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 Wendy's/Arby's Group, Inc (NYSE: WEN) is a holding company for two major fast food chains, Arby's and Wendy's. The company's principal subsidiaries, Arby's Restaurant Group, Inc. (ARG) and Wendy's International, are the franchisors of Arby's and Wendy's restaurants, respectively. As of June 2008, the combined company has over 10,000 restaurants in both chains. There were a total of 3,719 Arby's restaurants in the system, including 1,169 Company-owned and 2,550 franchised locations. There were 6,625 Wendy's restaurants in operation in the United States and in 21 other countries and territories. Of these restaurants, 1,402 were operated by Wendy's and 5,223 by Wendy's franchisees.[3]The company is also a franchisor of T.J. Cinnamons and the Pasta Connection and owns 243 T.J. Cinnamons outlets and 6 Pasta Connection outlets.
[edit] History[edit] DWG YearsWendy's/Arby's Group traces its history back to several predecessors, the oldest of which (Deisel-Wemmer Co., a cigar manufacturer and importer based in Ohio) was founded in 1884. By January 23, 1929, Deisel-Wemmer incorporated as Deisel-Wemmer-Gilbert Corporation (DWG) when acquired by an investment group. DWG was a small outfit and just to keep up market share purchased other small cigar companies like Odin cigars in 1930 and the Bernard Schwartz Cigar Corporation in 1939. The Company on May 15, 1946, changed its name to a simple name, DWG Cigar Corporation. Another series of acquisitions started in 1948 with the Nathan Elson Company following with A. Sensenbrenner & Sons in 1955 and in 1956 Chicago Motor Club Cigar and Reading, Pennsylvania-based Yocum Brothers. With the weakening of the cigar market due to medical advisories, many smokers switched to cigarettes, which were then believed to be safer. DWG then streamlined cigar operations and began looking for other businesses that might suit DWG's wholesale and distribution strength. The New York Stock Exchange dislisted DWG in 1965 after an attempt at purchasing Allegheny Pepsi bottling company failed. DWG, thus free from NYSE reporting requirements, sold their remaining cigar operations or closed them in 1966. Renamed as DWG Corporation, DWG used its cash from the cigar operation sale to purchase a 12% share of the National Propane Corporation. Security Management Company, headed by Victor Posner, a major investor in DWG saw potential with the company as it was bold to sell its main operation. Posner saw it as a good takeover vehicle and became the controlling interest of DWG.[2]
Posner usually placed himself as chairman of the board and president of each company that his Security Management Company subsidiaries, DWG or NVF, a vulcanized fiber manufacturer that controls the other half of Posner's companies. So while collecting reasonable compensation at each company, Posner's overall compensation surpassed major corporation executive pay like General Motors. NVF controlled Sharon Steel Corporation, one of the country's largest specialty steel manufacturers, which led to legal trouble. Posner sat on Sharon Steel's pension trustee board and directed the pension board to invest in Posner-owned properties. In 1971 the SEC sued, after which Posner then agreed not to sit on any pension board for any of his companies. Posner basically let those companies that could get by with minimum maintenance and nothing more do just that. With the run of acquisitions from 1982 and 1985, DWG faced heavy debt. Posner approached one of his backers, Carl Lindner, Jr., for assistance. Instead in 1986, Lindner's American Financial Corporation had acquired warrants for more than 30 percent of DWG's shares. Linder backed down from exercising the warrants but forced Posner to reduce his pay from DWG. Posner also started selling off DWG assets: Foxcroft and Enro shirt groups and the citrus operation. A deal for Royal Crown fell through.[2] An investor that Posner contacted to help get Sharon Steel out of Bankruptcy, indicated that his lawyer, Andrew Heine, might want to buy Fischbach Corp. Just short of Fischbach being sold, Heine's Granada Investments Company made a bid for all of DWG at $22 per share. Posner converted all DWG options into voting shares but was unable to vote them due to an Ohio judge's order. Granada sued Posner for not taking the bid serious and Posner sued back stating the bid had no merit. Posner lost the case in 1991 and was force to pay $5.5 million to Granada. Further more, the judge noting other investigations in illegal stock trading in the Fischbach acquision and of Posner's compensation added three court-appointed directors to DWG's board as audit, compensation, and intercorporate transactions committees.[2] Posner stopped the appointed directors from presenting their report to the full board forcing Judge Lambros to convert 50% of Security Management Company ownership in DWG to preferred shares and to sell the remaining common stock. Posner resigned as chair of DWG in 1992 and sold his shares to Trian Group, a New York-based investment partnership led by Nelson Peltz and Peter May. Shareholders agreed to drop their longstanding lawsuits claiming that DWG was raided and stripped.[2] [edit] TriarcDWG's name was changed to Triarc Companies, Inc. in 1993. Peltz served as CEO of the company from 1993 through 2007, during which time the company sold several holdings in order to focus on food and beverage operations after initially deciding on focusing on soft drinks, fast food, textiles, and liquefied petroleum gas.[2] Triarc in August 1995 purchased Mistic Brands, Inc. from Joseph Victori Wines, Inc. for $97 million, adding to its beverage holdings of Royal Crown Cola, and turned Mistic Brands around with the addition of new products. Triarc sold off its textiles by 1997.[2] In 1997, Triarc acquired Snapple Beverages from Quaker Oats, which had bought the company from leveraged buyout firm Thomas H. Lee Partners in 1994 for $1.7 billion. Quaker discontinued the Wendy Kaufman advertisements and sold Snapple to Triarc for $300 million in 1994. Triarc reintroduced Wendy the Snapple Lady (Wendy Kaufman), who had been terminated by Quaker Oats.[4] Cable Car Beverage Corporation, maker of Stewart's Root Beer and other flavors, was purchased by Triarc in November 1997.[5] National Propane Corporation was sold in 1999.[2] Snapple, Mistic, and Stewart's (formerly Cable Car Beverage) was sold by the company to Cadbury Schweppes in 2000 for $1.45 billion[4] In October of that same year, Cadbury Schweppes purchased Royal Crown from Triarc.[6] [edit] Wendy's/Arby'sOn April 24, 2008, Triarc announced the acquisition of Wendy's, the international fast food company. The transaction was part of the company's strategy to transition from a holding company for varied businesses into a true food and beverage company.[7] Under the terms of the deal announced, the stock swap will go for $2.3 billion.[8] The purchase was finalized on September 15, 2008, when shareholders of both Triarc and Wendy's agreed to the terms. As part of the terms, the name was changed to Wendy's/Arby's Group, Inc.[3] The two chains are not expected to cobrand with each other.[9] It is also unknown at this time if the two chains will keep their separate beverage contracts or sign one for both chains. Wendy's currently has Coca-Cola, while Arby's switched to Pepsi products at the majority of their stores in 2006. [edit] References
[edit] External links
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