Transactions with Related Parties (Tables)

12 Months Ended

Dec. 29, 2019

The following is a summary of transactions between the Company and its related parties:



	Year Ended
	2019			2018			2017
Transactions with QSCC:
Wendy’s Co-Op (a)	$	(504	)	$	(470	)	$	(987	)
Lease income (b)	(217		)	(215		)	(217		)
TimWen lease and management fee payments (c)	$	16,660		$	13,044		$	12,360

_______________

Transactions with QSCC

(a)

Wendy’s has a purchasing co-op relationship agreement (the “Wendy’s Co-op”) with its franchisees which establishes Quality Supply Chain Co-op, Inc. (“QSCC”). QSCC manages, for the Wendy’s system in the U.S. and Canada, contracts for the purchase and distribution of food, proprietary paper, operating supplies and equipment under national agreements with pricing based upon total system volume. QSCC’s supply chain management facilitates continuity of supply and provides consolidated purchasing efficiencies while monitoring and seeking to minimize possible obsolete inventory throughout the Wendy’s supply chain in the U.S. and Canada.

Wendy’s and its franchisees pay sourcing fees to third-party vendors on certain products sourced by QSCC. Such sourcing fees are remitted by these vendors to QSCC and are the primary means of funding QSCC’s operations. Should QSCC’s sourcing fees exceed its expected needs, QSCC’s board of directors may return some or all of the excess to its members in the form of a patronage dividend. Wendy’s recorded its share of patronage dividends of $504, $470 and $987 in 2019, 2018 and 2017, respectively, which are included as a reduction of “Cost of sales.”

(b)

Pursuant to a lease agreement entered into on January 1, 2017, Wendy’s leased 14,333 square feet of office space to QSCC for an annual base rental of $215. The lease expires on December 31, 2020. In November 2018, the lease agreement was amended to increase the leased square footage to 14,493 and to increase the annual base rental to $217. The Company received $217, $215 and $217 of lease income from QSCC during 2019, 2018 and 2017, respectively, which has been recorded to “Franchise rental income.”

TimWen lease and management fee payments

(c)

A wholly-owned subsidiary of Wendy’s leases restaurant facilities from TimWen, which are then subleased to franchisees for the operation of Wendy’s/Tim Hortons combo units in Canada. Wendy’s paid TimWen $16,867, $13,256 and $12,572 under these lease agreements during 2019, 2018 and 2017, respectively. In addition, TimWen paid Wendy’s a management fee under the TimWen joint venture agreement of $207, $212 and $212 during 2019, 2018 and 2017, respectively, which has been included as a reduction to “General and administrative.”