Wendy's

The technology fee of $552/month is substantially higher than the typical range for quick service restaurants ($110-$408). What specific services and software are included in this fee, and has it increased over the past 3 years?

Your royalty rate of 4.0% is below the typical 5.0-6.0% range for quick service restaurants. Are there any circumstances under which the royalty rate could increase, and does this rate apply to all revenue streams?

The franchise fee of $50,000 exceeds the typical range of $25,000-$37,500. What does this fee cover that other franchisors in this category do not include?

You had 5 cases initiated against the franchisor in the past 3 years, above the typical range of 0-3. Can you provide details on the nature of these cases, their outcomes, and whether any resulted in settlements affecting franchisee protections?

Unit closures increased dramatically in 2024 with 174 closures compared to 35-56 in prior years. What is driving this significant increase in unit closures, and are there early warning signs franchisees should monitor?

Your territory is non-exclusive with no encroachment protection, and the non-compete radius is only 3 miles (below the typical 5-10 miles). How does Wendy's protect existing franchisees from direct competition by the franchisor or other franchisees?

The initial term of 20 years is longer than the typical 10-15 years. What is the rationale for this extended initial term, and what circumstances would allow a franchisee to exit before the 20-year period ends?

Your renewal conditions require meeting 7 specified criteria. Can you provide the complete list of these renewal conditions and explain what percentage of franchisees fail to meet them?

The renewal fee cannot exceed 25% of the then-current technical assistance fee. Given that the technology fee is currently $552/month, can you estimate what the renewal fee would be at year 20?

The agreement allows for immediate termination without notice for 9 types of non-curable defaults. Can you provide specific examples of these non-curable defaults and clarify what constitutes a default (e.g., sales thresholds, compliance metrics)?

Personal guarantees are required from individuals liable under the agreement. If a franchisee operates as a corporation or LLC, are the individual owners still personally liable for all obligations, and what happens if personal circumstances change?

Your gross sales data shows median sales of $2,045,357, significantly above the typical range. Can you break down the sales distribution by unit age, location type, and franchisee experience to show which units achieve these higher sales?

Terminations are extremely low at 0.05%, but closures increased to 174 units in 2024. Are franchisees voluntarily closing units due to profitability concerns, market saturation, or other factors?

The agreement provides 0 to 30 days to cure defaults. For a franchisee who violates a curable default, what specific remediation steps does Wendy's require, and is there flexibility if the franchisee demonstrates good faith efforts to comply?

Can you provide the specific definition of 'default' in the franchise agreement and clarify whether missing sales targets, failing health inspections, or declining unit-level profitability constitute grounds for termination?

What support and training do you provide to help franchisees achieve the reported median sales of $2,045,357, and are these sales figures representative of franchisees in typical markets vs. premium locations?

Have there been any class action lawsuits or regulatory investigations involving Wendy's franchisees in the past 3 years, and if so, what were the outcomes?

The system contracted by 97 units in the past year while the franchise fee is at the higher end of the range. Are you actively recruiting new franchisees, and what is your growth strategy for the next 3-5 years?

Given the 3-mile non-compete radius, can a Wendy's franchisee open a competing quick service restaurant immediately after their franchise ends, and are there any other contractual restrictions on post-franchise activities?

Can you provide the Item 19 statement with detailed breakdowns of unit economics, including operating costs, labor expenses, food costs, and average unit profitability by region and store age?