Wendy's International, Inc. was incorporated in 1969 under the laws of the State
of Ohio.
The Company is primarily engaged in the business of operating, developing and
franchising a system of distinctive quick-service and fast-casual restaurants
serving high quality food.
Each Wendy's restaurant offers a relatively standard menu featuring hamburgers
and filet of chicken breast sandwiches, which are prepared to order with the
customer's choice of condiments. Wendy's menu also includes chicken nuggets,
chicken strips, chili, baked and French fried potatoes, prepared salads, desserts,
soft drinks and other non-alcoholic beverages and children's meals. In addition,
the restaurants sell a variety of promotional products on a limited basis.
Each Hortons unit offers coffee, cappuccino, fresh baked goods such as donuts,
muffins, pies, croissants, tarts, cookies, cakes, bagels, and in some units,
sandwiches, soups and fresh-baked breads.
Baja Fresh offers a range of fast-casual, fresh Mexican food. The menu includes
a variety of fresh, flavorful food including burritos, tacos, quesadillas, nachos,
tostadas, beans and rice.
The Company strives to maintain quality and uniformity throughout all restaurants
by publishing detailed specifications for food products, preparation and service,
by continual in-service training of employees and by field visits from Company
supervisors. In the case of franchisees, field visits are made by Company personnel
who review operations and make recommendations to assist in compliance with
Company specifications.
Generally, the Company does not sell food or supplies to its Wendy's franchisees.
However, the Company has arranged for volume purchases of many of these products.
Under the purchasing arrangements, independent distributors purchase certain
products directly from approved suppliers and then store and sell them to local
company and franchised restaurants. These programs help assure availability
of products and provide quantity discounts, quality control and efficient distribution.
These advantages are available both to the Company and to any franchisee who
chooses to participate in the distribution program.
Under the Hortons Canada franchise arrangements, the franchisee is required
to purchase certain products such as coffee, sugar and restaurant supplies from
a Hortons' subsidiary. All of these products are distributed from five warehouses
located across Canada. Products are delivered to Hortons Canada restaurants
primarily by Hortons' fleet of trucks and trailers. The franchisees are also
required to purchase par-baked products from an outside distributor that is
provided with products from Hortons' joint venture with IAWS Group/Cuisine de
France. Both company and franchise stores of Hortons U.S. purchase products
from a supplier that has been approved by the Company.
Competition
Each company and franchised restaurant is in competition with other food service
operations within the same geographical area. The quick-service and fast-casual
restaurant segments are highly competitive. The Company competes with other
organizations primarily through the quality, variety and value perception of
food products offered. The number and location of units, quality and speed of
service, attractiveness of facilities, effectiveness of marketing and new product
development by the Company and its competitors are also important factors. The
price charged for each menu item may vary from market to market depending on
competitive pricing and the local cost structure.
The Company's competitive position at its Wendy's restaurants is enhanced by
its use of fresh ground beef, its unique and diverse menu, promotional products,
its wide choice of condiments and the atmosphere and decor of its restaurants.
Hortons is known for the freshness of its wide variety of baked goods and for
its excellent coffee. Baja Fresh is known for fresh, flavorful Mexican food.