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Wendy's/Arby's exploring options for Arby's

Company may sell Arby’s to focus more on Wendy’s

Wendy’s/Arby’s Group Inc. is exploring strategic alternatives for Arby’s, including a possible sale of the brand, the company said Thursday.

Nelson Peltz, chairman of Wendy's/Arby's Group, said a divestiture of the 3,700-unit chain would help it focus on its 6,600-unit Wendy’s, the third-largest quick-service burger chain behind McDonald’s and Burger King.

“We believe the way to maximize shareholder value is to focus all of our management and financial resources on continuing to build the Wendy’s brand,” he said.

The sale would end the somewhat new Wendy’s/Arby’s Group, which was formed in 2008 when the Peltz-led Triarc Cos. Inc., then the parent of Arby’s Restaurant Group Inc., acquired Wendy’s International Inc. for around $2.3 billion. Roland Smith took the helm at Wendy’s and Wendy’s/Arby’s shortly after the merger.

In the company statement, Smith said Wendy’s is “one of the most attractive growth stories in the quick-service restaurant industry.”

“A pure-play Wendy's will enable us to focus all of our energies on growing the Wendy’s brand via new store growth both in North America and international markets,” he said, “and with accelerated same-store sales through the introduction of new dayparts and core menu innovation.”

Since the merger, the company has struggled to reverse negative sales trends at Arby’s, as well as executing the tail end of a turnaround at Wendy’s, including new marketing, new menu items and the introduction of breakfast tests that still have yet to go national. For the latest quarter ended Oct. 3, Arby’s systemwide same-store sales fell 5.9 percent and Wendy’s systemwide same-store sales fell 1.7 percent.

Peltz noted that Arby’s has started to see sales improvements, with a 3.1-percent uptick in same-store sales for the fourth quarter. Full company results are expected at the end of the month.

“Despite Arby’s positive momentum, the reality is that the Wendy's brand, given its relative size and scope, is the key driver of shareholder return, and we believe we should focus on the execution of the compelling growth opportunities at Wendy’s,” he said.

Wendy’s/Arby’s is the second major restaurant company this week to disclose plans to sell off secondary brands, following Yum! Brands Inc.’s announcement Tuesday that it was divesting Long John Silver’s and A&W All American Food to focus on its three core brands of Taco Bell, Pizza Hut and KFC.

Contact Molly Gise at [email protected].

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