Wendy’s is continuing with its plan to own fewer and fewer of its restaurants, saying Tuesday it will sell another 500 stores on the way to operating only 5% of its system by the middle of 2016.
The third-largest U.S. fast-food burger seller has sold a significant number of stores in recent years, a move investors have welcomed because it lowers costs and provides more predictable royalty and rent revenue from franchisees. As it gets toward a system that’s around 95% franchised, Wendy’s said it’s anticipating pretax cash proceeds of $400 million to $475 million, along with, not surprisingly, a significant reduction in future capital spending.
And with that, shares of Dublin, Ohio-based Wendy’s, already up 15% this year as of Monday’s close, were on the way higher. Recently, the stock was gaining 5.1% to $10.94. At the day’s best, the shares traded at $11.50, a price area they last saw in 2007.