Wendy’s to Sell 500 Stores to Franchisees

Wendy's to Sell 500 Stores to FranchiseesWendy’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.

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