Cash and Receivables (Notes)

6 Months Ended

Jun. 28, 2020

Cash and Receivables Disclosure [Text Block]

Cash and Receivables


	June 28, 2020		December 29, 2019
Cash and cash equivalents
Cash	$	202,939	$	185,203
Cash equivalents	135,063		114,992
	338,002		300,195
Restricted cash
Accounts held by trustee for the securitized financing facility	30,274		34,209
Other	332		330
	30,606		34,539
Advertising Funds (a)	40,850		23,973
	71,456		58,512
Total cash, cash equivalents and restricted cash	$	409,458	$	358,707

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(a)Included in “Advertising funds restricted assets.”


	June 28, 2020										December 29, 2019
	Gross		Allowance for Doubtful Accounts		Net		Gross		Allowance for Doubtful Accounts		Net
Accounts and Notes Receivable, Net
Current
Accounts receivable (a) (b)	$	125,021	$	(4,404)	$	120,617	$	103,852	$	(3,314)	$	100,538
Notes receivable from franchisees (c) (d)	18,572		(4,670)		13,902		23,628		(6,705)		16,923
	$	143,593	$	(9,074)	$	134,519	$	127,480	$	(10,019)	$	117,461
Non-current (e)
Notes receivable from franchisees (d)	$	6,425	$	(835)	$	5,590	$	1,617	$	—	$	1,617

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(a)Includes income tax refund receivables of $5,933 and $13,555 as of June 28, 2020 and December 29, 2019, respectively. Additionally, 2019 includes receivables of $25,350 related to insurance coverage for the financial institutions class action.

(b)During the six months ended June 28, 2020, royalty receivables increased by $47,740 and rent receivables increased by $6,111. These increases were primarily due to actions taken by the Company in response to the COVID-19 pandemic, which included (1) extending payment terms for royalties by 45 days beginning in April for a three month period and (2) offering to defer base rent payments on properties owned by Wendy’s and leased to franchisees by 50%, and offering to pass along any deferrals that were obtained on properties leased by Wendy’s and subleased to franchisees by up to 100%, beginning in May for a three month period, which will be repaid over 12 months beginning in August.

(c)Includes the current portion of sales-type and direct financing lease receivables of $3,780 and $3,146 as of June 28, 2020 and December 29, 2019, respectively.

Included a note receivable from a U.S. franchisee totaling $1,000 as of December 29, 2019. The note was repaid during the six months ended June 28, 2020.

(d)Includes a note receivable from a franchisee in India, of which $150 and $1,000 are included in current notes receivable as of June 28, 2020 and December 29, 2019, respectively, and $1,010 is included in non-current notes receivable as of June 28, 2020. As of June 28, 2020 and December 29, 2019, the Company had a reserve of $985 on the loan outstanding to the franchisee in India.

Includes a note receivable from a franchisee in Indonesia, of which $1,367 and $1,262 are included in current notes receivable and $1,065 and $1,617 are included in non-current notes receivable as of June 28, 2020 and December 29, 2019, respectively.

Includes notes receivable related to a joint venture for the operation of Wendy’s restaurants in Brazil (the “Brazil JV”), of which $11,975 and $15,920 are included in current notes receivable as of June 28, 2020 and December 29, 2019, respectively, and $4,350 is included in non-current notes receivable as of June 28, 2020. As of June 28, 2020 and December 29, 2019, the Company had reserves of $4,520 and $5,720, respectively, on the loans outstanding related to the Brazil JV.

(e)Included in “Other assets.”

Reserve estimates include consideration of the likelihood of default expected over the estimated life of the receivable. The Company periodically assesses the need for an allowance for doubtful accounts on its receivables based upon several key credit quality indicators such as outstanding past due balances, the financial strength of the obligor, the estimated fair value of any underlying collateral and agreement characteristics. We believe that our vulnerability to risk concentrations in our receivables is mitigated by (1) favorable historical collectability on past due balances, (2) recourse to the underlying collateral regarding sales-type and direct financing lease receivables, and (3) our expectations for fluctuations in general market conditions. Receivables are considered delinquent once they are contractually past due under the terms of the underlying agreements. As of June 28, 2020, there were no material receivables more than one year past due.

The following is an analysis of the allowance for doubtful accounts:


	Accounts Receivable		Notes Receivable		Total
Six Months Ended June 28, 2020
Balance at December 29, 2019	$	3,314	$	6,705	$	10,019
Provision for doubtful accounts	1,156		(8)		1,148
Uncollectible accounts written off, net of recoveries	(66)		(1,192)		(1,258)
Balance at June 28, 2020	$	4,404	$	5,505	$	9,909

Six Months Ended June 30, 2019
Balance at December 30, 2018	$	4,940	$	2,000	$	6,940
Provision for doubtful accounts	(754)		1,843		1,089
Uncollectible accounts written off, net of recoveries	(139)		7		(132)
Balance at June 30, 2019	$	4,047	$	3,850	$	7,897