Guarantor/Non-Guarantor

(Wendy’s Restaurants)

Wendy’s Restaurants is the issuer of, and certain of its domestic subsidiaries have guaranteed amounts outstanding under, the Senior Notes. Each of the guaranteeing subsidiaries is a direct or indirect 100% owned subsidiary of Wendy’s Restaurants and each has fully and unconditionally guaranteed the Senior Notes on a joint and several basis.

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 guaranteeing subsidiaries of the amounts outstanding under the Senior Notes. Accordingly, the condensed consolidating financial statements presented below have been retroactively revised to reflect Arby’s and its subsidiaries as non-guarantors for all periods presented. Information related to Arby’s has been reflected as discontinued operations in the condensed consolidating statements of operations for the period from January 3, 2011 through July 3, 2011 and the years ended January 2, 2011 and January 3, 2010. Arby’s cash flows prior to its sale (for the period from January 3, 2011 through July 3, 2011 and for the years ended January 2, 2011 and January 3, 2010) have been included in, and not separately reported from, all our cash flows.

The following are included in the presentation of our: (1) Condensed Consolidating Balance Sheets as of January 1, 2012 and January 2, 2011, (2) Condensed Consolidating Statements of Operations for the years ended January 1, 2012, January 2, 2011, and January 3, 2010, and (3) Condensed Consolidating Statements of Cash Flows for the years ended January 1, 2012, January 2, 2011, and January 3, 2010 to reflect:

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

(b)the Senior Notes guarantor subsidiaries as a group;

(c)the 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 Senior Notes. Certain of our subsidiaries, including our foreign subsidiaries and national advertising funds, do not guarantee the Senior Notes.

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

January 1, 2012



				Guarantor			Non-guarantor
	Parent			Subsidiaries			Subsidiaries			Eliminations			Total
ASSETS
Current assets:
Cash and cash equivalents	$	174,638		$	128,818		$	43,192		$	—		$	346,648
Accounts and notes receivable	2,682			59,137			5,634			—			67,453
Inventories	—			11,766			1,137			—			12,903
Prepaid expenses and other current assets	5,446			11,732			1,230			—			18,408
Deferred income tax benefit	59,737			34,226			1,000			—			94,963
Advertising funds restricted assets	—			—			69,672			—			69,672
Total current assets	242,503			245,679			121,865			—			610,047
Properties	12,431			1,120,383			59,382			—			1,192,196
Goodwill	—			828,411			145,133			(97,836		)	875,708
Other intangible assets	18,011			1,262,070			24,207			—			1,304,288
Investments	19,000			—			95,651			—			114,651
Deferred costs and other assets	26,446			40,131			250			—			66,827
Net investment in subsidiaries	2,253,006			348,931			—			(2,601,937		)	—
Deferred income tax benefit	29,269			—			—			(29,269		)	—
Due from affiliate	295,080			—			—			(295,080		)	—
Total assets	$	2,895,746		$	3,845,605		$	446,488		$	(3,024,122	)	$	4,163,717

LIABILITIES AND INVESTED EQUITY
Current liabilities:
Current portion of long-term debt	$	3,952		$	923		$	262		$	—		$	5,137
Accounts payable	9,215			64,251			7,520			—			80,986
Accrued expenses and other current liabilities	62,209			137,105			12,836			—			212,150
Advertising funds restricted liabilities	—			—			69,672			—			69,672
Total current liabilities	75,376			202,279			90,290			—			367,945
Long-term debt	1,017,401			319,643			3,515			—			1,340,559
Due to affiliates	—			308,654			1,794			(295,080		)	15,368
Deferred income	—			6,132			391			—			6,523
Deferred income taxes	—			551,579			15,379			(29,269		)	537,689
Other liabilities	3,305			84,647			8,017			—			95,969
Invested equity:
Member interest, $0.01 par value; 1,000 shares authorized, one share issued and outstanding	—			—			—			—			—
Other capital	2,440,130			2,168,046			332,707			(2,500,753		)	2,440,130
(Accumulated deficit) retained earnings	(486,567		)	358,524			(6,706		)	(351,818		)	(486,567		)
Advances to The Wendy’s Company	(155,000		)	(155,000		)	—			155,000			(155,000		)
Accumulated other comprehensive income	1,101			1,101			1,101			(2,202		)	1,101
Total invested equity	1,799,664			2,372,671			327,102			(2,699,773		)	1,799,664
Total liabilities and invested equity	$	2,895,746		$	3,845,605		$	446,488		$	(3,024,122	)	$	4,163,717

CONDENSED CONSOLIDATING BALANCE SHEET

January 2, 2011



				Guarantor			Non-guarantor
	Parent			Subsidiaries			Subsidiaries			Eliminations			Total
ASSETS
Current assets:
Cash and cash equivalents	$	79,355		$	53,810		$	65,521		$	—		$	198,686
Accounts and notes receivable	320			61,508			21,524			—			83,352
Inventories	—			12,522			10,172			—			22,694
Prepaid expenses and other current assets	3,900			12,434			7,698			—			24,032
Deferred income tax benefit	17,634			20,926			6,507			—			45,067
Advertising funds restricted assets	—			—			76,553			—			76,553
Total current assets	101,209			161,200			187,975			—			450,384
Properties	13,748			1,084,546			443,559			—			1,541,853
Goodwill	—			823,539			65,382			—			888,921
Other intangible assets	21,453			1,285,615			51,506			—			1,358,574
Investments	—			—			102,406			—			102,406
Deferred costs and other assets	32,610			32,384			9,565			—			74,559
Net investment in subsidiaries	2,559,526			381,828			—			(2,941,354		)	—
Deferred income tax benefit	86,423			—			—			(86,423		)	—
Due from affiliate	59,618			—			—			(59,618		)	—
Total assets	$	2,874,587		$	3,769,112		$	860,393		$	(3,087,395	)	$	4,416,697

LIABILITIES AND INVESTED EQUITY
Current liabilities:
Current portion of long-term debt	$	5,228		$	687		$	11,132		$	—		$	17,047
Accounts payable	4,624			52,242			24,282			—			81,148
Accrued expenses and other current liabilities	38,871			128,089			77,340			—			244,300
Advertising funds restricted liabilities	—			—			76,553			—			76,553
Total current liabilities	48,723			181,018			189,307			—			419,048
Long-term debt	1,043,623			310,339			188,722			—			1,542,684
Due to affiliates	—			60,653			29,773			(59,618		)	30,808
Deferred income	—			6,291			5,169			—			11,460
Deferred income taxes	—			541,800			23,095			(86,423		)	478,472
Other liabilities	5,611			86,993			64,991			—			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			1,077,762			(4,322,250		)	2,423,459
Accumulated deficit	(499,500		)	(515,141		)	(726,097		)	1,241,238			(499,500		)
Advances to The Wendy’s Company	(155,000		)	(155,000		)	—			155,000			(155,000		)
Accumulated other comprehensive income	7,671			7,671			7,671			(15,342		)	7,671
Total invested equity	1,776,630			2,582,018			359,336			(2,941,354		)	1,776,630
Total liabilities and invested equity	$	2,874,587		$	3,769,112		$	860,393		$	(3,087,395	)	$	4,416,697

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the year ended January 1, 2012



				Guarantor			Non-guarantor
	Parent			Subsidiaries			Subsidiaries			Eliminations			Total

Revenues:
Sales	$	—		$	1,891,033		$	235,598		$	(87	)	$	2,126,544
Franchise revenues	—			285,743			19,085			(14		)	304,814
	—			2,176,776			254,683			(101		)	2,431,358

Costs and expenses:
Cost of sales	—			1,608,896			207,213			—			1,816,109
General and administrative	—			248,793			32,798			—			281,591
Depreciation and amortization	10,629			100,994			10,742			—			122,365
Impairment of long-lived assets	—			12,346			537			—			12,883
Transaction related and other costs	38,349			6,128			—			—			44,477
Other operating expense (income), net	1,005			10,971			(7,935		)	—			4,041
	49,983			1,988,128			243,355			—			2,281,466
Operating (loss) profit	(49,983		)	188,648			11,328			(101		)	149,892
Interest expense	(89,999		)	(22,734		)	(510		)	—			(113,243		)
Other income (expense), net	282			17,282			(16,621		)	—			943
Equity in income (loss) of subsidiaries	106,218			(9,211		)	—			(97,007		)	—
(Loss) income from continuing operations before income taxes	(33,482		)	173,985			(5,803		)	(97,108		)	37,592
Benefit from (provision for) income taxes	55,214			(68,428		)	(3,408		)	—			(16,622		)
Income (loss) from continuing operations	21,732			105,557			(9,211		)	(97,108		)	20,970
Discontinued operations:
Income from discontinued operations, net of income taxes	—			—			661			101			762
Loss on disposal of discontinued operations, net of income taxes	(8,799		)	—			—			—			(8,799		)
(Loss) income from discontinued operations, net of income taxes	(8,799		)	—			661			101			(8,037		)
Net income (loss)	$	12,933		$	105,557		$	(8,550	)	$	(97,007	)	$	12,933

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the year ended January 2, 2011



				Guarantor			Non-guarantor
	Parent			Subsidiaries			Subsidiaries			Eliminations			Total

Revenues:
Sales	$	—		$	1,853,269		$	225,837		$	(25	)	$	2,079,081
Franchise revenues	—			277,496			18,899			(37		)	296,358
	—			2,130,765			244,736			(62		)	2,375,439

Costs and expenses:
Cost of sales	—			1,562,141			194,813			—			1,756,954
General and administrative	—			258,289			45,035			—			303,324
Depreciation and amortization	11,920			102,148			10,916			—			124,984
Impairment of long-lived assets	—			22,458			3,868			—			26,326
Other operating expense (income), net	—			10,887			(7,393		)	—			3,494
	11,920			1,955,923			247,239			—			2,215,082
Operating (loss) profit	(11,920		)	174,842			(2,503		)	(62		)	160,357
Interest expense	(78,737		)	(29,044		)	(9,568		)	—			(117,349		)
Loss on early extinguishment of debt	—			(20,430		)	(5,767		)	—			(26,197		)
Other income (expense), net	158			16,051			(14,892		)	—			1,317
Equity in income (loss) of subsidiaries	19,446			(50,152		)	—			30,706			—
(Loss) income from continuing operations before income taxes	(71,053		)	91,267			(32,730		)	30,644			18,128
Benefit from (provision for) income taxes	68,415			(49,323		)	(17,422		)	—			1,670
(Loss) income from continuing operations	(2,638		)	41,944			(50,152		)	30,644			19,798
Discontinued operations:
Loss from discontinued operations, net of income taxes	—			—			(22,492		)	56			(22,436		)
Net (loss) income	$	(2,638	)	$	41,944		$	(72,644	)	$	30,700		$	(2,638	)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the year ended January 3, 2010



				Guarantor			Non-guarantor
	Parent			Subsidiaries			Subsidiaries			Eliminations		Total

Revenues:
Sales	$	—		$	1,918,781		$	215,461		$	—	$	2,134,242
Franchise revenues	—			284,955			17,898			—		302,853
	—			2,203,736			233,359			—		2,437,095

Costs and expenses:
Cost of sales	—			1,619,733			192,319			—		1,812,052
General and administrative	—			290,755			52,366			—		343,121
Depreciation and amortization	4,270			117,824			10,224			—		132,318
Impairment of long-lived assets	—			23,443			—			—		23,443
Merger restructuring	4,283			3,402			403			—		8,088
Other operating expense (income), net	—			10,201			(7,748		)	—		2,453
	8,553			2,065,358			247,564			—		2,321,475
Operating (loss) profit	(8,553		)	138,378			(14,205		)	—		115,620
Interest expense	(32,064		)	(42,323		)	(31,175		)	—		(105,562		)
Other income (expense), net	24			10,411			(15,035		)	—		(4,600		)
Equity in loss of subsidiaries	(52,890		)	(125,862		)	—			178,752		—
(Loss) income from continuing operations before income taxes	(93,483		)	(19,396		)	(60,415		)	178,752		5,458
Benefit from (provision for) income taxes	103,132			(31,632		)	(65,447		)	—		6,053
Income (loss) from continuing operations	9,649			(51,028		)	(125,862		)	178,752		11,511
Discontinued operations:
Loss from discontinued operations, net of income taxes	—			—			(1,862		)	—		(1,862		)
Net income (loss)	$	9,649		$	(51,028	)	$	(127,724	)	$	178,752	$	9,649

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For the year ended January 1, 2012



				Guarantor			Non-guarantor
	Parent			Subsidiaries			Subsidiaries			Eliminations			Total
Cash flows from operating activities:
Net income (loss)	$	12,933		$	105,557		$	(8,550	)	$	(97,007	)	$	12,933
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Equity in (income) loss from operations of subsidiaries	(106,218		)	9,211			—			97,007			—
Depreciation and amortization	10,826			100,994			32,855			—			144,675
Share-based compensation provision	9,301			6,694			672			—			16,667
Distributions received from joint venture	—			—			14,942			—			14,942
Impairment of long-lived assets	—			12,346			2,095			—			14,441
Deferred income tax provision (benefit), net	11,307			852			(441		)	—			11,718
Loss on disposal of Arby’s	8,799			—			—			—			8,799
Accretion of long-term debt	2,102			5,854			164			—			8,120
Non-cash rent expense (credit)	—			7,892			(341		)	—			7,551
Net (recognition) receipt of deferred vendor incentives	—			(17		)	7,087			—			7,070
Write-off and amortization of deferred financing costs	6,204			—			—			—			6,204
Tax sharing (receivable from) payable to affiliate, net	(66,808		)	69,245			—			—			2,437
Provision for doubtful accounts	—			113			2,321			—			2,434
Tax sharing receipt from (payment to) affiliate, net	52,000			(52,000		)	—			—			—
Other operating transactions with affiliates	78,148			(28,885		)	(55,294		)	—			(6,031		)
Equity in earnings in joint ventures, net	—			—			(9,465		)	—			(9,465		)
Tax sharing payment to The Wendy’s Company	(13,078		)	—			—			—			(13,078		)
Other, net	(1,794		)	3,806			(1,678		)	—			334
Changes in operating assets and liabilities:
Accounts and notes receivable	22			1,152			(4,074		)	—			(2,900		)
Inventories	(6		)	856			(1,367		)	—			(517		)
Prepaid expenses and other current assets	(2,715		)	(1,953		)	(3,193		)	—			(7,861		)
Accounts payable	3,554			3,069			4,463			—			11,086
Accrued expenses and other current liabilities	15,802			1,003			(1,259		)	—			15,546
Net cash provided by (used in) operating activities	20,379			245,789			(21,063		)	—			245,105
Cash flows from investing activities:
Capital expenditures	(9,742		)	(119,827		)	(17,194		)	—			(146,763		)
Restaurant acquisitions	—			(11,210		)	—			—			(11,210		)
Franchise incentive loans	—			(4,003		)	—			—			(4,003		)
Investment in joint venture	—			(1,183		)	—			—			(1,183		)
Proceeds from sale of Arby’s, net of Arby’s cash	105,001			—			(7,076		)	—			97,925
Proceeds from other dispositions	11			6,113			836			—			6,960
Other, net	—			—			(265		)	—			(265		)
Net cash provided by (used in) investing activities	95,270			(130,110		)	(23,699		)	—			(58,539		)
Cash flows from financing activities:
Repayments of long-term debt	(30,309		)	(671		)	(6,354		)	—			(37,334		)
Capital contribution from Parent	(30,000		)	—			30,000			—			—
Dividend paid to Parent	40,000			(40,000		)	—			—			—
Deferred financing costs	(57		)	—			—			—			(57		)
Net cash (used in) provided by financing activities	(20,366		)	(40,671		)	23,646			—			(37,391		)
Net cash provided by (used in) operations before effect of exchange rate changes on cash	95,283			75,008			(21,116		)	—			149,175
Effect of exchange rate changes on cash	—			—			(1,213		)	—			(1,213		)
Net increase (decrease) in cash and cash equivalents	95,283			75,008			(22,329		)	—			147,962
Cash and cash equivalents at beginning of period	79,355			53,810			65,521			—			198,686
Cash and cash equivalents at end of period	$	174,638		$	128,818		$	43,192		$	—		$	346,648

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For the year ended January 2, 2011



				Guarantor			Non-guarantor
	Parent			Subsidiaries			Subsidiaries			Eliminations			Total
Cash flows from operating activities:
Net (loss) income	$	(2,638	)	$	41,944		$	(72,644	)	$	30,700		$	(2,638	)
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Equity in (income) loss from operations of subsidiaries	(19,446		)	50,152			—			(30,706		)	—
Depreciation and amortization	11,920			102,148			66,242			—			180,310
Impairment of long-lived assets	—			22,458			47,019			—			69,477
Accretion of long-term debt	1,705			13,022			289			—			15,016
Distributions received from joint venture	—			—			13,980			—			13,980
Share-based compensation provision	3,951			5,624			3,215			—			12,790
Write-off and amortization of deferred financing costs	4,518			—			7,245			—			11,763
Provision for doubtful accounts	—			1,703			7,991			—			9,694
Non-cash rent expense (credit)	—			9,375			(41		)	—			9,334
Tax sharing (receivable from) payable to affiliate, net	(49,736		)	50,788			—			—			1,052
Tax sharing receipt from (payment to) affiliate, net	56,000			(56,000		)	—			—			—
Net (recognition) receipt of deferred vendor incentives	—			(1,495		)	908			—			(587		)
Other operating transactions with affiliates	(20,370		)	(55,099		)	67,437			—			(8,032		)
Equity in earnings in joint venture	—			—			(9,459		)	—			(9,459		)
Deferred income tax benefit, net	(18,351		)	(5,308		)	(2,093		)	—			(25,752		)
Other, net	2,406			4,792			(7,708		)	6			(504		)
Changes in operating assets and liabilities net:
Accounts and notes receivable	(61		)	4,724			(8,856		)	—			(4,193		)
Inventories	—			(503		)	897			—			394
Prepaid expenses and other current assets	1,017			(2,148		)	1,886			—			755
Accounts payable	2,341			(9,270		)	(7,255		)	—			(14,184		)
Accrued expenses and other current liabilities	(3,808		)	(30,727		)	6,573			—			(27,962		)
Net cash (used in) provided by operating activities	(30,552		)	146,180			115,626			—			231,254
Cash flows from investing activities:
Capital expenditures	(17,075		)	(66,817		)	(64,077		)	—			(147,969		)
Cost of acquisitions, less cash acquired	—			(3,123		)	—			—			(3,123		)
Proceeds from dispositions	—			3,405			2,255			—			5,660
Other, net	—			—			1,263			—			1,263
Net cash used in investing activities	(17,075		)	(66,535		)	(60,559		)	—			(144,169		)
Cash flows from financing activities:
Proceeds from long-term debt	497,500			—			161			—			497,661
Repayments of long-term debt	(2,716		)	(200,708		)	(263,037		)	—			(466,461		)
Dividends paid to The Wendy’s Company	(443,700		)	—			—			—			(443,700		)
Deferred financing costs	(16,353		)	—			—			—			(16,353		)
Dividends paid to Parent	375,000			(361,000		)	(14,000		)	—			—
Capital contributions from Parent	(520,335		)	260,766			259,569			—			—
Redemption of preferred stock	—			19,877			(19,877		)	—			—
Other, net	(21		)	—			—			—			(21		)
Net cash used in financing activities	(110,625		)	(281,065		)	(37,184		)	—			(428,874		)
Net cash (used in) provided by operations before effect of exchange rate changes on cash	(158,252		)	(201,420		)	17,883			—			(341,789		)
Effect of exchange rate changes on cash	—			—			1,611			—			1,611
Net (decrease) increase in cash and cash equivalents	(158,252		)	(201,420		)	19,494			—			(340,178		)
Cash and cash equivalents at beginning of period	237,607			255,230			46,027			—			538,864
Cash and cash equivalents at end of period	$	79,355		$	53,810		$	65,521		$	—		$	198,686

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For the year ended January 3, 2010



				Guarantor			Non-guarantor
	Parent			Subsidiaries			Subsidiaries			Eliminations			Total
Cash flows from operating activities:
Net income (loss)	$	9,649		$	(51,028	)	$	(127,724	)	$	178,752		$	9,649
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Equity in loss from operations of subsidiaries	52,890			125,862			—			(178,752		)	—
Depreciation and amortization	4,270			117,824			66,412			—			188,506
Impairment of long-lived assets	—			23,443			56,513			—			79,956
Tax sharing (receivable from) payable to affiliate, net	(9,648		)	53,923			(3,862		)	—			40,413
Write-off and amortization of deferred financing costs	1,632			4,600			9,564			—			15,796
Distributions received from joint venture	—			—			14,583			—			14,583
Other operating transactions with affiliates	(33,506		)	15,848			31,772			—			14,114
Share-based compensation provision	3,550			6,648			3,372			—			13,570
Non-cash rent expense	—			10,685			1,933			—			12,618
Accretion of long-term debt	718			9,395			287			—			10,400
Provision for doubtful accounts	—			868			7,301			—			8,169
Net receipt (recognition) of deferred vendor incentives	—			524			(1,315		)	—			(791		)
Equity in earnings in joint venture	—			—			(8,499		)	—			(8,499		)
Tax sharing payment to affiliate, net	—			(10,417		)	—			—			(10,417		)
Deferred income tax (benefit) provision, net	(94,686		)	(48,238		)	74,383			—			(68,541		)
Other, net	(559		)	10,110			(3,998		)	—			5,553
Changes in operating assets and liabilities net:
Accounts and notes receivable	(29		)	2,787			(10,437		)	—			(7,679		)
Inventories	—			517			1,362			—			1,879
Prepaid expenses and other current assets	(4,918		)	5,597			442			—			1,121
Accounts payable	1,794			(43,205		)	(11,149		)	—			(52,560		)
Accrued expenses and other current liabilities	41,301			41,730			(29,241		)	—			53,790
Net cash (used in) provided by operating activities	(27,542		)	277,473			71,699			—			321,630
Cash flows from investing activities:
Capital expenditures	(17,113		)	(50,812		)	(33,989		)	—			(101,914		)
Cost of acquisitions, less cash acquired	—			(664		)	(1,693		)	—			(2,357		)
Proceeds from dispositions	—			9,785			1,097			—			10,882
Other, net	—			(456		)	648			—			192
Net cash used in investing activities	(17,113		)	(42,147		)	(33,937		)	—			(93,197		)
Cash flows from financing activities:
Proceeds from long-term debt	551,061			26,550			29,896			—			607,507
Repayments of long-term debt	(52		)	(39,107		)	(170,323		)	—			(209,482		)
Dividends paid to The Wendy’s Company	(115,000		)	—			—			—			(115,000		)
Capital contributions from Parent	(132,500		)	—			132,500			—			—
Other, net	(21,247		)	(3,951		)	(13,201		)	—			(38,399		)
Net cash provided by (used in) financing activities	282,262			(16,508		)	(21,128		)	—			244,626
Net cash provided by operations before effect of exchange rate changes on cash	237,607			218,818			16,634			—			473,059
Effect of exchange rate changes on cash	—			—			2,725			—			2,725
Net increase in cash and cash equivalents	237,607			218,818			19,359			—			475,784
Cash and cash equivalents at beginning of period	—			36,412			26,668			—			63,080
Cash and cash equivalents at end of period	$	237,607		$	255,230		$	46,027		$	—		$	538,864