Core Thesis - The Wendy's Company (WEN) is viewed positively due to its resilient business model, which is franchise-heavy and generates high owner earnings, benefiting from digital engagement and international expansion [1][4][5] Business Model - Wendy's operates approximately 7,166 restaurants in FY24, with around 84% being franchised, allowing the company to earn primarily through fees, royalties, and rent rather than direct food sales [2][4] - The "light-asset tollbooth" model leads to high owner earnings that grow faster than GAAP revenue, supported by brand recognition and a strong franchise network [3][4] Growth Drivers - Growth is fueled by digital engagement, high-capacity restaurant operations, international expansion, and new meal offerings like breakfast [4] - The company has millions of active members in its digital and loyalty programs, which enhance customer retention and sales [4] Financial Performance - For FY24, Wendy's reported revenues of $2.25 billion, with operating cash flow of $355 million, translating to free cash flow of approximately $261 million [5] - Owner earnings are estimated between $299 million and $318 million, indicating a yield of 16-18% at current stock prices [5] Valuation - A two-stage DCF model suggests an intrinsic value of around $17 per share, with a conservative buy zone identified between $9 and $12 [5] - The investment thesis emphasizes reliable cash generation rather than aggressive growth, positioning Wendy's as a low-capital, high-cash-flow business [5] Risks and Challenges - Near-term risks include U.S. comparable sales volatility, labor and beef costs, and the need for disciplined execution of promotions [4]