Guarantor/Non-Guarantor

(Wendy’s Restaurants)

Wendy’s Restaurants is the issuer of, and certain of its domestic subsidiaries have guaranteed amounts outstanding under our 10% senior notes. Each of the guaranteeing subsidiaries, including Arby’s and its subsidiaries through the closing of the sale on July 4, 2011, is a direct or indirect 100% owned subsidiary of Wendy’s Restaurants and each has fully and unconditionally guaranteed the 10% senior notes on a joint and several basis. Information related to Arby’s has been reflected as discontinued operations in the accompanying condensed consolidating balance sheet as of July 3, 2011 and condensed consolidating statements of income for the three months and six months ended July 3, 2011 and July 4, 2010. Arby’s cash flows for all periods presented have been included in, and not separately reported from, all our cash flows.

The following are included in the presentation of our consolidating: (1) Condensed Consolidating Balance Sheets as of July 3, 2011 and January 2, 2011, (2) Condensed Consolidating Statements of Income for the three months and six months ended July 3, 2011 and July 4, 2010, and (3) Condensed Consolidating Statements of Cash Flows for the six months ended July 3, 2011 and July 4, 2010 to reflect:

(a)Wendy’s Restaurants (the “Parent”);

(b)the 10% senior notes guarantor subsidiaries as a group;

(c)the 10% senior notes non-guarantor subsidiaries as a group;

(d)elimination entries necessary to combine the Parent with the guarantor and non-guarantor subsidiaries; and

(e)Wendy’s Restaurants on a consolidated basis.

Substantially all of our domestic restricted subsidiaries are guarantors of the 10% senior notes. Certain of our subsidiaries, including our foreign subsidiaries and national advertising funds, do not guarantee the 10% senior notes.

As a result of the closing of the sale of Arby’s on July 4, 2011 as described in Note 2, Arby’s and its subsidiaries are no longer guarantors of the amounts outstanding under the 10% senior notes. Accordingly, condensed consolidating financial statements contained in our future periodic filings will be retroactively revised to reflect Arby’s and its subsidiaries as non-guarantors for all periods presented.

For purposes of presentation of such consolidating information, investments in subsidiaries are accounted for by the Parent on the equity method. The elimination entries are principally necessary to eliminate intercompany balances and transactions.

CONDENSED CONSOLIDATING BALANCE SHEET

July 3, 2011



				Guarantor			Non-guarantor
	Parent			Subsidiaries			Subsidiaries		Eliminations			Total
ASSETS
Current assets:
Cash and cash equivalents	$	36,255		$	152,938		$	33,560	$	—		$	222,753
Accounts and notes receivable	3,677			61,896			4,491		(12		)	70,052
Inventories	—			11,963			1,201		—			13,164
Prepaid expenses and other current assets	4,720			26,479			1,590		—			32,789
Deferred income tax benefit	22,127			20,926			223		—			43,276
Advertising funds restricted assets	—			—			74,472		—			74,472
Current assets of discontinued operations	—			65,246			1,079		—			66,325
Total current assets	66,779			339,448			116,616		(12		)	522,831
Properties	11,477			1,070,660			59,430		—			1,141,567
Goodwill	—			827,228			50,415		—			877,643
Other intangible assets	18,973			1,272,425			26,844		—			1,318,242
Investments	—			—			106,195		—			106,195
Deferred costs and other assets	29,222			36,754			269		—			66,245
Noncurrent assets of discontinued operations	—			396,214			22,641		—			418,855
Net investment in subsidiaries	2,624,049			260,047			—		(2,884,096		)	—
Deferred income tax benefit	83,496			—			—		(83,496		)	—
Due from affiliate	51,593			—			—		(51,593		)	—
Total assets	$	2,885,589		$	4,202,776		$	382,410	$	(3,019,197	)	$	4,451,578

LIABILITIES AND INVESTED EQUITY
Current liabilities:
Current portion of long-term debt	$	5,692		$	909		$	280	$	—		$	6,881
Accounts payable	4,884			49,786			6,404		—			61,074
Accrued expenses and other current liabilities	47,757			139,103			7,417		—			194,277
Advertising funds restricted liabilities	—			—			74,472		—			74,472
Current liabilities of discontinued operations	—			110,636			288		(12		)	110,912
Total current liabilities	58,333			300,434			88,861		(12		)	447,616
Long-term debt	1,017,614			314,572			3,869		—			1,336,055
Due to affiliates	—			75,012			1,184		(51,593		)	24,603
Deferred income	—			18,378			432		—			18,810
Deferred income taxes	—			541,917			17,608		(83,496		)	476,029
Other liabilities	4,719			83,993			9,119		—			97,831
Noncurrent liabilities of discontinued operations	—			244,421			1,290		—			245,711
Invested equity:
Member interest, $0.01 par value; 1,000 shares authorized, one share issued and outstanding	—			—			—		—			—
Other capital	2,429,621			3,253,732			199,014		(3,452,746		)	2,429,621
(Accumulated deficit) retained earnings	(485,586		)	(490,571		)	45,145		445,426			(485,586		)
Advances to The Wendy’s Company	(155,000		)	(155,000		)	—		155,000			(155,000		)
Accumulated other comprehensive income	15,888			15,888			15,888		(31,776		)	15,888
Total invested equity	1,804,923			2,624,049			260,047		(2,884,096		)	1,804,923
Total liabilities and invested equity	$	2,885,589		$	4,202,776		$	382,410	$	(3,019,197	)	$	4,451,578

CONDENSED CONSOLIDATING BALANCE SHEET

January 2, 2011



				Guarantor			Non-guarantor
	Parent			Subsidiaries			Subsidiaries		Eliminations			Total
ASSETS
Current assets:
Cash and cash equivalents	$	79,355		$	88,936		$	30,395	$	—		$	198,686
Accounts and notes receivable	320			79,404			3,628		—			83,352
Inventories	—			21,558			1,136		—			22,694
Prepaid expenses and other current assets	3,900			19,446			686		—			24,032
Deferred income tax benefit	17,634			27,218			215		—			45,067
Advertising funds restricted assets	—			—			76,553		—			76,553
Total current assets	101,209			236,562			112,613		—			450,384
Properties	13,748			1,466,769			61,336		—			1,541,853
Goodwill	—			841,156			47,765		—			888,921
Other intangible assets	21,453			1,310,092			27,029		—			1,358,574
Investments	—			—			102,406		—			102,406
Deferred costs and other assets	32,610			41,274			675		—			74,559
Net investment in subsidiaries	2,559,526			246,578			—		(2,806,104		)	—
Deferred income tax benefit	86,423			—			97		(86,520		)	—
Due from affiliate	59,618			—			17,893		(77,511		)	—
Total assets	$	2,874,587		$	4,142,431		$	369,814	$	(2,970,135	)	$	4,416,697

LIABILITIES AND INVESTED EQUITY
Current liabilities:
Current portion of long-term debt	$	5,228		$	11,587		$	232	$	—		$	17,047
Accounts payable	4,624			70,901			5,623		—			81,148
Accrued expenses and other current liabilities	38,871			195,282			10,147		—			244,300
Advertising funds restricted liabilities	—			—			76,553		—			76,553
Total current liabilities	48,723			277,770			92,555		—			419,048
Long-term debt	1,043,623			495,505			3,556		—			1,542,684
Due to affiliates	—			108,319			—		(77,511		)	30,808
Deferred income	—			10,888			572		—			11,460
Deferred income taxes	—			548,088			16,904		(86,520		)	478,472
Other liabilities	5,611			142,335			9,649		—			157,595
Invested equity:
Member interest, $0.01 par value; 1,000 shares authorized, one share issued and outstanding	—			—			—		—			—
Other capital	2,423,459			3,244,488			199,014		(3,443,502		)	2,423,459
(Accumulated deficit) retained earnings	(499,500		)	(537,633		)	39,594		498,039			(499,500		)
Advances to The Wendy’s Company	(155,000		)	(155,000		)	—		155,000			(155,000		)
Accumulated other comprehensive income	7,671			7,671			7,970		(15,641		)	7,671
Total invested equity	1,776,630			2,559,526			246,578		(2,806,104		)	1,776,630
Total liabilities and invested equity	$	2,874,587		$	4,142,431		$	369,814	$	(2,970,135	)	$	4,416,697

CONDENSED CONSOLIDATING STATEMENT OF INCOME

For the three months ended July 3, 2011



				Guarantor			Non-guarantor
	Parent			Subsidiaries			Subsidiaries			Eliminations			Total

Revenues:
Sales	$	—		$	482,024		$	62,213		$	—		$	544,237
Franchise revenues	—			73,265			4,957			—			78,222
	—			555,289			67,170			—			622,459

Costs and expenses:
Cost of sales	—			410,566			54,232			—			464,798
General and administrative	—			69,520			3,182			—			72,702
Retention program and other transaction related costs	2,946			1,746			—			—			4,692
Depreciation and amortization	2,439			24,769			2,575			—			29,783
Impairment of long-lived assets	—			347			18			—			365
Other operating expense (income), net	—			2,871			(2,393		)	—			478
	5,385			509,819			57,614			—			572,818
Operating (loss) profit	(5,385		)	45,470			9,556			—			49,641
Interest expense	(22,188		)	(5,557		)	(123		)	—			(27,868		)
Other income (expense), net	—			4,233			(4,044		)	—			189
Equity in income of subsidiaries	33,676			4,356			—			(38,032		)	—
Income from continuing operations before income taxes	6,103			48,502			5,389			(38,032		)	21,962
Benefit from (provision for) income taxes	10,566			(18,045		)	(1,486		)	—			(8,965		)
Income from continuing operations	16,669			30,457			3,903			(38,032		)	12,997
Discontinued operations:
Income from discontinued operations, net of income taxes	—			3,219			453			—			3,672
Loss on disposal of discontinued operations, net of income tax benefit	(3,780		)	—			—			—			(3,780		)
Net (loss) income from discontinued operations	(3,780		)	3,219			453			—			(108		)
Net income	$	12,889		$	33,676		$	4,356		$	(38,032	)	$	12,889

CONDENSED CONSOLIDATING STATEMENT OF INCOME

For the three months ended July 4, 2010



				Guarantor			Non-guarantor
	Parent			Subsidiaries			Subsidiaries			Eliminations			Total

Revenues:
Sales	$	—		$	473,766		$	58,645		$	—		$	532,411
Franchise revenues	—			70,175			4,848			—			75,023
	—			543,941			63,493			—			607,434

Costs and expenses:
Cost of sales	—			392,089			50,225			—			442,314
General and administrative	—			70,020			2,208			—			72,228
Depreciation and amortization	3,054			25,467			2,394			—			30,915
Impairment of long-lived assets	—			482			—			—			482
Other operating expense (income), net	—			2,560			(2,437		)	—			123
	3,054			490,618			52,390			—			546,062
Operating (loss) profit	(3,054		)	53,323			11,103			—			61,372
Interest expense	(18,396		)	(10,699		)	(76		)	—			(29,171		)
Loss on early extinguishment of debt	—			(26,197		)	—			—			(26,197		)
Other income (expense), net	84			4,243			(3,845		)	—			482
Equity in income of subsidiaries	20,115			5,669			—			(25,784		)	—
(Loss) income from continuing operations before income taxes	(1,251		)	26,339			7,182			(25,784		)	6,486
Benefit from (provision for) income taxes	10,626			(11,022		)	(2,015		)	—			(2,411		)
Income from continuing operations	9,375			15,317			5,167			(25,784		)	4,075
Discontinued operations:
Income from discontinued operations, net of income taxes	—			4,798			502			—			5,300
Net income	$	9,375		$	20,115		$	5,669		$	(25,784	)	$	9,375

CONDENSED CONSOLIDATING STATEMENT OF INCOME

For the six months ended July 3, 2011



				Guarantor			Non-guarantor
	Parent			Subsidiaries			Subsidiaries			Eliminations			Total

Revenues:
Sales	$	—		$	937,552		$	115,971		$	—		$	1,053,523
Franchise revenues	—			142,023			9,378			—			151,401
	—			1,079,575			125,349			—			1,204,924

Costs and expenses:
Cost of sales	—			800,591			103,078			—			903,669
General and administrative	—			138,012			6,629			—			144,641
Retention program and other transaction related costs	4,225			1,746			—			—			5,971
Depreciation and amortization	5,027			49,366			5,239			—			59,632
Impairment of long-lived assets	—			7,890			372			—			8,262
Other operating expense (income), net	—			5,545			(4,325		)	—			1,220
	9,252			1,003,150			110,993			—			1,123,395
Operating (loss) profit	(9,252		)	76,425			14,356			—			81,529
Interest expense	(45,524		)	(11,320		)	(239		)	—			(57,083		)
Other income (expense), net	—			8,031			(7,629		)	—			402
Equity in income of subsidiaries	47,062			5,551			—			(52,613		)	—
(Loss) income from continuing operations before income taxes	(7,714		)	78,687			6,488			(52,613		)	24,848
Benefit from (provision for) income taxes	25,408			(33,324		)	(1,797		)	—			(9,713		)
Income from continuing operations	17,694			45,363			4,691			(52,613		)	15,135
Discontinued operations:
Income from discontinued operations, net of income taxes	—			1,699			860			—			2,559
Loss on disposal of discontinued operations, net of income tax benefit	(3,780		)	—			—			—			(3,780		)
Net (loss) income from discontinued operations	(3,780		)	1,699			860			—			(1,221		)
Net income	$	13,914		$	47,062		$	5,551		$	(52,613	)	$	13,914

CONDENSED CONSOLIDATING STATEMENT OF INCOME

For the six months ended July 4, 2010



				Guarantor			Non-guarantor
	Parent			Subsidiaries			Subsidiaries			Eliminations			Total

Revenues:
Sales	$	—		$	933,120		$	112,038		$	—		$	1,045,158
Franchise revenues	—			137,709			9,281			—			146,990
	—			1,070,829			121,319			—			1,192,148

Costs and expenses:
Cost of sales	—			776,337			97,314			—			873,651
General and administrative	—			146,067			6,779			—			152,846
Depreciation and amortization	6,225			51,586			5,070			—			62,881
Impairment of long-lived assets	—			482			—			—			482
Other operating expense (income), net	—			5,144			(3,810		)	—			1,334
	6,225			979,616			105,353			—			1,091,194
Operating (loss) profit	(6,225		)	91,213			15,966			—			100,954
Interest expense	(33,622		)	(26,120		)	(155		)	—			(59,897		)
Loss on early extinguishment of debt	—			(26,197		)	—			—			(26,197		)
Other income (expense), net	157			8,147			(7,539		)	—			765
Equity in income of subsidiaries	15,980			6,799			—			(22,779		)	—
(Loss) income from continuing operations before income taxes	(23,710		)	53,842			8,272			(22,779		)	15,625
Benefit from (provision for) income taxes	30,525			(31,481		)	(2,443		)	—			(3,399		)
Income from continuing operations	6,815			22,361			5,829			(22,779		)	12,226
Discontinued operations:
(Loss) income from discontinued operations, net of income taxes	—			(6,381		)	970			—			(5,411		)
Net income	$	6,815		$	15,980		$	6,799		$	(22,779	)	$	6,815

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For the six months ended July 3, 2011



				Guarantor			Non-guarantor
	Parent			Subsidiaries			Subsidiaries			Eliminations			Total
Cash flows from operating activities:
Net income	$	13,914		$	47,062		$	5,551		$	(52,613	)	$	13,914
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in income from operations of subsidiaries	(47,062		)	(5,551		)	—			52,613			—
Depreciation and amortization	5,027			71,473			5,245			—			81,745
Net receipt of deferred vendor incentives	—			19,764			—			—			19,764
Impairment of long-lived assets	—			9,448			372			—			9,820
Tax sharing (receivable from) payable to affiliate, net	(26,857		)	33,572			—			—			6,715
Distributions received from joint venture	—			—			6,501			—			6,501
Share-based compensation provision	2,606			3,556			—			—			6,162
Accretion of long-term debt	1,087			3,076			—			—			4,163
Non-cash rent expense (credit)	—			4,265			(151		)	—			4,114
Write-off and amortization of deferred financing costs	3,503			—			—			—			3,503
Provision for (recovery of) doubtful accounts	—			1,659			(91		)	—			1,568
Tax sharing receipt from (payment to) affiliate, net	29,000			(29,000		)	—			—			—
Deferred income tax (benefit) provision, net	(1,121		)	1,003			—			—			(118		)
Other operating transactions with affiliates	51,211			(50,388		)	(1,920		)	—			(1,097		)
Equity in earnings in joint ventures, net	—						(5,100		)	—			(5,100		)
Tax sharing payment to The Wendy's Company	(13,078		)	—			—			—			(13,078		)
Other, net	(15		)	(295		)	(1,042		)	—			(1,352		)
Changes in operating assets and liabilities:
Accounts and notes receivable	22			(4,516		)	(1,115		)	—			(5,609		)
Inventories	—			(731		)	(19		)	—			(750		)
Prepaid expenses and other current assets	(977		)	(10,387		)	(862		)	—			(12,226		)
Accounts payable	1,343			10,930			1,875			—			14,148
Accrued expenses and other current liabilities	1,131			(5,799		)	(2,737		)	—			(7,405		)
Net cash provided by operating activities	19,734			99,141			6,507			—			125,382
Cash flows from investing activities:
Capital expenditures	(5,437		)	(47,862		)	(2,667		)	—			(55,966		)
Business acquisitions	—			(6,613		)	—			—			(6,613		)
Investment in international joint venture	—			—			(1,183		)	—			(1,183		)
Proceeds from dispositions	—			2,565			—			—			2,565
Other, net	—			(208		)	(17		)	—			(225		)
Net cash used in investing activities	(5,437		)	(52,118		)	(3,867		)	—			(61,422		)
Cash flows from financing activities:
Repayments of long-term debt	(27,361		)	(6,539		)	(81		)	—			(33,981		)
Capital contribution from Parent	(30,000		)	30,000			—			—			—
Deferred financing costs	(36		)	—			—			—			(36		)
Net cash (used in) provided by financing activities	(57,397		)	23,461			(81		)	—			(34,017		)
Net cash (used in) provided by operations before effect of exchange rate changes on cash	(43,100		)	70,484			2,559			—			29,943
Effect of exchange rate changes on cash	—			—			1,200			—			1,200
Net (decrease) increase in cash and cash equivalents	(43,100		)	70,484			3,759			—			31,143
Cash and cash equivalents at beginning of period	79,355			88,936			30,395			—			198,686
Cash and cash equivalents at end of period	$	36,255		$	159,420		$	34,154		$	—		$	229,829

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For the six months ended July 4, 2010



				Guarantor			Non-guarantor
	Parent			Subsidiaries			Subsidiaries			Eliminations			Total
Cash flows from operating activities:
Net income	$	6,815		$	15,980		$	6,799		$	(22,779	)	$	6,815
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Equity in income from operations of subsidiaries	(15,980		)	(6,799		)	—			22,779			—
Depreciation and amortization	6,225			79,038			5,075			—			90,338
Net receipt of deferred vendor incentives	—			19,676			—			—			19,676
Impairment of long-lived assets	—			14,015			—			—			14,015
Accretion of long-term debt	734			10,281			—			—			11,015
Write-off and amortization of deferred financing costs	1,591			7,245			—			—			8,836
Share-based compensation provision	1,796			4,431			—			—			6,227
Distributions received from joint venture	—			—			5,793			—			5,793
Non-cash rent expense (credit)	—			5,096			(151		)	—			4,945
Provision for (recovery of) doubtful accounts	—			3,788			(212		)	—			3,576
Tax sharing receipt from (payment to) affiliate, net	32,000			(32,000		)	—			—			—
Tax sharing (receivable from) payable to affiliate, net	(25,735		)	26,715			—			—			980
Equity in earnings in joint venture	—			—			(4,480		)	—			(4,480		)
Deferred income tax benefit, net	—			(3,433		)	—			—			(3,433		)
Other operating transactions with affiliates	(37,830		)	36,476			(151		)	—			(1,505		)
Other, net	2,315			(529		)	(1,715		)	—			71
Changes in operating assets and liabilities net:													—
Accounts and notes receivable	(41		)	(6,793		)	67			—			(6,767		)
Inventories	—			552			64			—			616
Prepaid expenses and other current assets	(416		)	(6,505		)	(880		)	—			(7,801		)
Accounts payable	(229		)	(11,445		)	(1,262		)	—			(12,936		)
Accrued expenses and other current liabilities	(8,869		)	(14,406		)	(4,262		)	—			(27,537		)
Net cash (used in) provided by operating activities	(37,624		)	141,383			4,685			—			108,444
Cash flows from investing activities:
Capital expenditures	(7,918		)	(41,876		)	(2,936		)	—			(52,730		)
Proceeds from dispositions	—			4,111			—			—			4,111
Other, net	—			50			826			—			876
Net cash used in investing activities	(7,918		)	(37,715		)	(2,110		)	—			(47,743		)
Cash flows from financing activities:
Proceeds from long-term debt	497,500			161			—			—			497,661
Repayments of long-term debt	(107		)	(458,370		)	(99		)	—			(458,576		)
Deferred financing costs	(14,375		)	—			—			—			(14,375		)
Capital contributions from Parent	(474,569		)	474,569			—			—			—
Dividends paid to The Wendy’s Company	(148,700		)	(295,000		)	—			—			(443,700		)
Net cash used in financing activities	(140,251		)	(278,640		)	(99		)	—			(418,990		)
Net cash (used in) provided by operations before effect of exchange rate changes on cash	(185,793		)	(174,972		)	2,476			—			(358,289		)
Effect of exchange rate changes on cash	—			—			(262		)	—			(262		)
Net (decrease) increase in cash and cash equivalents	(185,793		)	(174,972		)	2,214			—			(358,551		)
Cash and cash equivalents at beginning of period	237,607			268,762			32,495			—			538,864
Cash and cash equivalents at end of period	$	51,814		$	93,790		$	34,709		$	—		$	180,313