With its franchisees contending with a 20% sales plunge since COVID-19 began spreading rapidly across the U.S., Wendy's (NASDAQ:WEN) is extending the time available for restaurant operators to pay their fees and rent to the company. It currently intends to offer the extensions during the next three months in an effort to give franchisees some breathing room while the pandemic disrupts the economy.
Royalties and marketing funds, today's announcement said, will have their payment terms extended by 45 days during the three-month COVID-19 response period. Those franchisees who are leasing restaurant space owned directly by Wendy's will have rental payments deferred by 50% over the same interval. The company is currently negotiating on behalf of its franchisees to get extra support from regular franchise lenders.
According to CEO Todd Penegor, the measures are part of the company's commitment to "supporting our franchise partners as we navigate through this very challenging and historic time together."
At the same time it initiated these steps, Wendy's announced it's withdrawing several items of guidance, not just the most recent. These include the 2020 fiscal-year guidance it issued in January at the same time as its earnings conference call, and the October 2019 Investor Day long-term outlook for 2021 through 2024. It will provide an updated outlook once it has enough data on the coronavirus' effects to make reasonable estimates. An update on general financial results will be provided during its Q1 2020 earnings call, but will likely not offer any new guidance information.