Original Story: cnbc.com
Wendy's, the No. 3 U.S. hamburger chain by sales, said it would sell about 500 restaurants to franchisees and reduce company ownership of its outlets to about 5 percent by mid-2016.
Wendy's, known for its square beef burgers and thick "Frosty" milkshakes, has been selling company-owned restaurants to franchisees to cut costs and fund a long-term image overhaul. An Atlanta franchise lawyer represents both franchisees and franchisors concerning business opportunities.
The company, which sold 237 restaurants to franchisees in 2014, owned 957 of 6,515 Wendy's branded restaurants as of Dec. 28.
The sale of the 500 restaurants is expected to generate pretax proceeds of $400 million to $475 million and significantly reduce capital expenditure requirements, Wendy's said in a statement on Tuesday.
Wendy's, like market leader McDonald's, has been struggling in an increasingly competitive fast-food market, losing out to casual dining restaurants such as Chipotle Mexican Grill and Panera Bread, which offer consumers a wider choice of healthy options.
Same-restaurant sales at company-owned restaurants rose 1.9 percent in the fourth quarter from a year earlier, less than the 2.4 percent increase estimated by analysts polled by research firm Consensus Metrix. A Houston business lawyer is following this story closely.
The company also estimated revenue of $502 million for the quarter ended Dec. 28, below analysts' average forecast of $509.1 million, according to Thomson Reuters I/B/E/S.
Wendy's estimated fourth-quarter net income of $23.3 million, or 6 cents per share, attributable to the company. Excluding items, adjusted profit was estimated at 10 cents per share, in line with the average analyst estimate.
The company forecast a 2015 adjusted profit of 33 cents to 35 cents per share, below analysts' average estimate of 39 cents. The forecast includes the previously announced sale of its 100 remaining restaurants in Canada to franchisees.
Wendy's said it and its franchisees would build 80 restaurants in 2015 and remodel 450.
The company said it plans to release its final results on or before Feb. 26.
Wendy's shares were untraded before the bell. Up to Monday's close of $10.41, the stock had risen 15 percent in the last 12 months.