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Wednesday, July 24, 2013

Wendy's to sell restaurants


Wendy's tops expectations; to sell restaurants

Wendy's reported a quarterly profit above Wall Street expectations and said it's selling 425 of its restaurants to franchisees, a move that's expected to help boost its profit margins. The move isn't unusual; fast-food companies often own only a small percentage of their restaurants. This helps keep their operating costs in check and gives them a more stable stream of income that's tilted toward royalty fees and rent, rather sales at restaurants. 

Wendy's, based in Dublin, Ohio, also raised its dividend by 25 percent to 5 cents per share. Its stock was up 10 percent at $7.32. CEO Emil Brolick said that the sale of the restaurants will also help expand adoption of the company's new restaurant designs. That's because Wendy's plans to sell the restaurants to "well-capitalized" franchisees willing to pay for the remodeling.

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