OVERVIEW

Wendy's International, Inc. began in 1969 as a small restaurant in Columbus, Ohio, specializing in "old-fashioned hamburgers." Led by its founder Dave Thomas, Wendy's has grown to be a massive corporation with 5,207 restaurants in the United States and 33 other countries. More than 5 million customers are served in Wendy's restaurants each day. In addition to its hamburgers, which have topped consumer taste surveys for 15 years, Wendy's also sells other food items such as fried chicken, salads, and the obligatory french fries. By 1998 Wendy's also owned 1,578 Tim Hortons doughnut shops.

COMPANY FINANCES
Wendy's retail sales continue to rise. Sales from Wendy's and Hortons restaurants were reported at $2.04 billion in 1997, an increase over 1996's __BODY__.9 billion. The first quarter of 1998 saw a small decrease in net income from $24.6 million to $23.8 million, due to the shutdown of company-operated stores and refranchisement of others.

HISTORY
Dave Thomas, founder of Wendy's, began working in restaurants at the age of 12 and dropped out of high school so that he could work full-time. In 1956 he and a partner opened a barbecue restaurant. While working there, Thomas met Colonel Harland Sanders, founder of Kentucky Fried Chicken, and soon afterward began managing several KFC restaurants in Ohio. Thomas was the person who gave KFC its original "bucket of chicken" logo. However, Thomas confesses that he always loved the taste of a great hamburger. In 1968 he sold the restaurants back to KFC. The following year he opened his first Wendy's Old Fashioned Restaurant in Columbus, Ohio, using the nickname of his eight-year-old daughter. When Wendy's celebrated its twenty-fifth anniversary in 1994, the original restaurant, still open, was converted into a Wendy's museum. Within five years of Wendy's first opening, the company's total sales were almost $25 million. After only seven years, Wendy's celebrated the opening of its one-hundredth restaurant, its first international restaurant (in Canada) and its first public stock trading. In 1995 Wendy's acquired the Canadian restaurant chain Tim Hortons. One year later, the sales of all company-owned and franchised Wendy's and Tim Hortons totaled $5.43 billion, an increase of $4 million over 1995. This also marked the tenth consecutive year that Wendy's company-owned restaurants within the United States had increased sales. Despite his incredible success at business, Dave Thomas considers receiving his GED certificate and diploma from a Florida high school, 45 years after he dropped out, to be one of his greatest accomplishments. Not surprisingly, Dave was voted "Most Likely to Succeed" by his graduating class. He and his wife Lorraine were also voted Prom King and Queen.

STRATEGY
As emphasized on its web site, Wendy's was founded on a motto of "Quality, Service, Cleanliness, and Value." The company aims to follow that motto in all of its restaurants. Its 1996 annual report expanded on this motto, listing several long-standing strategies: "exceeding customer expectations, fostering a performance-driven culture, delivering the balanced message of brand equity plus value in outstanding advertising, and creating a healthy restaurant system." To reach these goals, Wendy's has focused on providing a varied menu, selling a group of items at regular low prices rather than running special sales, frequently remodeling restaurants, and advertising effectively. The company maintains quality and uniformity by adhering to detailed specifications for food preparation and service, offering continual in-service training, and conducting field visits by company supervisors. Company personnel review all potential franchisees and then make recommendations, thereby assuring that the franchisees comply with company specs. The company also engages in an active expansion program, both in the United States and internationally. In 1997 Wendy's opened 584 new restaurants, and it planned to open an additional 575 by the end of 1998 (375 Wendy's and 200 Tim Hortons). Expansion was expected to accelerate in 1999, with 675 new restaurants anticipated. In addition to traditional restaurant settings, Wendy's has also been expanding into shopping malls and university campuses. In 1996, 1,315 Wendy's restaurants were company-owned and another 3,618 were franchised. New promotions are always in the works to make the Wendy's name more visible. The PBS program Adventures from the Book of Virtues was part of a promotion to attract family business. A two-year sponsorship deal with the National Hockey League (NHL) for the 19971998 and 1998-1999 seasons included NHLthemed spots featuring Dave Thomas.

INFLUENCES
Throughout its history Wendy's has been an innovator in marketing food products. In 1979 its menu diversification program began with the addition of a self-service salad bar. Four years later, Wendy's was the first national restaurant chain to sell baked potatoes at all of its restaurants. A grilled chicken sandwich, introduced in 1990, marked the beginning of lighter main courses for its health- and weight-conscious customers. A hallmark of Wendy's operations has been its creative television advertising campaigns. While still a small chain in the early 1970s, Wendy's began to invite television viewers to

"C'mon to Wendy's." In 1977 Wendy's aired its first nationally televised commercial, which featured the "Hot 'n Juicy" Wendy's hamburger. This simple ad, along with its successor, in which customers and employees sang, "Wendy's Has the Taste," boosted Wendy's popularity to that of its well-known, larger competitors. But these ads were just small fries compared to the series of ads introduced in the 1980s. In 1983 Wendy's introduced its "Burger Wars" ads, showing customers at other fast-food restaurants waiting endlessly for "frozen stiff" burgers. But unquestionably Wendy's presented its most famous ad the following year. The "Where's the Beef?" ads featured a feisty older woman named Clara Peller who was unsatisfied with the microscopic hamburger she had purchased from a competitor. The series won three of the advertising industry's Clio awards and was voted the most popular commercial of the year. Wendy's then followed with the "Parts is Parts" ads, another award winner, in which an employee of a rival restaurant could not identify what parts of a chicken he had served the customer and the "Russian Fashion Show" ads, which capitalized on the Reagan presidency's view of the Soviet Union as the "evil empire." In the late 1980s and the 1990s Wendy's switched advertising approaches and began featuring its personable, folksy, founder Dave Thomas in its televised commercials. Celebrities such as soap star Susan Lucci often joined Thomas, who has been portrayed as an old-fashioned, trustworthy fellow. Presumably Wendy's will launch more of its memorable television ad campaigns in the coming years.

CURRENT TRENDS
Wendy's continues to focus on providing quality products in clean, updated surroundings. Its expansion plans rely heavily on franchised restaurants, but these restaurants continue to be closely observed to assure that they meet Wendy's standards and image. In 1995 Wendy's acquired the Canadian chain Tim Hortons, and hoped to expand its operations into the United States. However, this chain, which sells doughnuts and other baked goods, did not have name recognition in the United States and faces such successful, established competitors as Dunkin' Donuts.

PRODUCTS

The Wendy's menu includes hamburgers, chicken, french fries, and soft drinks as well as salads, baked potatoes, chili, pita sandwiches, and frozen dessert. Tim Hortons offers coffee, cappuccino, fresh baked goods, and a limited sandwich and soup selection. Because Wendy's hopes to establish its Canadian Tim Hortons chain in the United States, it is likely that more baked goods will appear on the Wendy's menu as well. Although its major competitors were engaged in a price war in 1997, Wendy's did not change its pricing strategy. It continues to offer its popular Super Value Menu, which features several items priced at __BODY__.99. National advertising was expanded for the Super Value Menu and Spicy Chicken Sandwich. In 1996 Wendy's sold its first meal online. According to the company's web site, the hungry surfer ordered a Big Bacon Classic Hamburger, Biggie Fry, Biggie Coke, and a Frosty.

FAST FACTS: About Wendy's International, Inc.

Ownership: Wendy's International, Inc. is a publicly owned company traded on the New York Stock Exchange. Ticker symbol: WEN Officers: R. David Thomas, Sr. Chmn. & Founder, Director, 65, __BODY__,439,746.; Gordon F. Teter, Pres. & CEO, 54, 1,928,558.; Frederick R. Reed, CFO, 49, $690,052 Employees: 47,000 Principal Subsidiary Companies: Wendy's subsidiaries include: Wendy's Restaurants of Canada, Inc.; Wendy's Ltd. (UK); Wendy's Capital Corporation; and Progressive Rent-a-Car, Inc. Chief Competitors: Wendy's product is fast food, and so, its main competitors include: Burger King; Hard-ees; McDonald's; Rally's; and Taco Bell.

CHRONOLOGY: Key Dates for Wendy's International, Inc.

1956: Dave Thomas and a partner open a barbeque restaurant 1969:

Thomas opens the first Wendy's Old Fashioned Restaurant 1972: The first Wendy's franchise opens in Indianapolis, Indiana 1976: Wendy's goes public 1983: Adds the baked potato to the menu, the first national chain to offer baked potatoes nationwide 1990: Dave Thomas, at President George Bush's request, becomes the spokesperson for "Adoption Works . . . For Everyone" 1995: Wendy's merges with Tim Horton's restaurants 1997: The five thousandth Wendy's restaurant opens

CORPORATE CITIZENSHIP
Wendy's founder Dave Thomas was adopted at the age of six weeks, and over the years he has become a well-known advocate for adoption. President Bush designated Thomas as national spokesperson for adoption in 1990. Two years later Thomas founded the Dave Thomas Foundation for Adoption. He has donated all profits from his autobiography, Dave's Way, and a second book, Well Done, to the foundation. Wendy's also supports several children's hospitals and research institutes.

GLOBAL PRESENCE
Canada is the company's largest market outside of the United States. Restaurant sales increased 7.7 percent in 1997, a large improvement over the 1.4 percent increase experienced in 1996. In addition to nearly 3,400 Canadian Tim Hortons quick-service restaurants, the company also owned or franchised 245 Wendy's restaurants in 1997. The company had planned to open 25 Wendy's restaurants in Canada by the end of 1998. Wendy's also operates 387 restaurants in 33 other countries, 86 of which opened in 1997. Future plans call for expansion in Asia and the Pacific Rim, Latin America, Europe, and the

Middle East. Development rights have been granted in Egypt, Morocco, and the People's Republic of China, to name a few. In 1998 the company announced plans to bolster Wendy's Latin American presence, with 24 franchises planned for Columbia over the next three years. Argentina and Venezuela were other Latin American strongholds in the 1990s.