Wendy's International (WEN)

(23) Variable Interest Entities

AFA Service Corporation

       As discussed in Note 1, the Company consolidates AFA, in which the Company has a significant variable interest as a result of a management services agreement (the “AFA Agreement”) the Company entered into with AFA effective October 3, 2005. AFA is a cooperative that represents operators of domestic Arby's restaurants and is responsible for marketing and advertising the Arby's brand. Membership in AFA is compulsory for all domestic Arby's operators, who pay a percentage of their monthly gross sales to AFA for such services. The Company does not have any assets that collateralize AFA's obligations. Under the AFA Agreement, however, the Company is responsible for the excess, if any, of expenses over the higher of the actual or budgeted related fee revenue from the operators, although creditors and members of AFA have no recourse to the general credit of the Company.

       The effect of the consolidation of AFA was an increase to each of consolidated assets and liabilities of $5,587,000 in the accompanying consolidated balance sheet as of January 1, 2006. In accordance with accounting principles generally accepted in the United States, the contributions to and expenses of AFA are both reported in, and accordingly offset in, “Advertising and selling” in the accompanying consolidated

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Triarc Companies, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
January 1, 2006

statement of operations for the year ended January 1, 2006 since the Company is acting in the capacity of an agent with regard to these contributions and expenses.

Collateralized Debt Obligations

       The Company has variable interests in each of the CDOs it manages due to the provision of the underlying management agreements and the ownership of preferred shares in certain of the CDOs (see Note 5). The preferred shares of CDOs represent less than 5% of each of the CDOs' total debt and equity as of January 1, 2006. In addition, the Company has determined that it does not have the majority of expected losses or gains of the respective CDOs. The Company may be considered to have significant variable interests in the CDOs in which the Company manages and owns an equity interest in the CDOs, but is not the primary beneficiary. The Company's maximum loss exposure relating to these variable interests is comprised of its investment balance of $20,993,000 (see Note 5), partially offset by the non-recourse notes payable to financial institutions of $8,036,000 (see Note 10) financing these investments, and the potential loss of future management fees.