Wendy's International (WEN)

Arby’s Restaurants

Arby’s opened its first restaurant in Boardman, Ohio in 1964. As of December 31, 2006, ARG and Arby’s franchisees operated Arby’s restaurants in 48 states, the District of Columbia and four foreign countries. As of December 31, 2006, the six leading states by number of operating units were: Ohio, with 288 restaurants; Michigan, with 191 restaurants; Indiana, with 175 restaurants; Florida, with 175 restaurants; Texas, with 156 restaurants; and Georgia, with 153 restaurants. The country outside the United States with the most operating units is Canada with 118 restaurants as of December 31, 2006.

Arby’s restaurants in the United States and Canada typically range in size from 2,500 square feet to 3,000 square feet. At December 31, 2006, approximately 98% of freestanding system-wide restaurants (including approximately 99% of freestanding company-owned restaurants) featured drive-thru windows. Restaurants typically have a manager, at least one assistant manager and as many as 30 full and part-time employees. Staffing levels, which vary during the day, tend to be heaviest during the lunch hours.

The following table sets forth the number of Arby’s restaurants at the beginning and end of each year from 2004 to 2006:

During the period from December 29, 2003 through December 31, 2006, 326 new Arby’s restaurants were opened and 191 generally underperforming Arby’s restaurants were closed. We believe that closing underperforming Arby’s restaurants has contributed to an increase in the average annual unit sales volume of the Arby’s system, as well as to an improvement of the overall brand image of Arby’s.

As of December 31, 2006, ARG owned or operated 1,061 domestic Arby’s restaurants. Of these 1,061 restaurants, 1,021 were freestanding units, 24 were in shopping malls, 5 were in office buildings/urban in-line locations, 4 were in convenience stores, 4 were in travel plazas and 3 were in strip center locations.