                
Reorganization and realignment costs           7,749 8,785 21,663
System Optimization                
Restructuring Cost and Reserve                
Reorganization and realignment costs           $ 89 $ 283 $ 911
v3.19.3.a.u2
Reorganization and Reorganization Costs IT Realignment Costs (Details) - USD ($)
$ in Thousands
 3 Months Ended 12 Months Ended
Dec. 29, 2019
Dec. 30, 2018
Sep. 30, 2018
Jul. 01, 2018
Apr. 01, 2018
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Restructuring Cost and Reserve                
Reorganization and realignment costs $ 12,194 $ 2,377 $ 941 $ 3,124 $ 2,626 $ 16,965 $ 9,068 $ 22,574
IT Realignment                
Restructuring Cost and Reserve                
Restructuring and Related Cost, Expected Cost Remaining 5,500         5,500    
Restructuring and Related Cost, Incurred Cost           8,934    
Reorganization and realignment costs           9,127 $ 0 $ 0
Severance and related employee costs | IT Realignment                
Restructuring Cost and Reserve                
Restructuring and Related Cost, Expected Cost Remaining 1,000         1,000    
Restructuring and Related Cost, Incurred Cost           7,548    
Third-party and other costs | IT Realignment                
Restructuring Cost and Reserve                
Restructuring and Related Cost, Expected Cost Remaining 4,500         4,500    
Restructuring and Related Cost, Incurred Cost           1,386    
Share-based compensation | IT Realignment                
Restructuring Cost and Reserve                
Restructuring and Related Cost, Incurred Cost           193    
Minimum | IT Realignment                
Restructuring Cost and Reserve                
Restructuring and Related Cost, Expected Cost 13,000         13,000    
Maximum | IT Realignment                
Restructuring Cost and Reserve                
Restructuring and Related Cost, Expected Cost $ 15,000         $ 15,000    
v3.19.3.a.u2
Reorganization and Reorganization Costs IT Realignment Accrual Rollforward (Details) - IT Realignment
$ in Thousands
 12 Months Ended
Dec. 29, 2019
USD ($)
Restructuring Cost and Reserve  
Beginning balance $ 0
Charges 8,934
Payments (310)
Ending balance 8,624
Severance and related employee costs  
Restructuring Cost and Reserve  
Beginning balance 0
Charges 7,548
Payments 0
Ending balance 7,548
Third-party and other costs  
Restructuring Cost and Reserve  
Beginning balance 0
Charges 1,386
Payments (310)
Ending balance 1,076
Accrued Liabilities  
Restructuring Cost and Reserve  
Ending balance 8,025
Other liabilities  
Restructuring Cost and Reserve  
Ending balance $ 599
v3.19.3.a.u2
Reorganization and Reorganization Costs G&A Realignment Costs (Details)
$ in Thousands
 3 Months Ended 12 Months Ended
Dec. 29, 2019
USD ($)
Dec. 30, 2018
USD ($)
Pension_Plans
Sep. 30, 2018
USD ($)
Jul. 01, 2018
USD ($)
Apr. 01, 2018
USD ($)
Dec. 29, 2019
USD ($)
Dec. 30, 2018
USD ($)
Pension_Plans
Dec. 31, 2017
USD ($)
Restructuring Cost and Reserve                
Reorganization and realignment costs $ 12,194 $ 2,377 $ 941 $ 3,124 $ 2,626 $ 16,965 $ 9,068 $ 22,574
G&A Realignment                
Restructuring Cost and Reserve                
Restructuring and Related Cost, Incurred Cost           6,535 5,893 16,536
Restructuring and Related Cost, Cost Incurred to Date 28,964         28,964    
Reorganization and realignment costs           7,749 8,785 21,663
Restructuring Charges, Incurred to Date 38,197         38,197    
Severance and related employee costs | G&A Realignment                
Restructuring Cost and Reserve                
Restructuring and Related Cost, Incurred Cost           5,485 3,797 14,956
Restructuring and Related Cost, Cost Incurred to Date 24,238         24,238    
Recruitment and relocation costs | G&A Realignment                
Restructuring Cost and Reserve                
Restructuring and Related Cost, Incurred Cost           950 1,077 489
Restructuring and Related Cost, Cost Incurred to Date 2,516         2,516    
Third-party and other costs | G&A Realignment                
Restructuring Cost and Reserve                
Restructuring and Related Cost, Incurred Cost           100 1,019 1,091
Restructuring and Related Cost, Cost Incurred to Date 2,210         2,210    
Share-based compensation | G&A Realignment                
Restructuring Cost and Reserve                
Restructuring and Related Cost, Incurred Cost           1,214 1,557 5,127
Restructuring and Related Cost, Cost Incurred to Date 7,898         7,898    
Termination of defined benefit plans | G&A Realignment                
Restructuring Cost and Reserve                
Restructuring and Related Cost, Incurred Cost           0 $ 1,335 $ 0
Restructuring and Related Cost, Cost Incurred to Date $ 1,335         $ 1,335    
Pension Plans, Defined Benefit                
Restructuring Cost and Reserve                
Defined Benefit Plans, Number of Plans | Pension_Plans   2         2  
v3.19.3.a.u2
Reorganization and Reorganization Costs G&A Realignment Accrual Rollforward (Details) - G&A Realignment - USD ($)
$ in Thousands
 12 Months Ended
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Restructuring Cost and Reserve      
Beginning balance $ 7,324 $ 12,270  
Charges 6,535 5,893 $ 16,536
Payments (8,500) (10,839)  
Ending balance 5,359 7,324 12,270
Severance and related employee costs      
Restructuring Cost and Reserve      
Beginning balance 7,241 12,093  
Charges 5,485 3,797 14,956
Payments (7,450) (8,649)  
Ending balance 5,276 7,241 12,093
Recruitment and relocation costs      
Restructuring Cost and Reserve      
Beginning balance 83 177  
Charges 950 1,077 489
Payments (950) (1,171)  
Ending balance 83 83 177
Third-party and other costs      
Restructuring Cost and Reserve      
Beginning balance 0 0  
Charges 100 1,019 1,091
Payments (100) (1,019)  
Ending balance 0 0 $ 0
Accrued Liabilities      
Restructuring Cost and Reserve      
Beginning balance 6,280    
Ending balance 4,504 6,280  
Other liabilities      
Restructuring Cost and Reserve      
Beginning balance 1,044    
Ending balance $ 855 $ 1,044  
v3.19.3.a.u2
Reorganization and Reorganization Costs System Optimization Costs (Details) - USD ($)
$ in Thousands
 3 Months Ended 12 Months Ended
Dec. 29, 2019
Dec. 30, 2018
Sep. 30, 2018
Jul. 01, 2018
Apr. 01, 2018
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Restructuring Cost and Reserve                
Reorganization and realignment costs $ 12,194 $ 2,377 $ 941 $ 3,124 $ 2,626 $ 16,965 $ 9,068 $ 22,574
System Optimization                
Restructuring Cost and Reserve                
Restructuring and Related Cost, Incurred Cost           89 283 911
Restructuring and Related Cost, Cost Incurred to Date 41,870         41,870    
Reorganization and realignment costs           89 283 911
Restructuring Charges, Incurred to Date 72,281         72,281    
Severance and related employee costs | System Optimization                
Restructuring Cost and Reserve                
Restructuring and Related Cost, Incurred Cost           0 0 3
Restructuring and Related Cost, Cost Incurred to Date 18,237         18,237    
Professional fees | System Optimization                
Restructuring Cost and Reserve                
Restructuring and Related Cost, Incurred Cost           72 264 838
Restructuring and Related Cost, Cost Incurred to Date 17,784         17,784    
Other | System Optimization                
Restructuring Cost and Reserve                
Restructuring and Related Cost, Incurred Cost           17 19 70
Restructuring and Related Cost, Cost Incurred to Date 5,849         5,849    
Accelerated depreciation and amortization | System Optimization                
Restructuring Cost and Reserve                
Restructuring and Related Cost, Cost Incurred to Date 25,398         25,398    
Reorganization and realignment costs           0 0 0
Share-based compensation | System Optimization                
Restructuring Cost and Reserve                
Restructuring and Related Cost, Cost Incurred to Date $ 5,013         5,013    
Reorganization and realignment costs           $ 0 $ 0 $ 0
v3.19.3.a.u2
Reorganization and Reorganization Costs System Optimization Accrual Rollforward (Details) - System Optimization - USD ($)
$ in Thousands
 12 Months Ended
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Restructuring Cost and Reserve      
Beginning balance $ 0 $ 0 $ 101
Charges 89 283 911
Payments     (1,012)
Ending balance 0 0 0
Severance and related employee costs      
Restructuring Cost and Reserve      
Beginning balance   0 0
Charges 0 0 3
Payments     (3)
Ending balance     0
Recruitment and relocation costs      
Restructuring Cost and Reserve      
Beginning balance   0 101
Charges     838
Payments     (939)
Ending balance     0
Other      
Restructuring Cost and Reserve      
Beginning balance   0 0
Charges $ 17 $ 19 70
Payments     (70)
Ending balance     $ 0
v3.19.3.a.u2
Income Per Share (Details) - shares
shares in Thousands
 12 Months Ended
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Common Stock:      
Weighted average basic shares outstanding 229,944 237,797 244,179
Dilutive effect of stock options and restricted shares 5,131 7,166 8,110
Weighted average diluted shares outstanding 235,075 244,963 252,289
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount 2,518 1,520 1,168
v3.19.3.a.u2
Cash and Receivables Cash and Cash Equivalents (Details) - USD ($)
$ in Thousands
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Jan. 01, 2017
Cash and Cash Equivalents        
Cash $ 185,203 $ 209,177    
Cash equivalents 114,992 222,228    
Cash and cash equivalents 300,195 431,405 $ 171,447  
Restricted cash and cash equivalents, current 34,539 29,860 32,633  
Total restricted cash and cash equivalents, current 58,512 55,107    
Total cash, cash equivalents and restricted cash 358,707 486,512 $ 212,824 $ 275,949
Restricted Cash        
Cash and Cash Equivalents        
Restricted cash and cash equivalents, current 34,539 29,860    
Restricted Cash | Accounts held by trustee for the securitized financing facility        
Cash and Cash Equivalents        
Restricted cash and cash equivalents, current 34,209 29,538    
Restricted Cash | Trust for termination costs for former Wendy's executives        
Cash and Cash Equivalents        
Restricted cash and cash equivalents, current 111 109    
Restricted Cash | Other        
Cash and Cash Equivalents        
Restricted cash and cash equivalents, current 219 213    
Advertising Funds Restricted Cash        
Cash and Cash Equivalents        
Restricted cash and cash equivalents, current $ 23,973 $ 25,247    
v3.19.3.a.u2
Cash and Receivables Accounts and Notes Receivable (Details) - USD ($)
$ in Thousands
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Jan. 01, 2017
Accounts, Notes, Loans and Financing Receivable        
Accounts receivable, gross, current $ 103,852 $ 111,887    
Accounts and notes receivable, gross, current 127,480 114,744    
Allowance for doubtful accounts, current (10,019) (4,939) $ (4,546) $ (4,030)
Accounts and notes receivable, net, current 117,461 109,805    
Allowance for doubtful accounts, noncurrent 0 (2,000) $ 0 $ (26)
Income taxes receivable 13,555 14,475    
Insurance settlements receivable 25,350 22,500    
Accounts and Notes Receivable Net        
Accounts, Notes, Loans and Financing Receivable        
Sales-type and direct financing leases, lease receivable 3,146      
Net current investment in direct financing leases   735    
Franchisees        
Accounts, Notes, Loans and Financing Receivable        
Accounts receivable, gross, current 55,570 60,567    
Notes receivable from franchisees, gross, current 23,628 2,857    
Notes receivable from franchisees, gross, noncurrent 1,617 16,322    
Allowance for doubtful accounts, noncurrent 0 (2,000)    
Notes and loans receivable, net, noncurrent 1,617 14,322    
Other Receivables        
Accounts, Notes, Loans and Financing Receivable        
Accounts receivable, gross, current 48,282 51,320    
Indonesia franchisee        
Accounts, Notes, Loans and Financing Receivable        
Notes receivable from franchisees, gross, current 1,262 969    
Notes receivable from franchisees, gross, noncurrent 1,617 2,522    
Brazil JV        
Accounts, Notes, Loans and Financing Receivable        
Notes receivable from franchisees, gross, current 15,920      
Notes receivable from franchisees, gross, noncurrent   12,800    
India franchisee        
Accounts, Notes, Loans and Financing Receivable        
Notes receivable from franchisees, gross, current 1,000      
Allowance for doubtful accounts, current (985)      
Notes receivable from franchisees, gross, noncurrent   $ 1,000    
U.S. franchisee        
Accounts, Notes, Loans and Financing Receivable        
Notes receivable from franchisees, gross, current $ 1,000      
v3.19.3.a.u2
Cash and Receivables Allowance for Doubtful Accounts (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Allowance for Doubtful Accounts Receivable      
Balance at beginning of year; Current $ 4,939 $ 4,546 $ 4,030
Balance at beginning of year; Non-current 2,000 0 26
Provision for doubtful accounts; Franchisees and other 3,294 2,562 579
Uncollectible accounts written-off, net of recoveries (214) (169) (89)
Balance at end of year; Current 10,019 4,939 4,546
Balance at end of year; Non-current 0 2,000 0
Balance at end of year; Total $ 10,019 $ 6,939 $ 4,546
v3.19.3.a.u2
Investments Carrying Value of Investments (Details) - USD ($)
$ in Thousands
Dec. 29, 2019
Dec. 30, 2018
Schedule of Investments    
Equity method investments $ 45,310 $ 47,021
Other investments in equity securities 639 639
Investments $ 45,949 $ 47,660
v3.19.3.a.u2
Investments Equity Investment Summary (Details) - USD ($)
$ in Thousands
 3 Months Ended 12 Months Ended
Jun. 28, 2015
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Schedule of Equity Method Investments        
Equity in earnings for the period   $ 8,673 $ 8,076 $ 7,573
Allowance for Doubtful Accounts Receivable   10,019 6,939 4,546
TimWen and Brazil JV        
Schedule of Equity Method Investments        
Equity in earnings for the period   $ 10,943 10,402 9,897
TimWen        
Schedule of Equity Method Investments        
Equity Method Investment, Ownership Percentage   50.00%    
Equity Method Investment, Difference Between Carrying Amount and Underlying Equity   $ 25,160 26,378  
Brazil JV        
Schedule of Equity Method Investments        
Equity Method Investment, Ownership Percentage   20.00%    
Payments to Acquire Interest in Joint Venture $ 1      
Payments to Acquire Interest in Joint Venture, Starbord 2      
Payments to Acquire Interest in Joint Venture, Infinity $ 2      
Equity Method Investment, Initial Ownership Percentage 20.00%      
Equity Method Investment Ownership Percentage, Starbord 40.00%      
Equity Method Investment Ownership Percentage, Infinity 40.00%      
Equity in earnings for the period   $ (1,022) (1,344) $ (1,134)
Amount loaned to Brazil JV, Current   15,920    
Amount loaned to Brazil JV, Noncurrent     12,800  
Allowance for Doubtful Accounts Receivable   $ 5,720 $ 2,000  
Brazil JV | Minimum        
Schedule of Equity Method Investments        
Note Receivable, Interest Rate   3.25%    
Brazil JV | Maximum        
Schedule of Equity Method Investments        
Note Receivable, Interest Rate   6.50%    
v3.19.3.a.u2
Investments Investment Rollforward (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Schedule of Equity Method Investments      
Balance at beginning of period $ 47,021    
Investment 0 $ 13 $ 375
Equity in earnings for the period 8,673 8,076 7,573
Distributions received (13,400) (13,390) (11,713)
Foreign currency translation adjustment included in “Other comprehensive income (loss), net” 7,845 (16,524) $ 15,150
Balance at end of period $ 45,310 $ 47,021  
TimWen      
Schedule of Equity Method Investments      
Equity Method Investment, Purchase Price Adjustment, Amortization Period 21 years 21 years 21 years
TimWen and Brazil JV      
Schedule of Equity Method Investments      
Balance at beginning of period $ 47,021 $ 55,363 $ 54,545
Investment 0 13 375
Equity in earnings for the period 10,943 10,402 9,897
Amortization of purchase price adjustments (2,270) (2,326) (2,324)
Equity in Earnings, Net of Amortization of Purchase Price Adjustment 8,673 8,076 7,573
Distributions received (13,400) (13,390) (11,713)
Foreign currency translation adjustment included in “Other comprehensive income (loss), net” 3,016 (3,041) 4,583
Balance at end of period $ 45,310 $ 47,021 $ 55,363
v3.19.3.a.u2
Investments Indirect Investment in Inspire Brands (Details) - USD ($)
$ in Thousands
 3 Months Ended 12 Months Ended
Aug. 31, 2018
Dec. 30, 2018
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Feb. 28, 2018
Dec. 29, 2013
Jan. 01, 2012
Inspire Brands carrying value   $ 639 $ 639 $ 639        
Gain on sale of investment     24,496 450,000 $ 2,570      
Income Tax Expense (Benefit)     $ 34,541 $ 114,801 $ (93,010)      
Arby's Restaurant Group, Inc                
Proceeds from Divestiture of Business, Percentage of Buyer Stock Received               18.50%
Inspire Brands carrying value             $ 0  
Inspire Brands, Inc                
Percentage of Arby's Stock after Dilutive Effect of Acquisition           12.30%    
Gain on sale of investment $ 450,000              
Sale of Other Investments in Equity Securities, Transaction Costs 55              
Income Tax Expense (Benefit) $ 97,501              
Income Taxes Paid   $ 95,038            
v3.19.3.a.u2
Investments Other Investments in Equity Securities (Details) - USD ($)
$ in Thousands
 12 Months Ended
Oct. 31, 2019
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Proceeds from sale of investment   $ 24,496 $ 450,000 $ 4,111
Gain on sale of investment   $ 24,496 $ 450,000 $ 2,570
Other investments in equity securities        
Proceeds from sale of investment $ 25,000      
Other investments in equity securities | Investment Income        
Gain on sale of investment 24,366      
Other investments in equity securities | General and administrative        
Gain on sale of investment $ 634      
v3.19.3.a.u2
Properties (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Property, Plant and Equipment      
Property, Plant and Equipment, Gross $ 1,568,668 $ 1,554,422  
Accumulated Depreciation and Amortization (591,668) (531,155)  
Properties 977,000 1,023,267 $ 1,062,869
Depreciation and amortization 131,693 128,879 125,687
Land      
Property, Plant and Equipment      
Property, Plant and Equipment, Gross 375,109 377,277  
Buildings and improvements      
Property, Plant and Equipment      
Property, Plant and Equipment, Gross 508,602 507,219  
Leasehold improvements      
Property, Plant and Equipment      
Property, Plant and Equipment, Gross 405,158 403,896  
Office, restaurant and transportation equipment      
Property, Plant and Equipment      
Property, Plant and Equipment, Gross 279,799 266,030  
Property, Plant and Equipment      
Property, Plant and Equipment      
Depreciation and amortization $ 81,219 $ 79,009 $ 81,946
v3.19.3.a.u2
Goodwill And Other Intangible Assets Schedule of Goodwill and Other Intangibles (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Goodwill      
Goodwill, gross $ 765,308 $ 757,281 $ 752,731
Accumulated impairment losses (9,397) (9,397) (9,397)
Goodwill, net 755,911 747,884 $ 743,334
Restaurant acquisitions 6,931 7,038  
Restaurant dispositions 0 (208)  
Currency translation adjustment $ 1,096 $ (2,280)  
v3.19.3.a.u2
Goodwill And Other Intangible Assets Schedule of Goodwill by Segment (Details) - USD ($)
$ in Thousands
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Schedule of Goodwill, Segment Allocation      
Goodwill $ 755,911 $ 747,884 $ 743,334
Wendy's U.S.      
Schedule of Goodwill, Segment Allocation      
Goodwill 602,491    
Wendy's International      
Schedule of Goodwill, Segment Allocation      
Goodwill 30,872    
Global Real Estate & Development      
Schedule of Goodwill, Segment Allocation      
Goodwill $ 122,548    
v3.19.3.a.u2
Goodwill And Other Intangible Assets Schedule of Finite-Lived And Indefinite Lived Intangible Assets (Details) - USD ($)
$ in Thousands
Dec. 29, 2019
Dec. 30, 2018
Schedule of Finite Lived and Indefinite Lived Intangible Assets    
Indefinite Lived And Finite Lived Intangible Assets, Gross $ 1,609,761 $ 1,651,916
Finite-Lived Intangible Assets, Accumulated Amortization (362,549) (357,763)
Other intangible assets 1,247,212 1,294,153
Trademarks    
Schedule of Finite Lived and Indefinite Lived Intangible Assets    
Indefinite-lived Intangible Assets (Excluding Goodwill) 903,000 903,000
Franchise agreements    
Schedule of Finite Lived and Indefinite Lived Intangible Assets    
Finite-Lived Intangible Assets, Gross 348,825 348,200
Finite-Lived Intangible Assets, Accumulated Amortization (187,063) (170,134)
Finite-Lived Intangible Assets, Net 161,762 178,066
Favorable leases    
Schedule of Finite Lived and Indefinite Lived Intangible Assets    
Finite-Lived Intangible Assets, Gross 166,098 233,990
Finite-Lived Intangible Assets, Accumulated Amortization (47,695) (79,776)
Finite-Lived Intangible Assets, Net 118,403 154,214
Reacquired rights under franchise agreements    
Schedule of Finite Lived and Indefinite Lived Intangible Assets    
Finite-Lived Intangible Assets, Gross 10,172 11,807
Finite-Lived Intangible Assets, Accumulated Amortization (2,766) (1,971)
Finite-Lived Intangible Assets, Net 7,406 9,836
Software    
Schedule of Finite Lived and Indefinite Lived Intangible Assets    
Finite-Lived Intangible Assets, Gross 181,666 154,919
Finite-Lived Intangible Assets, Accumulated Amortization (125,025) (105,882)
Finite-Lived Intangible Assets, Net $ 56,641 $ 49,037
v3.19.3.a.u2
Goodwill And Other Intangible Assets Aggregate Amortization Expense (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Finite-Lived Intangible Assets      
Amortization of intangible assets $ 53,182 $ 52,064 $ 47,302
Future amortization, 2020 46,666    
Future amortization, 2021 41,362    
Future amortization, 2022 37,048    
Future amortization, 2023 33,854    
Future amortization, 2024 29,383    
Future amortization, Thereafter $ 155,899    
v3.19.3.a.u2
Accrued Expenses and Other Current Liabilities (Details) - USD ($)
$ in Thousands
Jan. 31, 2020
Dec. 29, 2019
Dec. 30, 2018
Legal reserves   $ 52,272 $ 55,883
Accrued compensation and related benefits   56,010 37,637
Accrued taxes   23,926 20,811
Other   33,064 36,305
Accrued Liabilities, Current   165,272 150,636
Insurance Settlements Receivable   25,350 22,500
Financial Institutions Case      
Legal reserves   50,000 50,000
Insurance Settlements Receivable   $ 25,000 $ 22,500
Financial Institutions Case | Subsequent Event      
Payments for Legal Settlements $ 24,650    
v3.19.3.a.u2
Long-Term Debt Schedule of Long Term Debt (Details) - USD ($)
$ in Thousands
Dec. 29, 2019
Jun. 30, 2019
Dec. 30, 2018
Jan. 31, 2018
Jun. 28, 2015
Debt Instrument          
Unamortized debt issuance costs $ (33,526)   $ (32,217)    
Total debt 2,280,311   2,328,802    
Less amounts payable within one year (22,750)   (23,250)    
Total long-term debt 2,257,561   2,305,552    
Series 2019-1 Class A-2-I Notes          
Debt Instrument          
Senior Notes $ 398,000 $ 400,000 0    
Debt Instrument, Interest Rate, Stated Percentage 3.783%        
Series 2019-1 Class A-2-II Notes          
Debt Instrument          
Senior Notes $ 447,750 $ 450,000 0    
Debt Instrument, Interest Rate, Stated Percentage 4.08%        
Series 2018-1 Class A-2-I Notes          
Debt Instrument          
Senior Notes $ 441,000   445,500 $ 450,000  
Debt Instrument, Interest Rate, Stated Percentage 3.573%        
Series 2018-1 Class A-2-II Notes          
Debt Instrument          
Senior Notes $ 465,500   470,250 $ 475,000  
Debt Instrument, Interest Rate, Stated Percentage 3.884%        
Series 2015-1 Class A-2-II Notes          
Debt Instrument          
Senior Notes $ 0   870,750    
Debt Instrument, Interest Rate, Stated Percentage 4.08%        
Series 2015-1 Class A-2-III Notes          
Debt Instrument          
Senior Notes $ 478,750   483,750   $ 500,000
Debt Instrument, Interest Rate, Stated Percentage 4.497%        
7% Debentures          
Debt Instrument          
7% debentures $ 82,837   $ 90,769    
Debt Instrument, Interest Rate, Stated Percentage 7.00%        
v3.19.3.a.u2
Long-Term Debt Maturities of long-term debt (Details)
$ in Thousands
Dec. 29, 2019
USD ($)
Debt Instrument  
2020 $ 22,750
2021 22,750
2022 22,750
2023 22,750
2024 22,750
Thereafter 2,207,250
Total long-term debt, gross $ 2,321,000
v3.19.3.a.u2
Long-Term Debt Other Long-term Debt Disclosure (Details)
$ in Thousands, $ in Thousands
 3 Months Ended 12 Months Ended
Dec. 29, 2019
USD ($)
NumberofEntities
Jun. 30, 2019
USD ($)
Apr. 01, 2018
USD ($)
Dec. 29, 2019
USD ($)
NumberofEntities
Dec. 30, 2018
USD ($)
Dec. 31, 2017
USD ($)
Dec. 29, 2019
CAD ($)
NumberofEntities
Jan. 31, 2018
USD ($)
Jun. 28, 2015
USD ($)
Debt Instrument                  
Letters of Credit Outstanding, Amount $ 25,106     $ 25,106          
Restricted cash 34,539     34,539 $ 29,860 $ 32,633      
Loss on early extinguishment of debt 1,346 $ 7,150 $ 11,475 8,496 11,475 0      
Interest Expense       115,971 119,618 118,059      
Series 2019-1 Class A-2-I Notes                  
Debt Instrument                  
Senior Notes $ 398,000 400,000   $ 398,000 0        
Debt Instrument, Interest Rate, Effective Percentage 4.00%     4.00%     4.00%    
Debt Instrument, Interest Rate, Stated Percentage 3.783%     3.783%     3.783%    
Series 2019-1 Class A-2-II Notes                  
Debt Instrument                  
Senior Notes $ 447,750 450,000   $ 447,750 0        
Debt Instrument, Interest Rate, Effective Percentage 4.20%     4.20%     4.20%    
Debt Instrument, Interest Rate, Stated Percentage 4.08%     4.08%     4.08%    
Series 2018-1 Class A-2-I Notes                  
Debt Instrument                  
Senior Notes $ 441,000     $ 441,000 445,500     $ 450,000  
Debt Instrument, Interest Rate, Effective Percentage 3.80%     3.80%     3.80%    
Debt Instrument, Interest Rate, Stated Percentage 3.573%     3.573%     3.573%    
Series 2018-1 Class A-2-II Notes                  
Debt Instrument                  
Senior Notes $ 465,500     $ 465,500 470,250     $ 475,000  
Debt Instrument, Interest Rate, Effective Percentage 4.10%     4.10%     4.10%    
Debt Instrument, Interest Rate, Stated Percentage 3.884%     3.884%     3.884%    
Series 2015-1 Class A-2-III Notes                  
Debt Instrument                  
Senior Notes $ 478,750     $ 478,750 483,750       $ 500,000
Debt Instrument, Interest Rate, Effective Percentage 4.70%     4.70%     4.70%    
Debt Instrument, Interest Rate, Stated Percentage 4.497%     4.497%     4.497%    
Series 2019-1 Senior Notes                  
Debt Instrument                  
Loss on early extinguishment of debt   $ 7,150              
Debt Issuance Costs, Gross $ 14,008     $ 14,008          
Series 2018-1 Senior Notes                  
Debt Instrument                  
Loss on early extinguishment of debt     $ 11,475            
Debt Issuance Costs, Gross         17,580 351      
Series 2015-1 Senior Notes                  
Debt Instrument                  
Debt Issuance Costs, Gross           561      
7% Debentures                  
Debt Instrument                  
Loss on early extinguishment of debt $ 1,346                
Debt Instrument, Interest Rate, Effective Percentage 8.60%     8.60%     8.60%    
Debt Instrument, Face Amount $ 100,000     $ 100,000          
Debt Instrument, Repurchased Face Amount $ 10,000     $ 10,000          
Debt Instrument, Interest Rate, Stated Percentage 7.00%     7.00%     7.00%    
Debt Instrument, Repurchase Amount $ 10,550     $ 10,550          
Line of Credit | Series 2019-1 Class A-1 Notes                  
Debt Instrument                  
Line of Credit Facility, Maximum Borrowing Capacity 150,000     150,000          
Line of Credit, Current 0     0          
Letter of Credit | Series 2019-1 Class A-1 Notes                  
Debt Instrument                  
Letters of Credit Outstanding, Amount 24,756     $ 24,756          
Minimum | Series 2019-1 Class A-1 Notes                  
Debt Instrument                  
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage       0.40%          
Maximum | Series 2019-1 Class A-1 Notes                  
Debt Instrument                  
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage       0.75%          
Restricted Cash                  
Debt Instrument                  
Restricted cash 34,539     $ 34,539 29,860        
Restricted Cash | Restricted Cash Held for Principal Interest and Fees                  
Debt Instrument                  
Restricted cash 34,209     34,209 29,538        
Premium | 7% Debentures                  
Debt Instrument                  
Debt Instrument, Repurchase Amount 500     500          
Transaction Fees | 7% Debentures                  
Debt Instrument                  
Debt Instrument, Repurchase Amount 50     50          
Wendy's U.S. Advertising Fund                  
Debt Instrument                  
Line of Credit Facility, Maximum Borrowing Capacity $ 25,000     25,000          
Proceeds from Lines of Credit       0 9,837        
Repayments of Lines of Credit       $ 0 11,124        
Canadian Subsidiary                  
Debt Instrument                  
Line of Credit Facility, Maximum Borrowing Capacity             $ 6,000    
Revolving Credit | NumberofEntities 1     1     1    
Corporate Debt Securities                  
Debt Instrument                  
Interest Expense       $ 105,829 $ 107,929 $ 108,472      
v3.19.3.a.u2
Long-Term Debt Assets Pledged as Collateral (Details)
$ in Thousands
Dec. 29, 2019
USD ($)
Assets Pledged as Collateral  
Assets pledged as collateral $ 1,232,149
Cash and cash equivalents  
Assets Pledged as Collateral  
Assets pledged as collateral 33,042
Restricted Cash and other assets (including long-term)  
Assets Pledged as Collateral  
Assets pledged as collateral 34,214
Accounts and notes receivable, net  
Assets Pledged as Collateral  
Assets pledged as collateral 31,879
Inventories  
Assets Pledged as Collateral  
Assets pledged as collateral 3,859
Properties  
Assets Pledged as Collateral  
Assets pledged as collateral 67,550
Other intangible assets  
Assets Pledged as Collateral  
Assets pledged as collateral $ 1,061,605
v3.19.3.a.u2
Fair Value Measurements Financial Instruments (Details) - USD ($)
$ in Thousands
Dec. 29, 2019
Dec. 30, 2018
Fair Value, Balance Sheet Grouping, Financial Statement Captions    
Other investments in equity securities $ 639 $ 639
Reported Value Measurement    
Fair Value, Balance Sheet Grouping, Financial Statement Captions    
Cash equivalents 114,992 222,228
Other investments in equity securities 639 639
Guarantees of franchisee loan obligations 1 17
Reported Value Measurement | Series 2019-1 Class A-2-I Notes    
Fair Value, Balance Sheet Grouping, Financial Statement Captions    
Debt instrument 398,000 0
Reported Value Measurement | Series 2019-1 Class A-2-II Notes    
Fair Value, Balance Sheet Grouping, Financial Statement Captions    
Debt instrument 447,750 0
Reported Value Measurement | Series 2018-1 Class A-2-I Notes    
Fair Value, Balance Sheet Grouping, Financial Statement Captions    
Debt instrument 441,000 445,500
Reported Value Measurement | Series 2018-1 Class A-2-II Notes    
Fair Value, Balance Sheet Grouping, Financial Statement Captions    
Debt instrument 465,500 470,250
Reported Value Measurement | Series 2015-1 Class A-2-II Notes    
Fair Value, Balance Sheet Grouping, Financial Statement Captions    
Debt instrument 0 870,750
Reported Value Measurement | Series 2015-1 Class A-2-III Notes    
Fair Value, Balance Sheet Grouping, Financial Statement Captions    
Debt instrument 478,750 483,750
Reported Value Measurement | 7% Debentures    
Fair Value, Balance Sheet Grouping, Financial Statement Captions    
Debt instrument 82,837 90,769
Estimate of Fair Value Measurement | Fair Value, Inputs, Level 1    
Fair Value, Balance Sheet Grouping, Financial Statement Captions    
Cash equivalents 114,992 222,228
Estimate of Fair Value Measurement | Fair Value, Inputs, Level 3    
Fair Value, Balance Sheet Grouping, Financial Statement Captions    
Other investments in equity securities 1,649 2,181
Guarantees of franchisee loan obligations 1 17
Estimate of Fair Value Measurement | Series 2019-1 Class A-2-I Notes | Fair Value, Inputs, Level 2    
Fair Value, Balance Sheet Grouping, Financial Statement Captions    
Debt instrument 405,152 0
Estimate of Fair Value Measurement | Series 2019-1 Class A-2-II Notes | Fair Value, Inputs, Level 2    
Fair Value, Balance Sheet Grouping, Financial Statement Captions    
Debt instrument 459,136 0
Estimate of Fair Value Measurement | Series 2018-1 Class A-2-I Notes | Fair Value, Inputs, Level 2    
Fair Value, Balance Sheet Grouping, Financial Statement Captions    
Debt instrument 444,859 424,026
Estimate of Fair Value Measurement | Series 2018-1 Class A-2-II Notes | Fair Value, Inputs, Level 2    
Fair Value, Balance Sheet Grouping, Financial Statement Captions    
Debt instrument 475,718 439,353
Estimate of Fair Value Measurement | Series 2015-1 Class A-2-II Notes | Fair Value, Inputs, Level 2    
Fair Value, Balance Sheet Grouping, Financial Statement Captions    
Debt instrument 0 865,342
Estimate of Fair Value Measurement | Series 2015-1 Class A-2-III Notes | Fair Value, Inputs, Level 2    
Fair Value, Balance Sheet Grouping, Financial Statement Captions    
Debt instrument 490,531 482,522
Estimate of Fair Value Measurement | 7% Debentures | Fair Value, Inputs, Level 2    
Fair Value, Balance Sheet Grouping, Financial Statement Captions    
Debt instrument $ 94,838 $ 102,750
v3.19.3.a.u2
Fair Value Measurements Non-Recurring Fair Value Measurements (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Fair Value, Assets and Liabilities Measured on Nonrecurring Basis      
Held and used, Total losses $ 5,602 $ 4,343  
Held for sale, Total losses 1,397 354  
Impairment of long-lived assets 6,999 4,697 $ 4,097
Fair Value, Measurements, Nonrecurring      
Fair Value, Assets and Liabilities Measured on Nonrecurring Basis      
Assets Held and used, Long Lived, Fair Value Disclosure 3,582 462  
Assets Held for sale, Long Lived, Fair Value Disclosure 988 1,031  
Total 4,570 1,493  
Fair Value, Measurements, Nonrecurring | Fair Value, Inputs, Level 1      
Fair Value, Assets and Liabilities Measured on Nonrecurring Basis      
Assets Held and used, Long Lived, Fair Value Disclosure 0 0  
Assets Held for sale, Long Lived, Fair Value Disclosure 0 0  
Total 0 0  
Fair Value, Measurements, Nonrecurring | Fair Value, Inputs, Level 2      
Fair Value, Assets and Liabilities Measured on Nonrecurring Basis      
Assets Held and used, Long Lived, Fair Value Disclosure 0 0  
Assets Held for sale, Long Lived, Fair Value Disclosure 0 0  
Total 0 0  
Fair Value, Measurements, Nonrecurring | Fair Value, Inputs, Level 3      
Fair Value, Assets and Liabilities Measured on Nonrecurring Basis      
Assets Held and used, Long Lived, Fair Value Disclosure 3,582 462  
Assets Held for sale, Long Lived, Fair Value Disclosure 988 1,031  
Total $ 4,570 $ 1,493  
v3.19.3.a.u2
Income Taxes Income from Operations before Income Tax (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Income before income taxes      
Domestic $ 160,474 $ 560,776 $ 86,892
Foreign 11,007 14,140 14,127
Income before income taxes $ 171,481 $ 574,916 $ 101,019
v3.19.3.a.u2
Income Taxes (Provision For) Benefit from Continuing Operations (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Current:      
U.S. federal $ (18,421) $ (109,078) $ (13,092)
State (6,093) (2,661) (4,055)
Foreign (9,190) (9,630) (9,173)
Current tax provision (33,704) (121,369) (26,320)
Deferred:      
U.S. federal 1,585 5,071 127,592
State (2,449) 441 (7,729)
Foreign 27 1,056 (533)
Deferred tax (provision) benefit (837) 6,568 119,330
Income tax (provision) benefit $ (34,541) $ (114,801) $ 93,010
v3.19.3.a.u2
Income Taxes Deferred Tax Assets (Liabilities) (Details) - USD ($)
$ in Thousands
Dec. 29, 2019
Dec. 30, 2018
Deferred Tax Assets    
Operating and finance lease liabilities $ 345,173 $ 115,322
Net operating loss and credit carryforwards 59,597 59,690
Unfavorable leases 26,020 35,801
Deferred revenue 23,907 23,904
Accrued compensation and related benefits 18,477 14,804
Accrued expenses and reserves 13,786 14,840
Deferred rent 492 16,807
Other 3,757 5,016
Valuation allowances (45,183) (42,175)
Total deferred tax assets 446,026 244,009
Deferred Tax Liabilities    
Operating and finance lease assets (313,803) (56,798)
Intangible assets (311,596) (324,394)
Fixed assets (60,788) (105,545)
Other (30,598) (26,432)
Total deferred tax liabilities (716,785) (513,169)
Total deferred tax liabilities, net $ (270,759) $ (269,160)
v3.19.3.a.u2
Income Taxes Income Taxes Net Operating Losses and Tax Credits (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Summary of Net Operating Loss and Tax Credit Carryforwards      
Tax Credit Carryforward, Amount $ 14,984    
Net Operating Loss Carryforwards 1,161,276    
Deferred Tax Assets, Valuation Allowance 45,183 $ 42,175  
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount $ 3,008 $ (5,120) $ 35,895
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent 21.00% 21.00% 35.00%
Domestic Tax Authority      
Summary of Net Operating Loss and Tax Credit Carryforwards      
Tax Credit Carryforward, Amount $ 10,429    
State and Local Jurisdiction      
Summary of Net Operating Loss and Tax Credit Carryforwards      
Tax Credit Carryforward, Amount 563    
Net Operating Loss Carryforwards 1,161,051    
Foreign Tax Authority      
Summary of Net Operating Loss and Tax Credit Carryforwards      
Tax Credit Carryforward, Amount 3,992    
Net Operating Loss Carryforwards $ 225    
Tax Act      
Summary of Net Operating Loss and Tax Credit Carryforwards      
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount   $ (7,535)  
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent 21.00%   35.00%
v3.19.3.a.u2
Income Taxes Major Tax Legislation (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Major Tax Legislation [Abstract]      
Income Taxes Receivable, Current $ 13,555 $ 14,475  
Income Taxes Receivable, Noncurrent $ 0 $ 0  
Major Tax Legislation      
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent 21.00% 21.00% 35.00%
Income tax (provision) benefit $ (34,541) $ (114,801) $ 93,010
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Amount $ 0 0 $ 164,893
Tax Act      
Major Tax Legislation      
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent 21.00%   35.00%
Income tax (provision) benefit   (2,159) $ 140,379
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Amount   (2,426) 164,893
Expense (benefit) International-Related Provisions     $ 22,209
Effective Income Tax Rate Reconciliation, Other Adjustments, Amount   (2,454)  
Nondeductible expense related to certain executive compensation   991  
Tax Credit, Foreign, Amount   $ 1,286  
v3.19.3.a.u2
Income Taxes Income Taxes Effective Tax Rate Reconciliation (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Effective Income Tax Rate Reconciliation      
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent 21.00% 21.00% 35.00%
Income tax provision at the U.S. federal statutory rate $ (36,011) $ (120,732) $ (35,357)
State income tax provision, net of U.S. federal income tax effect (6,470) (221) (6,451)
Federal rate change 0 0 164,893
Prior years' tax matters 6,135 (9,970) 15,964
Excess federal tax benefits from share-based compensation 5,841 10,250 5,196
Domestic tax planning initiatives 0 0 4,282
Foreign and U.S. tax effects of foreign operations 250 (856) 2,408
Valuation allowances (2,833) 5,120 (35,895)
Non-deductible goodwill 0 (41) (15,458)
Transition tax 0 0 (4,446)
Unrepatriated earnings (402) (326) (1,801)
Non-deductible expenses and other (1,051) 1,975 (325)
Income tax (provision) benefit (34,541) (114,801) 93,010
Current State and Local Tax Expense (Benefit) 6,093 2,661 4,055
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount $ 3,008 (5,120) $ 35,895
Tax Act      
Effective Income Tax Rate Reconciliation      
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent 21.00%   35.00%
Federal rate change   (2,426) $ 164,893
Prior years' tax matters   (9,542)  
Transition tax     (4,446)
Unrepatriated earnings     (1,801)
Income tax (provision) benefit   (2,159) 140,379
Nondeductible expense related to certain executive compensation   (991)  
Current State and Local Tax Expense (Benefit)   28  
Tax Credit, Foreign, Amount   1,286  
Tax Credit Carryforward, Valuation Allowance     15,962
Other Tax Expense (Benefit)     2,305
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount   $ (7,535)  
Prior Year Tax Matters      
Effective Income Tax Rate Reconciliation      
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount     13,667
Deferred Tax Assets, Net     $ 16,643
v3.19.3.a.u2
Income Taxes Unrecognized Tax Benefits (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Income Tax Contingency      
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns $ 17,987    
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns      
Unrecognized Tax Benefits, Beginning Balance 27,632 $ 28,848 $ 19,545
Tax positions of current year, additions 1,356 3,874 8,251
Tax positions of prior years, additions 0 2,598 1,704
Tax positions of prior years, reductions (227) (7,553) (295)
Settlements, reductions 0 (21) (34)
Lapse of statute of limitations, reductions (6,438) (114) (323)
Unrecognized Tax Benefits, Ending Balance 22,323 27,632 28,848
Significant Change in Unrecognized Tax Benefits is Reasonably Possible, Estimated Range of Change, Upper Bound 1,661    
Unrecognized Tax Benefits, Interest on Income Taxes Expense (489) (12) 161
Unrecognized Tax Benefits, Income Tax Penalties Income 81 309 $ 106
Unrecognized Tax Benefits, Interest on Income Taxes Accrued 946 1,428  
Unrecognized Tax Benefits, Income Tax Penalties Accrued $ 118 $ 199  
v3.19.3.a.u2
Stockholders' Equity (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
 2 Months Ended 3 Months Ended 12 Months Ended
Feb. 29, 2020
Nov. 30, 2019
Dec. 30, 2018
Nov. 30, 2018
Feb. 18, 2020
Feb. 29, 2020
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Feb. 28, 2019
Feb. 28, 2018
Feb. 28, 2017
Common Stock, Dividends, Per Share, Cash Paid             $ 0.42 $ 0.34 $ 0.28      
Number of Shares, beginning of year         470,424   470,424 470,424 470,424      
Number of Shares, end of year     470,424       470,424 470,424 470,424      
Stockholders' Equity Activity                        
Number of Shares at beginning of year         245,535   239,191          
Number of Shares at end of year     239,191       245,535 239,191        
Preferred Stock, Shares Authorized     100,000       100,000 100,000 100,000      
Preferred Stock, Shares Issued     0       0 0 0      
February 2019 Share Repurchase Program                        
Stockholders' Equity Activity                        
Stock Repurchase Program, Authorized Amount                   $ 225,000    
Stock Repurchase Program, Remaining Authorized Repurchase Amount             $ 43,772          
February 2019 Share Repurchase Program | Subsequent Event                        
Stockholders' Equity Activity                        
Repurchases of common stock         1,312              
Treasury Stock, Value, Acquired, Cost Method, excluding Commissions         $ 28,770              
Stock Repurchase Program, Cost Incurred         $ 18              
February 2020 Share Repurchase Program | Subsequent Event                        
Stockholders' Equity Activity                        
Stock Repurchase Program, Authorized Amount $ 100,000         $ 100,000            
2019 Accelerated Share Repurchase Program                        
Stockholders' Equity Activity                        
Repurchases of common stock   4,051                    
Stock Repurchase Program, Authorized Amount   $ 100,000                    
Initial Shares Delivered Under ASR Agreement Percentage   85.00%                    
2019 Accelerated Share Repurchase Program | Subsequent Event                        
Stockholders' Equity Activity                        
Repurchases of common stock 628         4,679            
Treasury Stock Acquired, Average Cost Per Share           $ 21.37            
November 2018 and February 2019 Share Repurchase Programs                        
Stockholders' Equity Activity                        
Repurchases of common stock             6,107          
Treasury Stock, Value, Acquired, Cost Method, excluding Commissions             $ 117,685          
Stock Repurchase Program, Repurchase Accrual             1,801          
Stock Repurchase Program, Cost Incurred             $ 86          
November 2018 Share Repurchase Program                        
Stockholders' Equity Activity                        
Stock Repurchase Program, Authorized Amount       $ 220,000                
February 2018 Share Repurchase Program                        
Stockholders' Equity Activity                        
Stock Repurchase Program, Authorized Amount                     $ 175,000  
2018 Accelerated Share Repurchase Program                        
Stockholders' Equity Activity                        
Repurchases of common stock     720 3,645                
Stock Repurchase Program, Authorized Amount       $ 75,000                
Initial Shares Delivered Under ASR Agreement Percentage       85.00%                
February and November 2018 Share Repurchase Programs                        
Stockholders' Equity Activity                        
Repurchases of common stock               10,058        
Treasury Stock, Value, Acquired, Cost Method, excluding Commissions               $ 172,584        
Stock Repurchase Program, Repurchase Accrual     $ 1,827         1,827        
Stock Repurchase Program, Cost Incurred               $ 141        
February 2017 Share Repurchase Program                        
Stockholders' Equity Activity                        
Repurchases of common stock               1,385 8,607      
Stock Repurchase Program, Authorized Amount                       $ 150,000
Treasury Stock, Value, Acquired, Cost Method, excluding Commissions               $ 22,633 $ 127,367      
Stock Repurchase Program, Repurchase Accrual                 1,259      
Stock Repurchase Program, Cost Incurred               $ 19 $ 123      
Common Stock Held in Treasury                        
Stockholders' Equity Activity                        
Number of Shares at beginning of year         245,535   239,191 229,912 223,850      
Repurchases of common stock             10,158 15,808 8,607      
Common shares issued, stock options, net             (2,912) (5,824) (1,853)      
Common shares issued, restricted stock, net             (834) (627) (612)      
Common shares issued, Director fees             (14) (15) (15)      
Common shares issued, Other             (54) (63) (65)      
Number of Shares at end of year     239,191       245,535 239,191 229,912      
v3.19.3.a.u2
Stockholders' Equity Accumulated Other Comprehensive Income (Details)
$ in Thousands
 12 Months Ended
Dec. 29, 2019
USD ($)
Dec. 30, 2018
USD ($)
Pension_Plans
Dec. 31, 2017
USD ($)
Jan. 03, 2016
cash_flow_hedge
Jan. 01, 2017
USD ($)
Accumulated Other Comprehensive Income (Loss)          
Number of cash flow hedges terminated in period | cash_flow_hedge       7  
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, Net of Tax     $ 1,797    
Accumulated other comprehensive loss $ (53,828) $ (61,673) (46,198)   $ (63,241)
Current-period other comprehensive income (loss) 7,845 (15,475) 17,043    
Interest Expense          
Accumulated Other Comprehensive Income (Loss)          
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, before Tax     2,894    
Provision for income taxes          
Accumulated Other Comprehensive Income (Loss)          
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, Tax     (1,097)    
Accumulated Translation Adjustment          
Accumulated Other Comprehensive Income (Loss)          
Accumulated other comprehensive loss (53,828) (61,673) (45,149)   (60,299)
Current-period other comprehensive income (loss) 7,845 (16,524) 15,150    
Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges          
Accumulated Other Comprehensive Income (Loss)          
Accumulated other comprehensive loss 0 0 0   (1,797)
Current-period other comprehensive income (loss) 0 0 1,797    
Accumulated Defined Benefit Plans Adjustment          
Accumulated Other Comprehensive Income (Loss)          
Accumulated other comprehensive loss 0 0 (1,049)   $ (1,145)
Current-period other comprehensive income (loss) $ 0 $ 1,049 $ 96    
Pension Plans, Defined Benefit          
Accumulated Other Comprehensive Income (Loss)          
Defined Benefit Plans, Number of Plans | Pension_Plans   2      
v3.19.3.a.u2
Share-Based Compensation Summary (Details)
shares in Thousands
Dec. 29, 2019
shares
2010 Plan  
Share-based Compensation Arrangement by Share-based Payment Award  
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant 22,440
v3.19.3.a.u2
Share-Based Compensation Stock Options (Details) - Stock Options - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
 12 Months Ended
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award      
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period 10 years    
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period 3 years    
Share-based Compensation, Options, Outstanding      
Outstanding, beginning of period 12,677    
Granted 2,622    
Exercised (2,934)    
Forfeited and/or expired (428)    
Outstanding, end of period 11,937 12,677  
Vested or expected to vest, end of period 11,814    
Exercisable, end of period 7,482    
Weighted average exercise price, outstanding at beginning of period $ 11.86    
Weighted average exercise price, granted 19.71    
Weighted average exercise price, exercised 9.75    
Weighted average exercise price, forfeited and/or expired 16.77    
Weighted average exercise price, outstanding at end of period 13.92 $ 11.86  
Weighted average exercise price, vested or expected to vest 13.87    
Weighted average exercise price, exercisable $ 11.05    
Weighted average remaining contractual life in years, outstanding 6 years 9 months 7 days    
Weighted average remaining contractual life in years, vested or expected to vest 6 years 9 months    
Weighted average remaining contractual life in years, exercisable 5 years 5 months 8 days    
Aggregate intrinsic value, outstanding $ 98,316    
Aggregate intrinsic value, vested or expected to vest 97,896    
Aggregate intrinsic value, exercisable 83,113    
Total intrinsic value, exercises in period $ 26,947 $ 62,744 $ 14,624
Weighted average grant date fair value, granted $ 3.40 $ 4.12 $ 3.12
Fair Value Assumptions and Methodology      
Risk-free interest rate 1.57% 2.77% 1.94%
Expected option life in years 4 years 6 months 5 years 7 months 13 days 5 years 7 months 13 days
Expected volatility 23.55% 24.27% 23.88%
Expected dividend yield 2.03% 1.84% 1.82%
v3.19.3.a.u2
Share-Based Compensation Restricted Shares (Details) - Restricted Stock - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
 12 Months Ended
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Share-based Compensation, Restricted Stock, Nonvested, Number of Shares      
Non-vested, beginning of period 1,321    
Granted 358    
Vested (521)    
Forfeited (87)    
Non-vested, end of period 1,071 1,321  
Weighted average grant date fair value, non-vested, beginning of period $ 13.65    
Weighted average grant date fair value, granted 19.51    
Weighted average grant date fair value, vested 11.45    
Weighted average grant date fair value, forfeited 15.78    
Weighted average grant date fair value, non-vested, end of period $ 16.46 $ 13.65  
Total fair value, vested in period $ 9,996 $ 10,060 $ 10,004
Minimum      
Share-based Compensation Arrangement by Share-based Payment Award      
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period 1 year    
Maximum      
Share-based Compensation Arrangement by Share-based Payment Award      
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period 3 years    
v3.19.3.a.u2
Share-Based Compensation Performance Shares (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
 12 Months Ended
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Share-based Compensation, Performance Shares, Nonvested, Number of Shares      
Weighted average grant date fair value, dividend equivalent units issued $ 0    
Performance Condition Award      
Share-based Compensation, Performance Shares, Nonvested, Number of Shares      
Non-vested, beginning of period 598    
Granted 155    
Dividend equivalent units issued 10    
Vested (278)    
Forfeited (46)    
Non-vested, end of period 439 598  
Weighted average grant date fair value, non-vested, beginning of period $ 12.32    
Weighted average grant date fair value, granted 17.85    
Weighted average grant date fair value, dividend equivalent units issued 0    
Weighted average grant date fair value, vested 9.44    
Weighted average grant date fair value, forfeited 16.13    
Weighted average grant date fair value, non-vested, end of period $ 15.75 $ 12.32  
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period Incremental Above Target 169    
Total fair value, vested in period $ 7,720 $ 3,681 $ 5,666
Market Condition Performance Award      
Share-based Compensation Arrangement by Share-based Payment Award      
Risk-free interest rate 2.51% 2.38% 1.44%
Expected life in years 3 years 3 years 3 years
Expected volatility 23.19% 24.97% 25.06%
Expected dividend yield 0.00% 0.00% 0.00%
Share-based Compensation, Performance Shares, Nonvested, Number of Shares      
Non-vested, beginning of period 518    
Granted 130    
Dividend equivalent units issued 8    
Vested (256)    
Forfeited (38)    
Non-vested, end of period 362 518  
Weighted average grant date fair value, non-vested, beginning of period $ 14.22    
Weighted average grant date fair value, granted 21.36    
Weighted average grant date fair value, dividend equivalent units issued 0    
Weighted average grant date fair value, vested 10.25    
Weighted average grant date fair value, forfeited 19.56    
Weighted average grant date fair value, non-vested, end of period $ 19.09 $ 14.22  
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period Incremental Above Target 157    
Total fair value, vested in period $ 7,135 $ 3,143 $ 0
Minimum      
Share-based Compensation Arrangement by Share-based Payment Award      
Performance Shares Vesting Range, Percentage of Target 0.00%    
Maximum      
Share-based Compensation Arrangement by Share-based Payment Award      
Performance Shares Vesting Range, Percentage of Target 200.00%    
v3.19.3.a.u2
Share-Based Compensation Modifications of Share-Based Awards (Details)
$ in Thousands
 12 Months Ended
Dec. 29, 2019
USD ($)
employees
Dec. 30, 2018
USD ($)
employees
Dec. 31, 2017
USD ($)
employees
Share-based Compensation Arrangement by Share-based Payment Award      
Number of employees subject to modification | employees 10 8 31
Reorganization and realignment      
Share-based Compensation Arrangement by Share-based Payment Award      
Increase in employee share-based compensation due to award modification | $ $ 1,011 $ 1,238 $ 4,930
v3.19.3.a.u2
Share-Based Compensation Share-based Compensation Expense (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Employee Service Share-based Compensation, Allocation of Recognized Period Costs      
Share-based compensation $ 18,676 $ 17,918 $ 20,928
Less: Income tax benefit 2,990 3,418 4,985
Share-based compensation, net of income tax benefit 15,686 14,500 15,943
Total share-based compensation not yet recognized, non-vested awards $ 20,978    
Total share-based compensation not yet recognized, period for recognition, non-vested awards 2 years 1 month 9 days    
Stock Options      
Employee Service Share-based Compensation, Allocation of Recognized Period Costs      
Share-based compensation $ 7,685 7,172 6,923
Restricted Stock      
Employee Service Share-based Compensation, Allocation of Recognized Period Costs      
Share-based compensation 5,762 6,030 5,778
Performance Condition Award      
Employee Service Share-based Compensation, Allocation of Recognized Period Costs      
Share-based compensation 2,195 1,491 1,764
Market Condition Performance Award      
Employee Service Share-based Compensation, Allocation of Recognized Period Costs      
Share-based compensation 2,023 1,987 1,533
Modified Awards      
Employee Service Share-based Compensation, Allocation of Recognized Period Costs      
Share-based compensation 1,011 1,238 4,930
Reorganization and realignment      
Employee Service Share-based Compensation, Allocation of Recognized Period Costs      
Share-based compensation $ 396 $ 319 $ 197
v3.19.3.a.u2
Impairment of Long-Lived Assets (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Impairment of Long-Lived Assets      
Impairment of long-lived assets $ 6,999 $ 4,697 $ 4,097
Restaurants leased or subleased to franchisees      
Impairment of Long-Lived Assets      
Impairment of long-lived assets 5,308 283 244
Company-operated restaurants      
Impairment of Long-Lived Assets      
Impairment of long-lived assets 294 4,060 3,169
Surplus properties      
Impairment of Long-Lived Assets      
Impairment of long-lived assets $ 1,397 $ 354 $ 684
v3.19.3.a.u2
Investment Income, Net (Details) - USD ($)
$ in Thousands
 3 Months Ended 12 Months Ended
Oct. 31, 2019
Aug. 31, 2018
Dec. 29, 2019
Sep. 30, 2018
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Net Investment Income              
Gain on sale of investment         $ 24,496 $ 450,000 $ 2,570
Other than Temporary Impairment Losses, Investments         0 0 258
Other, net         1,102 736 391
Investment income, net     $ 24,599 $ 450,133 25,598 450,736 2,703
Proceeds from sale of investment         $ 24,496 $ 450,000 $ 4,111
Other investments in equity securities              
Net Investment Income              
Proceeds from sale of investment $ 25,000            
Other investments in equity securities | Investment Income              
Net Investment Income              
Gain on sale of investment 24,366            
Other investments in equity securities | General and administrative              
Net Investment Income              
Gain on sale of investment $ 634            
Inspire Brands, Inc              
Net Investment Income              
Gain on sale of investment   $ 450,000          
v3.19.3.a.u2
Retirement Benefit Plans Defined Contribution Plan (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Defined Contribution Plan      
Defined Contribution Plan, Maximum Annual Contribution Per Employee, Percent 75.00%    
Defined Contribution Plan, Employer Matching Contribution, Percent 4.00%    
Defined Contribution Plan, Cost $ 4,631 $ 4,619 $ 4,704
v3.19.3.a.u2
Retirement Benefit Plans Defined Benefit Plans (Details)
$ in Thousands
 1 Months Ended 12 Months Ended
Jul. 31, 2011
USD ($)
Dec. 29, 2019
USD ($)
Dec. 30, 2018
USD ($)
Pension_Plans
G&A Realignment | Termination of defined benefit plans      
Defined Benefit Plan Disclosure      
Restructuring and Related Cost, Incurred Cost     $ 1,335
Pension Plans, Defined Benefit      
Defined Benefit Plan Disclosure      
Defined Benefit Plans, Number of Plans | Pension_Plans     2
Defined Benefit Plan, Amortization of Prior Service Cost   $ 0  
Arby's Restaurant Group, Inc | Pension Plans, Defined Benefit      
Defined Benefit Plan Disclosure      
Defined Benefit Plan, Proceeds Received from Buyer for Unfunded Liability $ 400    
v3.19.3.a.u2
Retirement Benefit Plans Executive Plan (Details) - Supplemental Employee Retirement Plans, Defined Benefit - USD ($)
$ in Thousands
Dec. 29, 2019
Dec. 30, 2018
Defined Benefit Plans and Other Postretirement Benefit Plans    
Liability, Defined Benefit Plan $ 662 $ 1,257
Deferred Compensation Arrangements, Recorded Liability $ 774 $ 444
v3.19.3.a.u2
Leases Lessee Lease Narrative (Details)
Dec. 29, 2019
number_of_restaurants
Lessee, Lease, Description  
Number of restaurants 6,788
Entity Operated Units  
Lessee, Lease, Description  
Number of restaurants 357
Land And Building - Company Owned | Entity Operated Units  
Lessee, Lease, Description  
Number of restaurants 143
Building - Company Owned; Land - Leased | Entity Operated Units  
Lessee, Lease, Description  
Number of restaurants 145
Land And Building - Leased | Entity Operated Units  
Lessee, Lease, Description  
Number of restaurants 69
v3.19.3.a.u2
Leases Lessor Lease Narrative (Details)
Dec. 29, 2019
number_of_restaurants
Lessor, Lease, Description  
Number of restaurants 6,788
Franchised Units  
Lessor, Lease, Description  
Number of restaurants 6,431
Land And Building - Company Owned | Franchised Units  
Lessor, Lease, Description  
Number of restaurants 512
Land And Building - Leased | Franchised Units  
Lessor, Lease, Description  
Number of restaurants 1,248
v3.19.3.a.u2
Leases Components of Lease Cost (Details)
$ in Thousands
 12 Months Ended
Dec. 29, 2019
USD ($)
Finance Lease, Cost  
Amortization of finance lease assets $ 11,241
Interest on finance lease liabilities 37,012
Total finance lease cost 48,253
Lease, Cost  
Operating lease cost 90,537
Variable lease cost 58,978
Short-term lease cost 4,717
Total operating lease cost 154,232
Total lease cost 202,485
Franchise rental expense  
Lease, Cost  
Franchise rental expense 123,899
Cost of sales  
Lease, Cost  
Total operating lease cost 27,419
Executory costs paid by lessee  
Lease, Cost  
Variable lease cost $ 37,758
v3.19.3.a.u2
Leases Components of Operating Lease Cost (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 30, 2018
Dec. 31, 2017
Operating Leased Assets    
Rental expense, Minimum rentals $ 95,749 $ 90,889
Rental expense, Contingent rentals 18,971 19,021
Total rental expense $ 114,720 $ 109,910
v3.19.3.a.u2
Leases Capital Leases, Balance Sheet and Other Information (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 30, 2018
Dec. 31, 2017
Capital Leased Assets    
Capital Leases, Accumulated Amortization $ 33,187  
Capital Leases, Income Statement of Lessee    
Capital Leases, Income Statement, Amortization Expense $ 11,603 $ 9,025
v3.19.3.a.u2
Leases Supplemental Cash Flow and Non-cash Information (Details)
$ in Thousands
 12 Months Ended
Dec. 29, 2019
USD ($)
Cash Flow, Operating Activities, Lessee  
Operating cash flows from finance leases $ 39,887
Operating cash flows from operating leases 91,824
Cash Flow, Financing Activities, Lessee  
Financing cash flows from finance leases 6,835
Lessee, Lease, Description  
Right-of-use assets obtained in exchange for finance lease liabilities 50,061
Right-of-use asset obtained in exchange for operating lease liabilities $ 15,411
v3.19.3.a.u2
Leases Supplemental Information (Details)
$ in Thousands
Dec. 29, 2019
USD ($)
Lessee, Lease, Description  
Weighted-average remaining lease term (years): Finance leases 17 years 1 month 6 days
Weighted-average remaining lease term (years): Operating leases 15 years 4 months 24 days
Weighted-average discount rate: Finance leases 9.87%
Weighted-average discount rate: Operating leases 5.09%
Finance lease assets, gross $ 242,889
Accumulated amortization (42,745)
Finance lease assets 200,144
Operating lease assets $ 857,199
v3.19.3.a.u2
Leases Future Minimum Rental Payments for Non-cancelable Leases (Details) - USD ($)
$ in Thousands
Dec. 29, 2019
Dec. 30, 2018
Finance Lease Liabilities, Payments, Due    
Capital Lease Obligations, Current   $ 8,405
Capital Lease Obligations, Noncurrent   447,231
Entity Operated Units    
Finance Lease Liabilities, Payments, Due    
Future minimum finance lease payments, next twelve months $ 3,088  
Future minimum finance lease payments, due year two 3,220  
Future minimum finance lease payments, due year three 3,270  
Future minimum finance lease payments, due year four 3,223  
Future minimum finance lease payments, due year five 3,316  
Future minimum finance lease payments, due after year five 40,096  
Total minimum finance lease payments 56,213  
Interest incurred on total minimum finance lease payments (24,543)  
Present value of minimum finance lease payments 31,670  
Rental Payments, Capital Leases, 2019   1,962
Rental Payments, Capital Leases, 2020   1,978
Rental Payments, Capital Leases, 2021   2,082
Rental Payments, Capital Leases, 2022   2,114
Rental Payments, Capital Leases, 2023   2,084
Rental Payments, Capital Leases, Thereafter   23,558
Rental Payments, Capital Leases, Total minimum payments   33,778
Less interest   (16,874)
Present value of minimum capital lease payments   16,904
Operating Lease Liabilities, Payments Due    
Future minimum operating lease payments, next twelve months 19,971  
Future minimum operating lease payments, due year two 19,783  
Future minimum operating lease payments, due year three 19,473  
Future minimum operating lease payments, due year four 19,439  
Future minimum operating lease payments, due year five 19,385  
Future minimum operating lease payments, due after year five 183,460  
Total minimum operating lease payments 281,511  
Interest incurred on total minimum operating lease payments (86,422)  
Present value of minimum operating lease payments 195,089  
Rental Payments, Operating Leases, 2019   20,174
Rental Payments, Operating Leases, 2020   20,052
Rental Payments, Operating Leases, 2021   19,820
Rental Payments, Operating Leases, 2022   19,530
Rental Payments, Operating Leases, 2023   19,430
Rental Payments, Operating Leases, Thereafter   203,073
Rental Payments, Operating Leases, Total minimum payments   302,079
Franchised Units    
Finance Lease Liabilities, Payments, Due    
Future minimum finance lease payments, next twelve months 47,041  
Future minimum finance lease payments, due year two 46,932  
Future minimum finance lease payments, due year three 48,079  
Future minimum finance lease payments, due year four 49,709  
Future minimum finance lease payments, due year five 50,069  
Future minimum finance lease payments, due after year five 664,005  
Total minimum finance lease payments 905,835  
Interest incurred on total minimum finance lease payments (445,653)  
Present value of minimum finance lease payments 460,182  
Rental Payments, Capital Leases, 2019   45,125
Rental Payments, Capital Leases, 2020   43,969
Rental Payments, Capital Leases, 2021   45,522
Rental Payments, Capital Leases, 2022   46,573
Rental Payments, Capital Leases, 2023   48,109
Rental Payments, Capital Leases, Thereafter   676,139
Rental Payments, Capital Leases, Total minimum payments   905,437
Less interest   (466,705)
Present value of minimum capital lease payments   438,732
Operating Lease Liabilities, Payments Due    
Future minimum operating lease payments, next twelve months 70,301  
Future minimum operating lease payments, due year two 70,272  
Future minimum operating lease payments, due year three 70,176  
Future minimum operating lease payments, due year four 70,026  
Future minimum operating lease payments, due year five 69,901  
Future minimum operating lease payments, due after year five 755,026  
Total minimum operating lease payments 1,105,702  
Interest incurred on total minimum operating lease payments (359,279)  
Present value of minimum operating lease payments 746,423  
Rental Payments, Operating Leases, 2019   75,703
Rental Payments, Operating Leases, 2020   73,320
Rental Payments, Operating Leases, 2021   73,167
Rental Payments, Operating Leases, 2022   73,300
Rental Payments, Operating Leases, 2023   73,377
Rental Payments, Operating Leases, Thereafter   854,964
Rental Payments, Operating Leases, Total minimum payments   1,223,831
Current portion of finance lease liabilities    
Finance Lease Liabilities, Payments, Due    
Present value of minimum finance lease payments 11,005  
Capital Lease Obligations, Current   8,405
Long-term finance lease liabilities    
Finance Lease Liabilities, Payments, Due    
Present value of minimum finance lease payments 480,847  
Capital Lease Obligations, Noncurrent   $ 447,231
Current portion of operating lease liabilities    
Operating Lease Liabilities, Payments Due    
Present value of minimum operating lease payments 43,775  
Long-term operating lease liabilities    
Operating Lease Liabilities, Payments Due    
Present value of minimum operating lease payments $ 897,737  
v3.19.3.a.u2
Leases Components of Lease Income (Details)
$ in Thousands
 12 Months Ended
Dec. 29, 2019
USD ($)
Lessor Lease Income  
Sales-type leases, selling profit $ 2,285
Sales-type and direct-financing leases, interest income 26,333
Operating lease rental income 176,629
Variable lease income 56,436
Franchise rental income 233,065
Sublease income 171,126
Executory costs paid to lessor  
Lessor Lease Income  
Variable lease income $ 37,739
v3.19.3.a.u2
Leases Components of Prior Year Lease Income (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 30, 2018
Dec. 31, 2017
Leases [Abstract]    
Interest income from direct financing leases $ 27,638 $ 22,869
Operating Leased Assets    
Rental income, Minimum rentals 184,154 169,857
Rental income, Contingent rentals 19,143 20,246
Total rental income 203,297 190,103
Sublease income $ 138,363 $ 126,814
v3.19.3.a.u2
Leases Future Minimum Rental Receipts for Non-cancelable Leases (Details) - USD ($)
$ in Thousands
Dec. 29, 2019
Dec. 30, 2018
Direct Financing Lease, Net Investment in Leases    
Net investment in unguaranteed residual assets $ 197  
Subleases, sales-type and direct financing    
Sales-type and Direct Financing Leases, Lease Receivable, Fiscal Year Maturity    
Future minimum sales-type and direct financing lease receipts, next twelve months 28,948  
Future minimum sales-type and direct financing lease receipts, due year two 30,066  
Future minimum sales-type and direct financing lease receipts, due year three 30,741  
Future minimum sales-type and direct financing lease receipts, due year four 31,780  
Future minimum sales-type and direct financing lease receipts, due year five 32,081  
Future minimum sales-type and direct financing lease receipts, due after year five 461,553  
Total future minimum sales-type and direct financing lease receipts 615,169  
Unearned interest on total minimum sales-type and direct financing lease receipts (371,918)  
Present value of minimum sales-type and direct financing lease receipts 243,251  
Rental Receipts, Capital Leases, 2019   $ 26,239
Rental Receipts, Capital Leases, 2020   26,859
Rental Receipts, Capital Leases, 2021   27,904
Rental Receipts, Capital Leases, 2022   28,563
Rental Receipts, Capital Leases, 2023   29,512
Rental Receipts, Capital Leases, Thereafter   448,851
Rental Receipts, Capital Leases, Total future minimum receipts   587,928
Rental Receipts, Capital Leases, Unearned interest income   (377,046)
Rental Receipts, Capital Leases, Net investment in direct financing leases   210,882
Owned properties, sales-type and direct financing    
Sales-type and Direct Financing Leases, Lease Receivable, Fiscal Year Maturity    
Future minimum sales-type and direct financing lease receipts, next twelve months 2,036  
Future minimum sales-type and direct financing lease receipts, due year two 2,068  
Future minimum sales-type and direct financing lease receipts, due year three 2,148  
Future minimum sales-type and direct financing lease receipts, due year four 2,192  
Future minimum sales-type and direct financing lease receipts, due year five 2,200  
Future minimum sales-type and direct financing lease receipts, due after year five 24,915  
Total future minimum sales-type and direct financing lease receipts 35,559  
Unearned interest on total minimum sales-type and direct financing lease receipts (19,058)  
Present value of minimum sales-type and direct financing lease receipts 16,501  
Rental Receipts, Capital Leases, 2019   1,937
Rental Receipts, Capital Leases, 2020   2,006
Rental Receipts, Capital Leases, 2021   2,043
Rental Receipts, Capital Leases, 2022   2,119
Rental Receipts, Capital Leases, 2023   2,159
Rental Receipts, Capital Leases, Thereafter   26,404
Rental Receipts, Capital Leases, Total future minimum receipts   36,668
Rental Receipts, Capital Leases, Unearned interest income   (20,338)
Rental Receipts, Capital Leases, Net investment in direct financing leases   16,330
Subleases, operating    
Lessor, Operating Lease, Payments, Fiscal Year Maturity    
Future minimum operating lease receipts, next twelve months 110,212  
Future minimum operating lease receipts, due year two 111,232  
Future minimum operating lease receipts, due year three 112,198  
Future minimum operating lease receipts, due year four 113,064  
Future minimum operating lease receipts, due year five 113,123  
Future minimum operating lease receipts, due after year five 1,223,729  
Total future minimum operating lease receipts 1,783,558  
Rental Receipts, Operating Leases, 2019   113,180
Rental Receipts, Operating Leases, 2020   113,578
Rental Receipts, Operating Leases, 2021   114,447
Rental Receipts, Operating Leases, 2022   115,552
Rental Receipts, Operating Leases, 2023   116,463
Rental Receipts, Operating Leases, Thereafter   1,372,646
Rental Receipts, Operating Leases, Total future minimum receipts   1,945,866
Owned properties, operating    
Lessor, Operating Lease, Payments, Fiscal Year Maturity    
Future minimum operating lease receipts, next twelve months 52,927  
Future minimum operating lease receipts, due year two 54,716  
Future minimum operating lease receipts, due year three 56,189  
Future minimum operating lease receipts, due year four 56,394  
Future minimum operating lease receipts, due year five 57,497  
Future minimum operating lease receipts, due after year five 804,606  
Total future minimum operating lease receipts 1,082,329  
Rental Receipts, Operating Leases, 2019   52,527
Rental Receipts, Operating Leases, 2020   53,066
Rental Receipts, Operating Leases, 2021   54,615
Rental Receipts, Operating Leases, 2022   56,092
Rental Receipts, Operating Leases, 2023   56,284
Rental Receipts, Operating Leases, Thereafter   858,755
Rental Receipts, Operating Leases, Total future minimum receipts   1,131,339
Accounts and notes receivable, net    
Sales-type and Direct Financing Leases, Lease Receivable, Fiscal Year Maturity    
Present value of minimum sales-type and direct financing lease receipts 3,146  
Rental Receipts, Capital Leases, Net investment in direct financing leases   735
Net investment in sales-type and direct financing leases    
Sales-type and Direct Financing Leases, Lease Receivable, Fiscal Year Maturity    
Present value of minimum sales-type and direct financing lease receipts $ 256,606  
Rental Receipts, Capital Leases, Net investment in direct financing leases   $ 226,477
v3.19.3.a.u2
Leases Properties Leased to Third Parties (Details) - USD ($)
$ in Thousands
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Property, Plant and Equipment      
Property, plant and equipment leased to others, gross $ 1,568,668 $ 1,554,422  
Accumulated depreciation and amortization (591,668) (531,155)  
Properties 977,000 1,023,267 $ 1,062,869
Assets Leased to Others      
Property, Plant and Equipment      
Land 281,792 272,234  
Buildings and improvements 311,047 312,672  
Restaurant equipment 1,727 2,443  
Property, plant and equipment leased to others, gross 594,566 587,349  
Accumulated depreciation and amortization (157,130) (143,313)  
Properties $ 437,436 $ 444,036  
v3.19.3.a.u2
Guarantees and Other Commitments and Contingencies Franchisee Image Activation Programs (Details) - Maximum
 12 Months Ended
Dec. 29, 2019
New Build Incentive Program  
Other commitments  
Years of reduction in royalty payment attributable to new builds 2 years
2018 New Build Incentive Program  
Other commitments  
Years of reduction in royalty payment attributable to new builds 2 years
Remodel Incentive Program  
Other commitments  
Years of reduction in royalty payment attributable to incentive program 1 year
v3.19.3.a.u2
Guarantees and Other Commitments and Contingencies Other Loan Guarantees (Details) - New store development and equipment financing
$ in Thousands
Dec. 29, 2019
USD ($)
Guarantor Obligations  
Guarantor Obligations, Maximum Exposure, Undiscounted $ 6
Other liabilities  
Guarantor Obligations  
Guarantor Obligations, Current Carrying Value $ 1
v3.19.3.a.u2
Guarantees and Other Commitments and Contingencies Lease Guarantees (Details)
$ in Thousands
Dec. 29, 2019
USD ($)
Property Lease Guarantee  
Guarantor Obligations  
Guarantor Obligations, Maximum Exposure, Undiscounted $ 75,626
v3.19.3.a.u2
Guarantees and Other Commitments and Contingencies Insurance (Details)
$ in Thousands
Dec. 29, 2019
USD ($)
Other commitments  
Accrued Risk Insurance $ 20,588
Accrued Health Insurance 2,349
Insurance Claims  
Other commitments  
Loss Contingency, Range of Possible Loss per Occurrence, Maximum $ 500
v3.19.3.a.u2
Guarantees and Other Commitments and Contingencies Letters of Credit (Details)
$ in Thousands
Dec. 29, 2019
USD ($)
Guarantor Obligations  
Letters of Credit Outstanding, Amount $ 25,106
v3.19.3.a.u2
Guarantees and Other Commitments and Contingencies Beverage Agreement (Details) - Beverage Agreement - USD ($)
$ in Thousands
 12 Months Ended
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Long-term Purchase Commitment      
Purchase Obligation, Purchases During Period $ 11,440 $ 10,108 $ 9,370
Purchase Obligation, Due in Next Twelve Months 11,000    
Purchase Obligation, Due in Second Year 11,300    
Purchase Obligation, Due in Third Year 11,800    
Purchase Obligation, Due in Fourth Year 12,300    
Purchase Obligation, Due in Fifth Year 12,800    
Accounts Payable      
Long-term Purchase Commitment      
Amount Due from (to) Vendors for Purchase and Capital Commitments $ (2,542)    
v3.19.3.a.u2
Guarantees and Other Commitments and Contingencies IT Services Agreement (Details) - IT Services Agreement
$ in Thousands
 12 Months Ended
Dec. 29, 2019
USD ($)
Long-term Purchase Commitment  
Purchase Obligation, Purchases During Period $ 1,386
Purchase Obligation, Due in Next Twelve Months 16,800
Purchase Obligation, Due in Second Year 17,200
Purchase Obligation, Due in Third Year 15,400
Purchase Obligation, Due in Fourth Year 13,000
Purchase Obligation, Due in Fifth Year 12,200
Accrued Liabilities  
Long-term Purchase Commitment  
Amount Due from (to) Vendors for Purchase and Capital Commitments $ (1,046)
v3.19.3.a.u2
Guarantees and Other Commitments and Contingencies Marketing Agreement (Details)
 12 Months Ended
Dec. 29, 2019
USD ($)
Broadcasters
Long-term Purchase Commitment  
Number of National Broadcasters | Broadcasters 2
Marketing Agreement  
Long-term Purchase Commitment  
Purchase Obligation, Purchases During Period $ 11,000
Purchase Obligation, Due in Next Twelve Months 15,500,000
Purchase Obligation, Due in Second Year 12,400,000
Purchase Obligation, Due in Third Year 12,900,000
Purchase Obligation, Due in Fourth Year 13,400,000
Purchase Obligation, Due in Fifth Year $ 12,700,000
v3.19.3.a.u2
Transactions with Related Parties Related Party Transaction Summary (Details)
$ in Thousands
 12 Months Ended
Dec. 29, 2019
USD ($)
Dec. 30, 2018
USD ($)
Dec. 31, 2017
USD ($)
Nov. 30, 2018
USD ($)
ft²
Jan. 01, 2017
USD ($)
ft²
QSCC          
Related Party Transaction          
Area of Real Estate Property | ft²       14,493 14,333
Annual Base Rental       $ 217 $ 215
QSCC | Patronage Dividends | Cost of sales          
Related Party Transaction          
Related Party Transaction, Other Revenues from Transactions with Related Party $ 504 $ 470 $ 987    
QSCC | Lease Income | Franchise rental income          
Related Party Transaction          
Related Party Transaction, Other Revenues from Transactions with Related Party 217 215 217    
TimWen          
Related Party Transaction          
TimWen lease expense, net of management fee income 16,660 13,044 12,360    
TimWen | Franchise Rental Expense | Cost of sales          
Related Party Transaction          
TimWen lease expense, net of management fee income 16,867 13,256 12,572    
TimWen | Management Fee Income | General and administrative          
Related Party Transaction          
Related Party Transaction, Other Revenues from Transactions with Related Party $ 207 $ 212 $ 212    
v3.19.3.a.u2
Legal and Environmental Matters (Details)
$ in Thousands
Jan. 31, 2020
USD ($)
Dec. 29, 2019
USD ($)
Defendants
Civil_complaints
Nov. 06, 2019
USD ($)
Dec. 30, 2018
USD ($)
Loss Contingencies        
Accruals for legal and environmental matters   $ 52,272   $ 55,883
Insurance settlements receivable   $ 25,350   22,500
Number of Putative Shareholder Derivative Complaints | Civil_complaints   2    
Loss contingency, number of defendants | Defendants   1    
Financial Institutions Case        
Loss Contingencies        
Litigation settlement, amount awarded to other party     $ 50,000  
Accruals for legal and environmental matters   $ 50,000   50,000
Insurance settlements receivable   $ 25,000   $ 22,500
Financial Institutions Case | Subsequent Event        
Loss Contingencies        
Payments for Legal Settlements $ 24,650      
v3.19.3.a.u2
Advertising Costs and Funds (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Restricted Assets and Liabilities      
Advertising funds restricted assets $ 82,376 $ 76,509  
Accounts payable 22,701 21,741  
Accrued expenses and other current liabilities 165,272 150,636  
Advertising funds restricted liabilities 84,195 80,153  
Cost of sales      
Restricted Assets and Liabilities      
Advertising Expense 29,954 27,939 $ 27,921
Restricted Assets and Liabilities      
Restricted Assets and Liabilities      
Cash and cash equivalents 23,973 25,247  
Accounts receivable, net 54,394 47,332  
Other assets 4,009 3,930  
Advertising funds restricted assets 82,376 76,509  
Accounts payable 66,749 62,033  
Accrued expenses and other current liabilities 17,446 18,120  
Advertising funds restricted liabilities $ 84,195 $ 80,153  
v3.19.3.a.u2
Geographic Information (Details) - USD ($)
$ in Thousands
 3 Months Ended 12 Months Ended
Dec. 29, 2019
Sep. 29, 2019
Jun. 30, 2019
Mar. 31, 2019
Dec. 30, 2018
Sep. 30, 2018
Jul. 01, 2018
Apr. 01, 2018
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Revenues from External Customers and Long-Lived Assets                      
Revenues $ 427,191 $ 437,880 $ 435,348 $ 408,583 $ 397,820 $ 400,550 $ 411,002 $ 380,564 $ 1,709,002 $ 1,589,936 $ 1,223,408
Properties 977,000       1,023,267       977,000 1,023,267 1,062,869
U.S.                      
Revenues from External Customers and Long-Lived Assets                      
Revenues                 1,606,619 1,495,639 1,154,873
Properties 941,607       990,992       941,607 990,992 1,032,151
Canada                      
Revenues from External Customers and Long-Lived Assets                      
Revenues                 80,903 74,626 50,431
Properties 35,283       32,155       35,283 32,155 30,586
Other International                      
Revenues from External Customers and Long-Lived Assets                      
Revenues                 21,480 19,671 18,104
Properties $ 110       $ 120       $ 110 $ 120 $ 132
v3.19.3.a.u2
Segment Information Reconciliation of Revenue from Segments to Consolidated (Details) - USD ($)
$ in Thousands
 3 Months Ended 12 Months Ended
Dec. 29, 2019
Sep. 29, 2019
Jun. 30, 2019
Mar. 31, 2019
Dec. 30, 2018
Sep. 30, 2018
Jul. 01, 2018
Apr. 01, 2018
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Segment Reporting, Revenue Reconciling Item                      
Total revenues $ 427,191 $ 437,880 $ 435,348 $ 408,583 $ 397,820 $ 400,550 $ 411,002 $ 380,564 $ 1,709,002 $ 1,589,936 $ 1,223,408
Wendy's U.S.                      
Segment Reporting, Revenue Reconciling Item                      
Total revenues                 1,404,307 1,312,491 986,738
Wendy's International                      
Segment Reporting, Revenue Reconciling Item                      
Total revenues                 68,198 67,630 43,696
Global Real Estate & Development                      
Segment Reporting, Revenue Reconciling Item                      
Total revenues                 $ 236,497 $ 209,815 $ 192,974
v3.19.3.a.u2
Segment Information Schedule of Segment Reporting Information, by Segment (Details) - USD ($)
$ in Thousands
 3 Months Ended 12 Months Ended
Dec. 29, 2019
Sep. 29, 2019
Jun. 30, 2019
Mar. 31, 2019
Dec. 30, 2018
Sep. 30, 2018
Jul. 01, 2018
Apr. 01, 2018
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Segment Reporting Information                      
Segment profit $ 36,717 $ 79,023 $ 80,573 $ 66,266 $ 45,799 $ 77,348 $ 71,483 $ 55,262 $ 262,579 $ 249,892 $ 214,758
Advertising funds surplus                 1,337 4,153 0
Unallocated general and administrative                 (200,206) (217,489) (203,593)
Depreciation and amortization                 (131,693) (128,879) (125,687)
System optimization gains (losses), net                 1,283 463 (39,076)
Reorganization and realignment costs (12,194)       (2,377) (941) $ (3,124) (2,626) (16,965) (9,068) (22,574)
Impairment of long-lived assets                 (6,999) (4,697) (4,097)
Unallocated other operating income, net                 11,418 6,387 8,652
Interest expense, net                 (115,971) (119,618) (118,059)
Loss on early extinguishment of debt (1,346)   $ (7,150)         $ (11,475) (8,496) (11,475) 0
Investment income, net $ 24,599         $ 450,133     25,598 450,736 2,703
Other income, net                 7,771 5,381 1,617
Income before income taxes                 171,481 574,916 101,019
Impact of legal reserves - FI case settlement         $ 27,500            
Corporate and Other                      
Segment Reporting Information                      
Unallocated general and administrative                 (81,230) (104,208) (82,188)
Unallocated other operating income, net                 291 444 333
Operating Segments                      
Segment Reporting Information                      
Segment profit                 496,555 491,684 488,047
Operating Segments | Wendy's U.S.                      
Segment Reporting Information                      
Segment profit                 369,193 355,455 369,432
Operating Segments | Wendy's International                      
Segment Reporting Information                      
Segment profit                 20,246 25,597 23,833
Operating Segments | Global Real Estate & Development                      
Segment Reporting Information                      
Segment profit                 $ 107,116 $ 110,632 $ 94,782
v3.19.3.a.u2
Segment Information Reconciliation of Other Significant Reconciling Items from Segments to Consolidated (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Segment Reporting, Other Significant Reconciling Item      
Total net income of equity method investments $ 8,673 $ 8,076 $ 7,573
Wendy's International      
Segment Reporting, Other Significant Reconciling Item      
Total net income of equity method investments (1,022) (1,344) (1,134)
Global Real Estate & Development      
Segment Reporting, Other Significant Reconciling Item      
Total net income of equity method investments $ 9,695 $ 9,420 $ 8,707
v3.19.3.a.u2
Quarterly Financial Information (Unaudited) (Details) - USD ($)
$ / shares in Units, $ in Thousands
 3 Months Ended 12 Months Ended
Dec. 29, 2019
Sep. 29, 2019
Jun. 30, 2019
Mar. 31, 2019
Dec. 30, 2018
Sep. 30, 2018
Jul. 01, 2018
Apr. 01, 2018
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Quarterly Financial Data Table                      
Revenues $ 427,191 $ 437,880 $ 435,348 $ 408,583 $ 397,820 $ 400,550 $ 411,002 $ 380,564 $ 1,709,002 $ 1,589,936 $ 1,223,408
Cost of sales 151,434 152,425 151,092 142,579 138,867 139,348 138,154 132,219 597,530 548,588 517,935
Operating profit 36,717 79,023 80,573 66,266 45,799 77,348 71,483 55,262 262,579 249,892 214,758
Net Income $ 26,533 $ 46,127 $ 32,386 $ 31,894 $ 18,831 $ 391,249 $ 29,876 $ 20,159 $ 136,940 $ 460,115 $ 194,029
Basic income per share                      
Basic income per share $ 0.12 $ 0.20 $ 0.14 $ 0.14 $ 0.08 $ 1.65 $ 0.13 $ 0.08 $ 0.60 $ 1.93 $ 0.79
Diluted income per share                      
Diluted income per share $ 0.11 $ 0.20 $ 0.14 $ 0.14 $ 0.08 $ 1.60 $ 0.12 $ 0.08 $ 0.58 $ 1.88 $ 0.77
Investment income, net $ 24,599         $ 450,133     $ 25,598 $ 450,736 $ 2,703
Franchise support and other costs 16,400               43,686 25,203 16,325
Reorganization and realignment costs 12,194       $ 2,377 $ 941 $ 3,124 $ 2,626 16,965 9,068 22,574
Loss on early extinguishment of debt $ 1,346   $ 7,150         $ 11,475 $ 8,496 $ 11,475 $ 0
Loss Contingency Accrual, Estimate of Possible Loss         $ 27,500            
v3.19.3.a.u2
Label Element Value
Restricted cash included in advertising funds restricted assets wen_Restrictedcashincludedinadvertisingfundsrestrictedassets $ 25,247,000
Restricted cash included in advertising funds restricted assets wen_Restrictedcashincludedinadvertisingfundsrestrictedassets 8,579,000
Restricted cash included in advertising funds restricted assets wen_Restrictedcashincludedinadvertisingfundsrestrictedassets 23,973,000
Restricted Cash, Noncurrent us-gaap_RestrictedCashNoncurrent 0
Restricted Cash, Noncurrent us-gaap_RestrictedCashNoncurrent 165,000
Restricted Cash, Noncurrent us-gaap_RestrictedCashNoncurrent $ 0