XML 28 R19.htm IDEA: XBRL DOCUMENT v3.22.2
Leases
 6 Months Ended
Jul. 03, 2022
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 July 3, 2022, Wendy’s and its franchisees operated 7,040 Wendy’s restaurants. Of the 411 Company-operated Wendy’s restaurants, Wendy’s owned the land and building for 157 restaurants, owned the building and held long-term land leases for 143 restaurants and held leases covering the land and building for 111 restaurants. Wendy’s also owned 489 and leased 1,211 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 EndedSix Months Ended
July 3,
2022		July 4,
2021		July 3,
2022		July 4,
2021
Finance lease cost:
Amortization of finance lease assets$4,106 $3,251 $8,170 $6,759 
Interest on finance lease liabilities10,693 10,267 21,338 20,560 
14,799 13,518 29,508 27,319 
Operating lease cost22,324 23,012 42,985 46,373 
Variable lease cost (a)16,456 16,583 31,259 31,771 
Short-term lease cost1,405 1,270 2,838 2,596 
Total operating lease cost (b)40,185 40,865 77,082 80,740 
Total lease cost$54,984 $54,383 $106,590 $108,059 
_______________

(a)Includes expenses for executory costs of $9,245 and $10,087 for the three months ended July 3, 2022 and July 4, 2021, respectively, and $18,853 and $20,150 for the six months ended July 3, 2022 and July 4, 2021, respectively, for which the Company is reimbursed by sublessees.

(b)Includes $32,071 and $34,063 for the three months ended July 3, 2022 and July 4, 2021, respectively, and $60,996 and $66,615 for the six months ended July 3, 2022 and July 4, 2021, respectively, recorded to “Franchise rental expense” for leased properties that are subsequently leased to franchisees. Also includes $7,479 and $6,111 for the three months ended July 3, 2022 and July 4, 2021, respectively, and $14,773 and $12,792 for the six months ended July 3, 2022 and July 4, 2021, respectively, recorded to “Cost of sales” for leases for Company-operated restaurants.
Leases, Company as Lessor
Company as Lessor

The components of lease income are as follows:
Three Months EndedSix Months Ended
July 3,
2022		July 4,
2021		July 3,
2022		July 4,
2021
Sales-type and direct-financing leases:
Selling profit$1,677 $1,627 $2,157 $3,539 
Interest income (a)7,753 7,586 15,493 15,075 
Operating lease income42,174 44,356 85,488 88,478 
Variable lease income16,436 16,512 30,993 31,266 
Franchise rental income (b)$58,610 $60,868 $116,481 $119,744 
_______________

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

(b)Includes sublease income of $43,689 and $45,245 recognized during the three months ended July 3, 2022 and July 4, 2021, respectively, and $86,854 and $88,495 recognized during the six months ended July 3, 2022 and July 4, 2021, respectively. Sublease income includes lessees’ variable payments to the Company for executory costs of $9,250 and $10,195 for the three months ended July 3, 2022 and July 4, 2021, respectively, and $18,785 and $20,069 for the six months ended July 3, 2022 and July 4, 2021, respectively.