Common Questions & Answers
An interested person can enter the Wendy’s system through the acquisition of one or more existing Wendy’s restaurants or by developing new restaurants. If someone is not already negotiating with an existing franchisee to purchase existing restaurants, he or she may express his or her interest to Wendy’s by providing contact information through Wendys.Franchising@wendys.com.
Wendy’s is looking for prospective franchisees who have extensive restaurant experience (preferably quick service) with strong operational, administrative and financial resources.
Our focus is to recruit prospective franchisees who are interested in pursuing multi-unit opportunities through the acquisition of existing restaurants or the development of new restaurants.
Wendy’s is very interested in discussing potential franchise opportunities with minority and women candidates.
The minimum financial requirements for new multi-unit franchisees or franchisee groups are:
- Minimum net worth of at least $5,000,000 ($2,000,000 Canada).
- Minimum liquid assets of at least $2,000,000 ($1,000,000 Canada).
A franchisee must provide a comprehensive and detailed three to five year business plan which includes a skilled operator and management team that is devoted 100% to the development and operation of each restaurant. Training for the management team is accomplished through a four to six month training program conducted by Wendy’s training personnel. The training program consists of: in-restaurant training, classroom training and regional orientations. Once the proposed transaction has been completed or the new restaurant is open, Wendy’s provides on-going regional support and a variety of training resources to assist the franchisee.The in-restaurant training is conducted in one or more of Wendy’s approved training restaurants. The classroom training is normally conducted in one of our regional offices. We try to select locations convenient for the trainees but travel for required training should be anticipated in connection with your business plan.
The time needed to become a franchisee varies depending primarily upon the type of opportunity available (purchase of existing restaurants or development of new restaurants) and the management experience of the prospective franchisee, which may result in the completion of Wendy’s training program.
The standard franchise fee is $50,000 for a franchise agreement with a term of 20 years. This fee is used to help defray some of the costs to Wendy’s of providing technical assistance in the development of each Wendy’s restaurant, initial training of the operator and in providing other assistance associated with the opening of the restaurant. Prospective franchisees also pay an initial Application Fee of $5,000 to help defray some of the costs of the initial orientation and processing of the application, along with a $500 background investigation fee. These fees do not include any development or start up costs for the restaurant. There is no additional fee for training, but the franchisee may incur travel expenses or some minor fees for certain specific classes.
In order to use the Wendy’s name, trademarks, national image and logo, franchisees are required to pay a royalty fee of 4% of net sales per restaurant to Wendy’s.
The cost to acquire existing restaurants varies depending upon the number of restaurants and whether the real estate is purchased or under a lease or sublease. If the restaurants are to be acquired from an existing franchisee, the prospective franchisee will negotiate the deal directly with the existing franchisee. Wendy’s approval of the transaction is required and the restaurants must be remodeled by the buyer as a condition of the transfer of franchise rights.
There are many factors that influence the development costs for a new restaurant including, but not limited to: the cost of real estate, building size and design features, local labor and building supplies, permitting, etc. The estimated total investment required to begin operation of a new restaurant normally ranges from $2,000,000 to $3,700,000.
Wendy’s does not currently provide exclusive areas to franchisees. The franchise agreement is issued for the specific restaurant location only. The franchisee does not have a right of first refusal to acquire potential new sites being developed in the area although Wendy’s evaluates each new location as it relates to nearby existing restaurants.
The franchisee selects the location for a new Wendy’s restaurant. Site selection assistance is available from one of Wendy’s real estate representatives. The location and the building plans must be approved by Wendy’s and this approval is part of the process for the grant of a franchise for the restaurant.
Generally, our focus for new single-unit restaurant development is that such development occurs with our existing franchisees or by Wendy’s International for company locations. However, Wendy’s may be willing to evaluate a piece of property that meets its general site requirements as part of the overall franchise application process.
Non-traditional development is an important component of Wendy’s overall growth strategy. We are very interested in candidates who have access to new non-traditional opportunities.
Wendy’s Engineering Department provides franchisees with standard construction documents designed to meet national building codes for construction of Wendy’s standard buildings. These plans are updated by the franchisee’s architect or engineer to meet local requirements. Design services are also available to franchisees who are developing non-standard units for locations within airports, travel centers, university student unions, shopping malls, etc.Under Wendy’s Franchise Development Program (“FDP”), Wendy’s franchisees have the option to contract with Wendy’s as an independent contractor for the performance of project management services for franchisees who build a new Wendy’s Restaurant or remodel an existing Restaurant. The FDP Fee to remodel a Restaurant is $20,000. For new restaurant construction and scrapes and rebuilds, the FDP Fee is $30,000. In addition to the FDP Fee, the franchisee is responsible for all out-of-pocket expenses incurred by Wendy’s on each project, including travel expenses.
Franchisees are required to purchase equipment, food products and some supplies and services from Wendy’s approved suppliers. They must purchase or lease products or services which conform to Wendy’s specifications.