Wendy’s Won’t Tell You What a Franchise Earns. Its Own 10-K Just Did.
Sourced from Wendy’s Form 10-K for the fiscal year ended 28 December 2025, the 2025 Franchise Disclosure Document, and two Wendy’s ethics codes. Published 13 July 2026.
Ask Wendy’s how much money one of its franchises makes, and you will get a real, detailed, audited answer.
It just won’t be about a franchise.
Item 19 of Wendy’s Franchise Disclosure Document runs a full restaurant P&L — cost of sales, operating expenses, EBITDA, the lot. It is more generous than most of its competitors bother to be. But every restaurant in that table is one Wendy’s owns itself. Company restaurants. Restaurants that pay no royalty and no advertising fee.
Wendy’s does not disclose what a franchisee earns. And its own Code of Business Conduct and Ethics forbids employees from filling that gap for you — in absolute terms, in a sentence repeated across two separate ethics documents. That rule is good law. It exists to protect you, and we’ll explain why.
But it leaves you underwriting a $1.5M–$3.0M investment on a number that describes somebody else’s business.
Then, in February 2026, Wendy’s filed its annual report — and told its shareholders exactly what it won’t tell its franchise prospects.
- Wendy’s staff are barred from giving you any earnings estimate outside Item 19. The Code of Ethics says so twice: “Do not ever make an estimate of potential profits or sales for a new restaurant to any franchisee that is not set forth in Item 19 of the FDD.” CODE
- Item 19 measures company restaurants, not franchises. It discloses 18.2% Restaurant EBITDA before Rent across 362 company-owned stores FDD Item 19. Those stores pay 0% royalty. You’d pay 4–6% royalty plus 2–4% advertising out of that same margin.
- The FY2025 10-K shows the two groups are diverging. U.S. franchised same-restaurant sales: −5.8%. U.S. company-operated: −2.5% 10-K. A gap of 3.3 percentage points — and in 2024, franchisees had outperformed.
- The obvious innocent explanation doesn’t hold. Wendy’s wasn’t offloading weak stores onto franchisees — it acquired 35 restaurants from them in 2025 and sold only 5 10-K. And 106 of the 111 closures were franchised, which should have flattered the franchised comp, not hurt it.
- Wendy’s is already bailing franchisees out, and says so under SEC liability. Franchise support costs rose 19.6% to $81.0M while royalty revenue fell $23.9M 10-K.
- Receivables are ballooning as sales shrink — $99.9M → $117.3M, up 17.4%, in a year revenue fell 3.1% 10-K.
- “Restaurant count increased by 157” is a global number. International comps were positive (+1.3%); the U.S. fell 5.6% 10-K. The growth headline is masking a domestic contraction.
- There is a lawful way around the gag rule. It’s in Item 20, and almost nobody uses it. See the last section.
1. The rule, in Wendy’s own words
From The Wendy’s Company Code of Business Conduct and Ethics, under the heading “Franchisee Relations”:
— The Wendy’s Company Code of Business Conduct and Ethics, “Franchisee Relations”
The same instruction appears, in near-identical language, in Wendy’s separate Code of Ethics for Customers, Franchisees and Suppliers. Two documents. Same sentence. “Do not ever.”
And that second document goes further. It includes a worked scenario — and the scenario is precisely the question a serious franchise buyer would ask:
A: “No. Even if the request seems reasonable, internal performance data is considered restricted and should not be shared outside the Company without the proper review and approval. Sharing it, even with the best intentions, could violate our Data Classification and Handling Standard, Franchise Disclosure Requirements or even securities law.”
— Wendy’s Code of Ethics for Customers, Franchisees and Suppliers, “Doing the Right Thing for Our Customers, Franchisees & Suppliers”
Read that again. An existing franchisee — someone who has already signed, already built, already paid — asks how their restaurant compares to others in the system. The prescribed answer is no.
2. Why the rule exists — and why it’s right
Here is where most coverage of a finding like this would reach for outrage. We’re not going to, because the rule is correct.
The rule forces every earnings claim into a single document, in writing, backed by substantiation the franchisor must produce on request, and exposes the franchisor to liability if it’s wrong. Wendy’s instructing its employees not to freelance earnings estimates is exactly what a well-governed franchisor should do. A company whose staff would give you an off-the-cuff profit number is a company you should run from.
So this article is not an accusation of bad faith. It’s an observation about a structural consequence — one that is entirely lawful, entirely predictable, and almost never explained to the people it affects.
The consequence is this: the rule guarantees that the only earnings number you receive is Item 19’s. And Item 19 doesn’t measure you.
3. The only number you’re allowed to have
Item 19 of the 2025 Wendy’s FDD is unusually generous by QSR standards — Wendy’s discloses a full restaurant P&L, which most franchisors won’t. Here it is:
| Line | Average | % of revenue | Median | Range |
|---|---|---|---|---|
| Gross Sales | $2,339,436 | 100% | 100% | $1.24M–$4.82M |
| Cost of Sales | $760,449 | 32.5% | 31.1% | 27.8%–34.3% |
| Other Operating Expenses | $1,152,992 | 49.3% | 47.8% | 34.6%–67.4% |
| Restaurant EBITDA before Rent | $425,995 | 18.2% | 16.3% | −4.1% – 32.9% |
| Royalty paid by these restaurants | $0 — company restaurants pay no royalty and no advertising contribution | |||
That last row is the whole problem.
Wendy’s does not disclose franchisee profitability. It discloses the profitability of restaurants it owns — which do not pay the 4–6% royalty or the 2.0–4.0% advertising contribution that a franchisee pays. (For the full royalty tier structure, see our primary-source breakdown of the 2025 FDD.)
Wendy’s is not hiding this. Item 19 itself notes what a franchisee would additionally owe at the 4% tier: $93,577 in royalty. Add roughly 4% advertising and you’re at ~8% of gross sales, coming straight out of that 18.2%.
4. The gap the 10-K just revealed
Until February 2026, the argument above was theoretical. You could reasonably say: fine, franchisees pay a royalty, but they’re running the same restaurants in the same markets — the underlying business must perform about the same.
Then Wendy’s filed its Form 10-K for fiscal 2025, and buried in the Key Business Measures table is this:
| Segment | 2025 | 2024 | 2023 |
|---|---|---|---|
| Company-operated | (2.5)% | 0.0% | 2.6% |
| Franchised | (5.8)% | 1.5% | 3.8% |
| Systemwide | (5.6)% | 1.4% | 3.7% |
Look at 2024 as well. Franchised units outperformed company units that year (+1.5% vs 0.0%), and outperformed again in 2023 (+3.8% vs +2.6%). The divergence isn’t a permanent structural feature of the system. It opened in 2025, and it opened violently.
Before you conclude anything: the honest alternative explanations
A 3.3-point gap does not automatically mean “franchising a Wendy’s is worse than owning one.” There are mundane explanations, and intellectual honesty requires putting them on the table before drawing conclusions. We checked each against the filing.
The 10-K says the opposite happened. In 2025 Wendy’s completed 35 restaurant acquisitions (buying from franchisees) against just 5 dispositions, and only 1 Franchise Flip — down from 50 in 2024 and 99 in 2023. The flow ran franchise → company, not company → franchise. If anything, absorbing franchised restaurants should have pulled the company number down, not propped it up. This explanation does not survive the filing.
This one we cannot rule out — the 10-K does not disclose same-restaurant sales by market for each ownership type, and neither does the FDD. It is a genuine possibility and a genuine limit on what anyone can conclude from these two numbers. It is also a question you can put directly to Wendy’s, and the answer would be informative either way.
No — and this cuts the other way. Of the 111 restaurants Wendy’s closed in 2025, 106 were franchisee-operated and only 5 were company-operated. Wendy’s also opened 253 franchised restaurants against just 15 company ones. The franchised pool absorbed nearly all the closures and nearly all the dilution from new openings — and still, the franchised comp came in 3.3 points worse.
And about that “restaurant count increased” headline
If you open the 10-K, one of the first things you’ll see is: “Systemwide restaurant count increased by 157 net new restaurants in 2025.” That sounds like growth, and it sits oddly beside everything above. Both are true, and the reconciliation matters:
| Metric (FY2025) | Figure |
|---|---|
| Restaurants opened | 268 (15 company / 253 franchised) |
| Restaurants closed | 111 (5 company / 106 franchised) |
| Net systemwide change | +157 → 7,397 total |
| International same-restaurant sales | +1.3% |
| U.S. same-restaurant sales | −5.6% |
The growth is international. The decline is American. Wendy’s International posted positive same-restaurant sales (+1.3%) while the U.S. fell 5.6%. The headline count is a global number, and it is masking a domestic contraction — one that Wendy’s has separately guided will deepen, with an expected 5–6% of U.S. restaurants closing under Project Fresh 10-K.
If you’re buying a franchise in Ohio, the number that describes your world is −5.8%, not +157.
See it yourself
We’ve recorded a four-minute walkthrough of the 10-K page containing this table, so you can find it in the document rather than taking our word for it:
The filing is free. Search EDGAR for CIK 0000030697 and open the 10-K for fiscal year ended 28 December 2025.
5. Two numbers that don’t lie
Same-restaurant sales can be argued about. Balance sheets are harder to spin.
| Line item | FY2025 | FY2024 | Change |
|---|---|---|---|
| Total revenues | $2,176.9M | $2,246.5M | −3.1% |
| Franchise royalty revenue | $504.5M | $528.4M | −$23.9M |
| Accounts & notes receivable, net | $117.3M | $99.9M | +17.4% |
| Franchise support & other costs | $81.0M | $67.7M | +19.6% |
Receivables rose 17.4% in a year when revenue fell 3.1%. Wendy’s own accounting note says receivables “consist primarily of royalties, rents, property taxes and franchise fees due principally from franchisees.” When the money owed to you by your franchisees grows sharply while the money they’re generating shrinks, there is usually one explanation: they are paying more slowly.
And franchise support costs rose 19.6% — $13.3 million of additional spend — in the same year royalty revenue fell $23.9 million. Wendy’s spent materially more supporting franchisees while collecting materially less from them.
6. Wendy’s admits it’s propping franchisees up
This isn’t inference. It’s in the risk factors, in the past tense, under SEC liability:
— The Wendy’s Company, Form 10-K for fiscal year ended 28 December 2025, Item 1A Risk Factors
Note the tense. Not “could.” Have. Wendy’s is telling its shareholders that it is already waiving royalties, deferring rent, and advancing cash to franchisees who can’t pay — and that the cost of doing so is already material.
The same risk factor names the endgame it’s trying to avoid: “franchisee bankruptcies or insolvency leading to restructuring activities.”
That is not a hypothetical either. Meritage Hospitality Group, the largest public Wendy’s franchisee at roughly 365–379 restaurants, reported a fiscal 2025 net loss of $(26.3) million, breached its debt covenants, entered forbearance, and filed its audited financials on a going-concern basis. It is the single most sophisticated, best-capitalized Wendy’s operator with public books — and it is the one franchisee whose numbers the gag rule cannot suppress, because securities law compels their disclosure.
7. The delivery fee nobody modelled
One more thing the 10-K changes.
The 2025 FDD discloses an In-App Delivery Account Settlement fee of 3.0% of every in-app delivery transaction FDD Item 6 — charged on top of royalty and advertising on that same sale, and ahead of whatever the third-party aggregator takes.
When we first flagged that fee, it was a line item. The 10-K tells you how fast the base it applies to is growing:
A per-transaction fee is only as expensive as the transactions it touches. That base grew roughly 18% year over year. Every point of digital mix growth makes the 3.0% fee more expensive in absolute terms — and it lands on the one part of the business that is actually growing.
8. The lawful workaround
Here’s the part that makes all of the above actionable rather than merely discouraging.
The gag rule binds Wendy’s employees. It does not bind Wendy’s franchisees.
Wendy’s own Code makes the distinction explicit: “Remember that our franchisees are independent businesspersons. They are not our ‘partners’ in the legal sense. They are not our employees.” Independent business owners can tell you whatever they want about their own restaurants.
And the FDD hands you their phone numbers. Item 20 contains a list of current and former franchisees, with contact information. That list is in the document by federal mandate, and it exists for exactly one reason: so that prospects can bypass the franchisor and ask the operators directly.
- “What was your four-wall EBITDA per restaurant in 2025, after royalty and advertising?”
- “Have you received any royalty, rent, or advertising relief from Wendy’s in the last 18 months?”
- “What royalty tier are you on — 4%, 5%, or 6% — and what determined it?”
- “What has the 3% in-app delivery fee cost you as digital mix has grown?”
- “If you could go back, would you sign again?”
And ask the same questions of former franchisees on that list. They are the ones with nothing to protect.
Two more sources the gag rule cannot reach:
- Meritage Hospitality Group’s public filings (OTCQX: MHGU) — the only audited window into a large Wendy’s franchisee’s P&L that exists.
- Wendy’s own SEC filings — free on EDGAR under CIK 0000030697. Everything in this article came from there and from the FDD, which state registries publish at no charge (California DFPI, Minnesota CARDS).
And request Item 19 substantiation in writing. Wendy’s is obligated to provide the basis for its financial performance representation on reasonable request. That obligation is the other half of the FTC rule — the half almost nobody exercises.
The bottom line
Wendy’s is not lying to you. Its Item 19 disclosure is more detailed than most of its competitors’, its ethics code is stricter than the law strictly requires, and its 10-K discloses franchisee distress with unusual candour.
But the system is built so that the most favourable number reaches you effortlessly, and the least favourable one you have to go and find. Item 19’s 18.2% will be handed to you. The −5.8% is in a 131-page SEC filing nobody will mention. The receivables line is on page 74. The bailout language is in a risk factor.
None of that is concealment. All of it is friction — and friction, applied asymmetrically, does the same work as concealment on anyone who doesn’t push through it.
Push through it.
Frequently asked questions
Can a Wendy’s employee tell me how much profit a franchise makes?
No. The Code of Business Conduct and Ethics states: “Do not ever make an estimate of potential profits or sales for a new restaurant to any franchisee that is not set forth in Item 19 of the FDD.” This reflects the FTC Franchise Rule and is lawful and appropriate — but it means Item 19 is the only earnings figure you can receive.
Does Item 19 show what a franchisee earns?
No. Item 19’s headline margin — 18.2% Restaurant EBITDA before Rent — covers 362 company-owned restaurants, which pay no royalty and no advertising contribution. A franchisee pays 4–6% royalty plus 2.0–4.0% advertising out of that same margin.
Are Wendy’s franchisees doing worse than company restaurants?
Yes, in fiscal 2025. The 10-K reports U.S. franchised same-restaurant sales at −5.8% against company-operated at −2.5% — a 3.3-point gap. Note that franchisees outperformed in 2023 and 2024; the divergence opened in 2025. Refranchising does not explain it: Wendy’s acquired 35 restaurants from franchisees that year and sold only 5.
Is Wendy’s giving relief to struggling franchisees?
Yes, by its own disclosure. The 10-K states Wendy’s has provided “royalty, advertising, rent or other relief… deferrals, waivers, setoffs… loans or guarantees and/or advancing cash payments,” and that this has adversely affected its results “which may be material.” Franchise support costs rose 19.6% to $81.0M.
How do I find out what a Wendy’s franchise really earns?
Item 20 of the FDD lists current and former franchisees with contact details. Franchisees are independent business owners and are not bound by Wendy’s employee ethics code. Calling them is the intended, lawful route. Also read Meritage Hospitality Group’s public filings and request Item 19 substantiation in writing.
Sources. The Wendy’s Company, Form 10-K for the fiscal year ended 28 December 2025 (Key business measures; consolidated balance sheets; Item 1A Risk Factors). 2025 Franchise Disclosure Document, Quality Is Our Recipe, LLC, filed 28 March 2025 (Items 6, 19, 20). The Wendy’s Company Code of Business Conduct and Ethics (“Franchisee Relations”). Wendy’s Code of Ethics for Customers, Franchisees and Suppliers. Meritage Hospitality Group (OTCQX: MHGU) FY2025 results release. Figures marked “OUR MATH” are BuyWendys calculations from stated assumptions.
Important disclosures. BuyWendys.com is an independent publication, not affiliated with, endorsed by, or sponsored by The Wendy’s Company or Quality Is Our Recipe, LLC, and is not a franchise broker, seller, or referral service. This article is journalism and analysis — not financial, legal, tax, or investment advice, and not an offer to sell or solicitation to buy a franchise. Nothing here alleges wrongdoing by The Wendy’s Company; the disclosure restrictions described are lawful and, in our view, appropriate. Franchise offerings are made solely by Franchise Disclosure Document. Any earnings figure here is either a franchisor disclosure, an audited SEC filing, or our own arithmetic from stated assumptions — none is a projection of what any individual restaurant will earn. Consult a qualified franchise attorney and an accountant before signing anything.