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Wendy's Franchise Cost & Fees

Date of Incorporation: 1969

Franchising Since: 1972

Headquarters: Dublin, Ohio

 

Business Description: Wendy's International, Inc. grants franchises for the operation of a distinctive style of quick-service restaurant. Wendy's, along with some of its affiliates, also owns and operates Wendy's Restaurants and on occasion leases and sells Wendy's Restaurants as well as other real estate interests owned by Wendy's and its affiliates.

 

Franchise Offer: The franchisee will operate a quick-service restaurant which offers a limited menu of prepared to order food, including hamburgers, chicken sandwiches and complementary items.

 

Financial Assistance: On occasion, Wendy's cooperates with various lenders in the lenders' efforts to provide financing to qualified franchisees for various purposes. The terms of financing offered by these lenders may vary depending upon many factors, and therefore, the financing terms must be discussed with the lenders directly. Wendy's may in certain specific situations offer its own leasing programs to new or existing franchisees who are in full compliance with their obligations to Wendy's. The financing programs which Wendy's may offer include: the leasing of company owned restaurants, and other direct and indirect financing.

 

Training and Assistance: Before the opening of the Restaurant, the franchisee (or, if the franchisee is a corporation, partnership, or other business entity, the Operator for the Restaurant as previously approved by Wendy's) and the initial management employees and Restaurant crew must attend and complete, to Wendy's satisfaction, an initial training program. At Wendy's option, any management persons later employed by the franchisee must also attend and complete Wendy's training program, to Wendy's satisfaction. The franchisee and management employees involved in the operation of the Restaurant must also attend additional courses, seminars, and other training programs as Wendy's may reasonably require. Wendy's will be responsible for the cost of materials and instructors for the initial training program for the franchisee or the Operator only, if the Restaurant is the franchisee’s first Restaurant operating in the System. A typical initial training program will be approximately 20-24 weeks in duration and will include both classroom and on-the-job training. Wendy’s also offers and may require additional training programs.

 

Territory: The franchisee will not receive an exclusive territory. The franchisee may face competition from other Wendy's franchisees, from company-owned Wendy's Restaurants, or from other channels of distribution or competitive brands owned by affiliates of Wendy's.

 

Term of Agreement and Renewal: The length of the franchise term is 20 years. The renewal term is for 10 years, if the franchisee is in good standing and complies with renewal conditions.

 

Obligations and Restrictions: Wendy's strongly recommends that the franchisee participate personally in the actual operation of the Wendy's Restaurant. If the franchisee (or the managing and controlling partner or shareholder, if the franchisee is a partnership, corporation or other business entity) elect not to participate in the Wendy's Restaurant's day-to-day operations, an individual “Operator” must be designated to supervise the Wendy's Restaurant's operation at all times. The franchisee must use the Wendy's Restaurant premises solely for the operation of the Franchised Business, to keep the business open and in normal operation for those hours and days as Wendy's may specify, and to refrain from using or permitting the use of the premises for any other purpose without first obtaining Wendy's written consent. The franchisee also must operate the Wendy's Restaurant in strict conformity with those methods, standards, and specifications as specified in the Manual or other writing.

 

Estimated Number of Units: 6,560 units

 

Investment Tables:

Initial Investment:

Type of Fee Low High
Application Fee $5,000 $5,000
Training Expenses $26,000 $100,000
Initial Technical Assistance Fee $40,000 $40,000
Real Estate, Permits, Construction of Standard Prototype Restaurant and Site Improvements:
Cash Purchase
Financing (3 months)
Leasing (3 months)

 
$1,190,000
$274,000
$24,000

 
$2,401,000
$540,000
$48,500

Equipment and Signage:
Cash Purchase
Financing (3 months)
Leasing (3 months)
 
$527,000
$23,500
N/A
 
$600,000
$26,500
N/A
Opening Inventory and Supplies $10,000 $14,000
Additional Funds - 3 Months $150,000 $175,000
Grand Opening Advertising $7,500 $10,000
Security Deposit, Utilities, Licenses and Other Prepaid Expenses $20,000 $65,000
Insurance Cost $10,000 $35,000
Estimated Total: If franchisee pays for Land, Building, Improvements, Equipment and Signage $1,985,500 $3,345,000
Estimated Total: If franchisee finances the Land, Building, Improvements, Equipment and Signage $556,000 $1,010,500
Estimated Total: If franchisee leases the Land, Building, Improvements, Equipment and Signage $316,000 $519,00

 

Other Fees:

Type of Fee Amount
Royalty Greater of 4% of Gross Sales or $1,000 per month.
National Advertising 3.50% of Gross Sales.
Local and Regional Advertising .50% of Gross Sales.
Additional Training Will vary under circumstances.
Transfer $5,000
Renewal An amount which is not greater than 25% of the then-current Technical Assistance Fee.
Audit Costs and expenses of audit, including travel, lodging, wages, accounting and legal costs, and interest on any understated amount.
Late Fee/Interest $100 plus interest on the overdue amount from the date it was due until paid, at the
(i) rate determined by Wendy's, or
(ii) maximum legal rate, whichever is less.
Costs and Attorney's Fees Will vary.
Indemnification Will vary.
Review of Proposed Offering Materials of Franchisee $10,000 or a greater amount necessary to reimburse Wendy's for its legal, accounting, and other costs.
Aloha – Software Maintenance and Hosting Services Fee Software Maintenance Fee ($500 per Restaurant per year); Hosting Service Fee ($25 per Restaurant per month).

The above information has been taken from the FDD of Wendy's. Year of FDD: 2014

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