Revenue (Notes)

9 Months Ended

Sep. 27, 2020

Revenue

Disaggregation of Revenue

The following tables disaggregate revenue by segment and source:


	Wendy’s U.S.		Wendy’s International		Global Real Estate & Development		Total
Three Months Ended September 27, 2020
Sales at Company-operated restaurants	$	191,946	$	—	$	—	$	191,946
Franchise royalty revenue	98,128		11,216		—		109,344
Franchise fees	5,651		463		1,362		7,476
Franchise rental income	—		—		58,721		58,721
Advertising funds revenue	79,170		5,585		—		84,755
Total revenues	$	374,895	$	17,264	$	60,083	$	452,242

Nine Months Ended September 27, 2020
Sales at Company-operated restaurants	$	522,961	$	—	$	—	$	522,961
Franchise royalty revenue	271,082		30,809		—		301,891
Franchise fees	16,244		1,369		2,141		19,754
Franchise rental income	—		—		173,434		173,434
Advertising funds revenue	226,907		14,561		—		241,468
Total revenues	$	1,037,194	$	46,739	$	175,575	$	1,259,508

Three Months Ended September 29, 2019
Sales at Company-operated restaurants	$	181,977	$	—	$	—	$	181,977
Franchise royalty revenue	90,791		11,476		—		102,267
Franchise fees	5,199		1,011		678		6,888
Franchise rental income	—		—		59,918		59,918
Advertising funds revenue	81,386		5,444		—		86,830
Total revenues	$	359,353	$	17,931	$	60,596	$	437,880


	Wendy’s U.S.		Wendy’s International		Global Real Estate & Development		Total
Nine Months Ended September 29, 2019
Sales at Company-operated restaurants	$	530,724	$	—	$	—	$	530,724
Franchise royalty revenue	266,599		33,332		—		299,931
Franchise fees	15,867		2,508		1,927		20,302
Franchise rental income	—		—		176,931		176,931
Advertising funds revenue	238,804		15,119		—		253,923
Total revenues	$	1,051,994	$	50,959	$	178,858	$	1,281,811

Contract Balances

The following table provides information about receivables and contract liabilities (deferred franchise fees) from contracts with customers:


	September 27, 2020 (a)		December 29, 2019 (a)
Receivables, which are included in “Accounts and notes receivable, net” (b)	$	44,637	$	39,188
Receivables, which are included in “Advertising funds restricted assets”	55,682		54,394
Deferred franchise fees (c)	98,045		100,689

_______________

(a)Excludes funds collected from the sale of gift cards, which are primarily reimbursed to franchisees upon redemption at franchised restaurants and do not ultimately result in the recognition of revenue in the Company’s condensed consolidated statements of operations.

(b)Includes receivables related to “Sales” and “Franchise royalty revenue and fees.”

(c)Deferred franchise fees are included in “Accrued expenses and other current liabilities” and “Deferred franchise fees” and totaled $9,211 and $88,834 as of September 27, 2020, respectively, and $8,899 and $91,790 as of December 29, 2019, respectively.

Significant changes in deferred franchise fees are as follows:


	Nine Months Ended
	September 27, 2020		September 29, 2019
Deferred franchise fees at beginning of period	$	100,689	$	102,205
Revenue recognized during the period	(6,286)		(6,635)
New deferrals due to cash received and other	3,642		5,181
Deferred franchise fees at end of period	$	98,045	$	100,751

Anticipated Future Recognition of Deferred Franchise Fees

The following table reflects the estimated franchise fees to be recognized in the future related to performance obligations that are unsatisfied at the end of the period:


Estimate for fiscal year:
2020 (a)	$	4,563
2021	6,231
2022	6,041
2023	5,871
2024	5,672
Thereafter	69,667
	$	98,045

_______________

(a)Represents franchise fees expected to be recognized for the remainder of 2020, which includes development-related franchise fees expected to be recognized over a duration of one year or less.