Wendy’s Franchise Cost & Fees

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Description

Year Business Began: 1969Franchising Since: 1972Headquarters: Dublin, OhioEstimated Number of Units: 6,635Franchise Description: The franchisor is Quality Is Our Recipe, LLC. One of the franchisor’s predecessors and intermediate corporate parents is Wendy’s International, Inc. The franchisor 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. Franchisees operate a quick-service restaurant which offers a limited menu of prepared to order food, including hamburgers, chicken sandwiches and complementary items.Training Overview: Before the opening of the Restaurant, franchisees (or, if the franchisee is a corporation, partnership, or other business entity, the Operator for the Restaurant as previously approved by the franchisor) and their initial management employees and Restaurant crew must attend and complete, to the franchisor’s satisfaction, an initial training program. At the franchisor’s option, any management persons later employed by the franchisee must also attend and complete the training program, to the franchisor’s satisfaction. Franchisees and their management employees involved in the operation of the Restaurant must also attend additional courses, seminars, and other training programs as the franchisor may reasonably require. A typical initial training program will be approximately 20-24 weeks in duration and will include online, classroom, virtual instructor led and on-the-job training. Training is conducted at various certified training Restaurants throughout the United States. The franchisor also offers and may require additional training programs.Territory Granted: Franchisees will operate their Wendy’s Restaurant at a specific location approved by the franchisor and identified in the Franchise Agreement. Franchisees have no exclusive rights or territory associated with the operation of your Wendy’s Restaurant.Obligations and Restrictions: The franchisor strongly recommends that franchisees 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) elects 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. Franchisees 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 the franchisor may specify, and to refrain from using or permitting the use of the premises for any other purpose without first obtaining the franchisor’s written consent. Franchisees also must operate the Wendy’s Restaurant in strict conformity with those methods, standards, and specifications as specified in the Manual or other writing.Term of Agreement and Renewal: The length of the initial franchise term is 20 years. The renewal term is for 10 years, if franchisees are in good standing and comply with renewal conditions.Financial Assistance: On occasion, the franchisor and/or its affiliates cooperate 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. The franchisor and/or its affiliates may in some situations offer its own leasing programs to new or existing franchisees who are in full compliance with their obligations to the franchisor and its affiliates. As part of the disposition of certain Company Restaurants, the franchisor and/or its affiliates may lease or sublease a Wendy’s Restaurant to a franchisee. In limited circumstances, the franchisor or its affiliates may offer deferrals, loans, waivers, setoffs and other forms of financial assistance in unique instances to existing franchisees. Investment Tables: Estimated Initial Investment Name of Fee Low High Application Fee $5,000 $5,000 Training Expenses $26,000 $100,000 Initial Technical Assistance Fee $50,000 $50,000 Real Estate, Permits, Construction of Standard Prototype Restaurant and Site Improvements: Cash Purchase Financing (3 months) Leasing (3 months) $1,240,000 $277,000 $24,000 $2,500,000 $547,000 $48,500 Equipment and Signage: Cash Purchase Financing (3 months) Leasing (3 months) $500,000 $21,000 N/A $600,000 $26,000 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 $165,000 Insurance Cost $10,000 $35,000 Estimated Total: If franchisee pays for Land, Building, Improvements, Equipment and Signage $2,018,500 $3,654,000 Estimated Total: If franchisee finances the Land, Building, Improvements, Equipment and Signage $570,500 $1,127,500 Estimated Total: If franchisee leases the Land, Building, Improvements, Equipment and Signage $323,500 $628,500 Other Fees Type of Fee Amount Royalty 4% of Gross Sales National Advertising 3.5% of Gross Sales. Local and Regional Advertising 0.5% 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. Continuous Operations FeesUpon unapproved early termination of the Franchise Agreement, the sum of the average monthly royalty fee and the average Advertising Contribution due under the Agreement for the 12-month period prior to termination (or the average monthly royalty and the average Advertising Contribution due under the Agreement if operating less than 12 months) multiplied by the lesser of (i) 36 or (ii) the number of months remaining on the Term of the Franchise Agreement.Development Agreement – Development Obligations FeeOnly applicable to development agreement. Upon failure to open restaurant in accordance with development schedule, $5,000 monthly payment beginning in the first month after required open date until earlier of (a) actual open date of restaurant and (b) 10 years from required open date of restaurant. 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). Cyber Insurance Policy Premium PaymentA per restaurant fee of $360, which the per-Restaurant amount is subject to change on an annual basis according to overall policy premiums. The above information has been compiled from the FDD of Wendy’s. Year of FDD: 2018Franchise Direct’s Disclaimer

Other Fees
Type of Fee Amount
Royalty 4% of Gross Sales
National Advertising 3.5% of Gross Sales.
Local and Regional Advertising 0.5% 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.
Continuous Operations Fees Upon unapproved early termination of the Franchise Agreement, the sum of the average monthly royalty fee and the average Advertising Contribution due under the Agreement for the 12-month period prior to termination (or the average monthly royalty and the average Advertising Contribution due under the Agreement if operating less than 12 months) multiplied by the lesser of (i) 36 or (ii) the number of months remaining on the Term of the Franchise Agreement.
Development Agreement – Development Obligations Fee Only applicable to development agreement. Upon failure to open restaurant in accordance with development schedule, $5,000 monthly payment beginning in the first month after required open date until earlier of (a) actual open date of restaurant and (b) 10 years from required open date of restaurant.
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).
Cyber Insurance Policy Premium Payment A per restaurant fee of $360, which the per-Restaurant amount is subject to change on an annual basis according to overall policy premiums.