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Leases
 9 Months Ended
Oct. 03, 2021
Leases [Abstract]  
Leases, Company as Lessee Leases
Nature of Leases

The Company operates restaurants that are located on sites owned by us and sites leased by us from third parties. In addition, the Company owns sites and leases sites from third parties, which it leases and/or subleases to franchisees. At October 3, 2021, Wendy’s and its franchisees operated 6,891 Wendy’s restaurants. Of the 313 Company-operated Wendy’s restaurants, Wendy’s owned the land and building for 136 restaurants, owned the building and held long-term land leases for 117 restaurants and held leases covering the land and building for 60 restaurants. Wendy’s also owned 510 and leased 1,275 properties that were either leased or subleased principally to franchisees. The Company also leases restaurant, office and transportation equipment.

Company as Lessee

The components of lease cost are as follows:
Three Months EndedNine Months Ended
October 3,
2021		September 27,
2020		October 3,
2021		September 27,
2020
Finance lease cost:
Amortization of finance lease assets$3,543 $3,471 $10,302 $9,995 
Interest on finance lease liabilities10,371 10,244 30,931 30,462 
13,914 13,715 41,233 40,457 
Operating lease cost22,388 23,170 68,761 68,304 
Variable lease cost (a)16,635 15,548 48,406 43,766 
Short-term lease cost1,125 1,006 3,721 3,327 
Total operating lease cost (b)40,148 39,724 120,888 115,397 
Total lease cost$54,062 $53,439 $162,121 $155,854 
_______________

(a)Includes expenses for executory costs of $10,016 and $9,326 for the three months ended October 3, 2021 and September 27, 2020, respectively, and $30,166 and $28,526 for the nine months ended October 3, 2021 and September 27, 2020, respectively, for which the Company is reimbursed by sublessees.

(b)Includes $34,396 and $32,421 for the three months ended October 3, 2021 and September 27, 2020, respectively, and $101,011 and $92,975 for the nine months ended October 3, 2021 and September 27, 2020, respectively, recorded to “Franchise rental expense” for leased properties that are subsequently leased to franchisees. Also includes $5,213 and $6,651 for the three months ended October 3, 2021 and September 27, 2020, respectively, and $18,005 and $20,315 for the nine months ended October 3, 2021 and September 27, 2020, respectively, recorded to “Cost of sales” for leases for Company-operated restaurants.
The following table includes supplemental cash flow and non-cash information related to leases:
Nine Months Ended
October 3,
2021		September 27,
2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases$31,608 $28,689 
Operating cash flows from operating leases69,476 62,026 
Financing cash flows from finance leases9,021 5,850 
Right-of-use assets obtained in exchange for lease obligations:
Finance lease liabilities43,277 24,617 
Operating lease liabilities11,404 12,149 

The following table includes supplemental information related to leases:
October 3,
2021		January 3,
2021
Weighted-average remaining lease term (years):
Finance leases15.816.2
Operating leases14.214.6
Weighted average discount rate:
Finance leases9.19 %9.54 %
Operating leases5.01 %5.06 %
Supplemental balance sheet information:
Finance lease assets, gross$271,075 $261,308 
Accumulated amortization(60,415)(55,155)
Finance lease assets210,660 206,153 
Operating lease assets783,986 821,480 

The following table illustrates the Company’s future minimum rental payments for non-cancelable leases as of October 3, 2021:
Finance
Leases		Operating
Leases
Fiscal YearCompany-OperatedFranchise
and Other		Company-OperatedFranchise
and Other
2021 (a) (b)$1,398 $13,934 $3,504 $18,313 
20223,699 51,912 14,412 73,572 
20233,644 53,569 14,726 73,226 
20243,712 54,001 14,738 73,145 
20253,787 54,496 14,633 72,829 
Thereafter46,140 682,798 141,258 732,276 
Total minimum payments$62,380 $910,710 $203,271 $1,043,361 
Less interest
(22,694)(405,706)(58,455)(312,148)
Present value of minimum lease payments (c) (d)$39,686 $505,004 $144,816 $731,213 
_______________
(a)Represents future minimum rental payments for non-cancelable leases for the remainder of 2021.

(b)In addition to the 2021 future minimum rental payments, the Company expects to pay $1,038 primarily during 2021 related to rent deferrals obtained due to the COVID-19 pandemic. The related payable is included in “Accrued expenses and other current liabilities.”

(c)The present value of minimum finance lease payments of $15,915 and $528,775 are included in “Current portion of finance lease liabilities” and “Long-term finance lease liabilities,” respectively.

(d)The present value of minimum operating lease payments of $45,541 and $830,488 are included in “Current portion of operating lease liabilities” and “Long-term operating lease liabilities,” respectively.
Leases, Company as Lessor
Company as Lessor

The components of lease income are as follows:
Three Months EndedNine Months Ended
October 3,
2021		September 27,
2020		October 3,
2021		September 27,
2020
Sales-type and direct-financing leases:
Selling profit$705 $182 $4,244 $1,379 
Interest income (a)7,786 7,296 22,861 21,804 
Operating lease income45,834 43,510 134,312 130,514 
Variable lease income16,612 15,211 47,878 42,920 
Franchise rental income (b)$62,446 $58,721 $182,190 $173,434 
_______________

(a)Included in “Interest expense, net.”

(b)Includes sublease income of $46,102 and $43,122 for the three months ended October 3, 2021 and September 27, 2020, respectively, and $134,597 and $126,653 for the nine months ended October 3, 2021 and September 27, 2020, respectively. Sublease income includes lessees’ variable payments to the Company for executory costs of $10,087 and $9,379 for the three months ended October 3, 2021 and September 27, 2020, respectively, and $30,156 and $28,538 for the nine months ended October 3, 2021 and September 27, 2020, respectively.
The following table illustrates the Company’s future minimum rental receipts for non-cancelable leases and subleases as of October 3, 2021:
Sales-Type and
Direct Financing Leases		Operating
Leases
Fiscal YearSubleasesOwned PropertiesSubleasesOwned Properties
2021 (a) (b)$8,409 $1,407 $28,841 $13,942 
202234,188 2,610 116,068 56,305 
202335,247 2,656 116,795 56,614 
202437,248 2,667 116,962 57,720 
202536,149 2,784 116,443 58,323 
Thereafter479,695 32,057 1,172,444 748,781 
Total future minimum receipts630,936 44,181 $1,667,553 $991,685 
Unearned interest income(341,031)(21,892)
Net investment in sales-type and direct financing leases (c)$289,905 $22,289 
_______________

(a)Represents future minimum rental receipts for non-cancelable leases for the remainder of 2021.

(b)In addition to the 2021 future minimum rental receipts, the Company expects to collect $273 primarily during 2021 related to its offer to franchisees to defer base rent payments in response to the COVID-19 pandemic. The related receivable is included in “Accounts and notes receivable, net.”

(c)The present value of minimum sales-type and direct financing rental receipts of $6,952 and $305,242 are included in “Accounts and notes receivable, net” and “Net investment in sales-type and direct financing leases,” respectively. The present value of minimum sales-type and direct financing rental receipts includes a net investment in unguaranteed residual assets of $535.

Properties owned by the Company and leased to franchisees and other third parties under operating leases include:
October 3,
2021		January 3,
2021
Land$280,767 $279,956 
Buildings and improvements307,593 309,605 
Restaurant equipment1,701 1,701 
590,061 591,262 
Accumulated depreciation and amortization(179,439)(170,722)
$410,622 $420,540