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Revenue (Notes)
 12 Months Ended
Jan. 01, 2023
Revenue [Abstract]  
Revenue Revenue
Nature of Goods and Services

The Company generates revenues from sales at Company-operated restaurants and earns royalties, fees and rental income from franchised restaurants. Revenues are recognized upon delivery of food to the customer at Company-operated restaurants or upon the fulfillment of terms outlined in the franchise agreement for franchised restaurants. The franchise agreement provides the franchisee the right to construct, own and operate a Wendy’s restaurant upon a site accepted by Wendy’s and to use the Wendy’s system in connection with the operation of the restaurant at that site. The franchise agreement generally provides for a 20-year term and a 10-year renewal subject to certain conditions. The initial term may be extended up to 25 years and the renewal extended up to 20 years for qualifying restaurants under certain new restaurant development and reimaging programs.

The franchise agreement requires that the franchisee pay a royalty based on a percentage of sales at the franchised restaurant, as well as make contributions to the Advertising Funds based on a percentage of sales. Wendy’s may offer development incentive programs from time to time that provide for a discount or lesser royalty amount or Advertising Fund contribution for a limited period of time. The agreement also typically requires that the franchisee pay Wendy’s a technical assistance fee. The technical assistance fee is used to defray some of the costs to Wendy’s for training, start-up and transitional services related to new and existing franchisees acquiring restaurants and in the development and opening of new restaurants. The franchise agreement also requires that the franchisee pay an annual fee for technology services. The technology fee is a flat fee dependent on each restaurant’s sales.

Wendy’s also enters into development agreements with certain franchisees. The development agreement generally provides the franchisee with the right to develop a specified number of new Wendy’s restaurants using the Image Activation design within a stated, non-exclusive territory for a specified period, subject to the franchisee meeting interim new restaurant development requirements.

Wendy’s owns and leases sites from third parties, which it leases and/or subleases to franchisees. Noncancelable lease terms are generally initially between 15 and 20 years and, in most cases, provide for rent escalations and renewal options. The initial lease term for properties leased or subleased to franchisees is generally set to be coterminous with the initial 20-year term of the related franchise agreement and any renewal term is coterminous with the 10-year renewal term of the related franchise agreement.

Royalties and contributions to the Advertising Funds are generally due within the month subsequent to which the revenue was generated through sales at the franchised restaurant. Technical assistance fees and renewal fees are generally due upon execution of the related franchise agreement. Annual technology fees are due in quarterly installments. Rental income is due in accordance with the terms of each lease, which is generally at the beginning of each month.
Disaggregation of Revenue

The following tables disaggregate revenue by segment and source for 2022, 2021 and 2020:
Wendy’s U.S.Wendy’s InternationalGlobal Real Estate & DevelopmentTotal
2022
Sales at Company-operated restaurants$882,684 $13,901 $— $896,585 
Franchise royalty revenue423,955 61,533 — 485,488 
Franchise fees63,112 5,542 4,093 72,747 
Franchise rental income— — 234,465 234,465 
Advertising funds revenue380,491 25,729 — 406,220 
Total revenues$1,750,242 $106,705 $238,558 $2,095,505 
2021
Sales at Company-operated restaurants$730,415 $3,659 $— $734,074 
Franchise royalty revenue407,317 53,392 — 460,709 
Franchise fees64,170 5,391 6,478 76,039 
Franchise rental income— — 236,655 236,655 
Advertising funds revenue365,594 23,927 — 389,521 
Total revenues$1,567,496 $86,369 $243,133 $1,896,998 
2020
Sales at Company-operated restaurants$722,764 $— $— $722,764 
Franchise royalty revenue373,162 43,346 — 416,508 
Franchise fees22,126 1,962 4,153 28,241 
Franchise rental income— — 232,648 232,648 
Advertising funds revenue313,330 20,334 — 333,664 
Total revenues$1,431,382 $65,642 $236,801 $1,733,825 

Contract Balances

The following table provides information about receivables and contract liabilities (deferred franchise fees) from contracts with customers:
Year End
January 1,
2023 (a)		January 2,
2022 (a)
Receivables, which are included in “Accounts and notes receivable, net” (b)
$54,497 $49,168 
Receivables, which are included in “Advertising funds restricted assets”
70,422 65,497 
Deferred franchise fees (c)99,208 97,186 
_______________

(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 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 $8,977 and $90,231, respectively, as of January 1, 2023, and $9,084 and $88,102, respectively, as of January 2, 2022.

Significant changes in deferred franchise fees are as follows:
Year Ended
202220212020
Deferred franchise fees at beginning of period$97,186 $97,785 $100,689 
Revenue recognized during the period
(11,567)(19,838)(8,955)
New deferrals due to cash received and other13,589 19,239 6,051 
Deferred franchise fees at end of period$99,208 $97,186 $97,785 

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:
2023$8,977 
20245,835 
20255,669 
20265,559 
20275,482 
Thereafter67,686 
$99,208