Wendy’s Tenant Overview

Net Lease Advisor Tenant Wendys


  • Higher cap rates available
  • Engaged in heavy advertising to improve brand image and market penetration
  • Often new favorable NNN leases with good increases


  • Non-investment grade credit
  • Must look closely at performance of franchisor across all locations
  • Must review sales history at subject location
  • Not all leases require sales reporting

Earnings Highlights

Earnings Summary
  • Global systemwide sales growth: 6 to 8 percent
  • Adjusted EBITDA: $530 to $540 million
  • Adjusted earnings per share: $0.95 to $1.00

Tenant Description

Wendy’s is one of the largest quick-service hamburger restaurant chains.

Wendy’s is an attractive investment due to the underlying asset. Restaurants are typically in a 3,000 square foot building with a drive-thru window, and situated on 0.5 - 1.0 acre of land. It is important to note that Wendy's franchises the majority of its locations. There are a number of various lease agreements and guarantors operating under the Wendy's banner. As a result, lease terms vary, as do cap rates, based on the size and strength of the operator and sales at a particular location. Generally the lease term is 20 years with four (4), five (5) year options with increases of 5-10% every 5 years.

When Wendy's International and Arby's parent company, Triarc Companies, merged in September 2008, they created the third-largest US fast-food chain (behind only McDonald's and Yum! Brands). This merger formed the Wendy's/Arby's Group, the parent company of Wendy’s International, Inc. and Arby’s Restaurant Group, Inc. which are the franchisors of the Wendy’s and Arby’s restaurant systems. Wendy’s/Arby’s Group creation has altered the perception of both Wendy's and Arby’s net lease properties with the introduction of new management and new menu concepts.

Wendy's is engaged in the quick-service restaurant (QSR) business, operating, developing and franchising Wendy's restaurants. The revenues from its restaurant business are derived from four principal sources: sales at Wendy's-owned restaurants; sales of bakery items and kid's meal promotional items to franchisees; franchise royalties received from all Wendy's franchised restaurants, and up-front franchise fees from restaurant operators for each new unit opened.

Average Cap Rate
Trailing 12-month average
Average Property & Lease
Average Sale Price $2,476,064
NOI $135,490
$/Square Foot $900
Building SF 2,750
Lot Size 0.5 - 1.0 Acres
Lease Term 20 Years
Escalations 5 - 10% Every 5 Years
Stock Symbol WEN
Credit Rating
S&P B+
Moody's B3
Average Cap Rate Trend
Rates reflect year-over-year comparison
Recent Sales Comps
Pittsburg, KS 5.25%
Tulsa, OK 5.65%
Asheboro, NC 6.01%
Augusta, GA 6.45%