Good morning and welcome to Wendy's 2025 Investor Day. Thank you to everyone for joining us here at Wendy's Restaurant Support Center and those on the webcast. For those of you in the room, I hope you enjoyed a delicious Wendy's breakfast. I'm Aaron Broholm, and I have the privilege of leading our Investor Relations team. We are excited about this morning as members of our leadership team will discuss Wendy's strategy for accelerated growth. Before we begin, certain information we discuss today is forward-looking and reflects our current expectations about future plans and performance. Various factors could affect our results and cause those results to differ materially from the projections set forth in our forward-looking statements. Also, some of today's comments will reference non-GAAP financial measures.
Investors should refer to our reconciliations of non-GAAP financial measures to the most directly comparable GAAP measure that can be found within today's presentation, which will be posted on our Investor Relations website. Now, let's look at our agenda for today. Kirk Tanner will share our growth strategy and key strategic initiatives. Then, Lindsay Radkoski will discuss how our customer obsession, fresh, famous food, and marketing playbook will build more brand love for Wendy's. Next, Abigail Pringle will share our U.S. business strategy to deliver an exceptional customer experience and operations excellence, and plans to accelerate growth for U.S. restaurant development. We'll then take a short break before E.J. Wunsch shares our international growth strategy and expansion plans. Following E.J., Ken Cook will discuss our long-term financial algorithm and capital allocation priorities. We will then transition to a question-and-answer session.
After the Q&A session, for those of you in the room, you will be treated to a delicious Wendy's lunch featuring some of our upcoming innovation. Before I turn things over to Kirk, let's take a brief look at the strong foundation Wendy's has built and the love customers have for our fresh, famous food. Thank you.
I'm ready!
That's incredible.
Baby, this year you can ask Santa for a new personality.
We are about to try Wendy's in London.
Wendy's in Japan?
In Australia.
In China.
I have never been to America, but this might be the closest I'm ever to come to.
No way.
An AI drive-thru?
So fancy.
[Foreign language] .
[Foreign language] Wendy's.
They are delicious.
You've got to be kidding me.
Wendy's, you got some good meat.
Wendy's breakfast. Feel like McDonald's should take some notes.
People started lining up at 3:30 A.M. this morning.
I'm so ready.
This is freaking awesome.
Wendy's, I love you.
One more, Brian. One more.
It's gotta be Wendy's, baby.
Please welcome Wendy's President and CEO, Kirk Tanner.
Keep up.
So many pretty girls around me and they're waking up to my keep up.
Good morning. There we go. It is a live audience. Let's go.
Good morning.
Thank you for joining us here in Dublin at our Restaurant Support Center. And thanks for those that are online for joining our webcast. We are excited to share our growth strategy with you today. And I can tell you, I've been in the job one year. I'm incredibly excited about the growth opportunities for us ahead and what will be different here at Wendy's. And we will talk a lot about that today. So let's get started. About a month ago or a couple of months ago, we just celebrated our 55th anniversary. And I was reminded of Dave Thomas and how he built the company from the beginning.
He said, "At Wendy's, our focus is on serving the best food, creating great experiences for our customer." I can tell you, we are going to take that to the next level. Critically important that we do that. A foundation and values that Dave started in 1969 are relevant today, but it's our job to take those even further. So there's three takeaways I want you to leave here with today. One, we are well-positioned to leverage the Wendy's strengths and brand equity to scale our system, to build more restaurants faster. We have a focused strategy that we are executing with a new level of operational intensity. And we will drive profitable growth to create value for our customers, our franchisees, and our shareholders. So why Wendy's? I've been asked this question a hundred times.
Many of you in the audience have asked me this question, "Why Wendy's?" My answer is simple and straightforward. It's our potential. Our potential to grow faster, and we will show you how we do that today, so we operate in this large market, $970 billion market globally, growing at 3% or forecasted to grow 3% over the next five years. What makes me most excited about this is that if you look at the U.S. business, we have one restaurant for every 56,000 people, and our competitors, our key competitor, has one restaurant for every 36,000 people. We have runway here in the U.S. to build more restaurants and to go further, and Abigail will take you through exactly how we do that. Now, internationally, we have 1,300 restaurants in 33 countries.
I would say we are just scratching the surface on our opportunity to build restaurants outside the U.S. and grow our global business with scale and speed and in that double-digit range. E.J. will walk you through exactly how we do that and the changes we've made to make that a reality. Now, let's talk about how we're positioned. I believe we are well-positioned to scale this business. One, it starts with our food. Highest quality food in QSR, without a doubt. Coupled with iconic brands, Frosty, Baconator, the Biggie Bag, we have iconic brands at Wendy's that customers love. We have a strong base of 7,200 or more than 7,200 restaurants to build from. And we are filled with passionate people that drive execution and customer appreciation every single day. So we're well-positioned to scale. And we are focused on attractive customer growth opportunities.
High-growth demographics like Gen Z, families, multicultural. Lindsay will walk you through how we go after these high-growth demographics to fuel our growth and our share. Thoughtful and personalization and engagement with our customers is critical at Wendy's. And we've made the technology investments and loyalty investments to drive that personalization. And I would tell you this, I'm really excited about this unique brand collaboration only Wendy's can do. And you saw this come to life with SpongeBob. Many of you have asked me questions about SpongeBob and what's next. And I can tell you, there's something next. And we'll continue to learn and do things that drive cultural relevance at Wendy's. And we're really excited to share those plans with you today. So it all starts. Our potential all starts with fresh, famous food made right for you. That is our promise. That's our commitment to our customers.
And that is a difference-maker. We will stand out with fresh, famous food, highest quality ingredients, delivered with an exceptional customer experience. I believe if you want to change, things have to be different at Wendy's. I believe culture drives strategy. And we have to make changes, and we have to shift our mindset to make those changes. What do I mean by that? We have to move, and we are moving from an inward-focused business to putting the customer at the center of everything we do. We have to go from inconsistent execution to perfect every time. I am sure you've been in a Wendy's where you've had a perfect experience. You might have been in a Wendy's where that experience wasn't perfect. We have restaurants that deliver perfect every time, every day. But we need to bring the entire system up to that perfect every time.
We will dial up our operational intensity to deliver that perfect every time experience. We've been North American concentrated. We have a great business here in the U.S., but we have to be globally scaled. That is our opportunity to do both, be relevant and excellent here in the U.S., but to have global scale and act and run a business with global capabilities, and we'll talk a lot about that today. Short-term priority shift to a long-term approach. Investing in the long-term, you've heard us talk about that. That is what we're committed to. Having investment year after year in driving growth and having a step change in our performance is where we're going. We have leaned in on our legacy menu, and it has served us well. Over the last 10 years, we've either held our share or we've grown our share.
I can tell you, that's not enough. That's not enough for us. We're hungry. We are going to be famous and differentiated with our fresh, famous food delivered with an exceptional customer experience, and we will play to those differentiations. Let me talk a little more about what I'm getting at. If you think about the difference between being liked and loved, what do you think about? You know, liked, we're customers. We like it. It's pretty casual. We just throw the thumbs up, right? That doesn't take a lot of effort. But when you love something, that's a commitment. It takes a little more effort. Let me tell you what it means at Wendy's. We have 200 million customers visit Wendy's here in the U.S. every year, 1.5 billion transactions, and the customers that tell us they like us come to our restaurants four times a year.
Customers that make us their number one choice and they love us come to our restaurants 20 times a year. So you're going to hear a lot about creating love here at Wendy's with our customer. That is why the customer comes first in our strategy. We've been making a lot of changes in 2024. We've been driving this cultural change and putting the right leaders in the right jobs, and I'm excited about this team. I am confident with this team that we have assembled here today to drive step change, performance, and difference. Let me introduce you a few. Look, the entire team is here. They're up front. You'll be able to meet them at the break and at lunch, and some of you got to meet them last night.
I have four leaders who are going to unpack our strategy for you today, starting with Lindsay, a talented marketer that has this customer-first mindset. She'll walk through our plans to engage the customer and deliver that exceptional experience at our restaurants. Abigail is a seasoned veteran of Wendy's and so passionate about driving a step change of performance and operational intensity at our restaurants and has already made several changes to deliver on that promise. E.J. Wunsch is a veteran executive who has international experience, and he has already restructured the international business, started building capability so that we can realize our potential internationally, and Ken, who just joined us from UPS, brings that operational intensity and bias for action and has been a nice add to our team to drive the energy that we need to drive the growth for the future. I'm excited about this team.
So let's unpack our long-term strategy. Well, let me talk a little bit about what we've been doing, okay? Placing the customer at the center of everything we do. You're going to hear a lot about that from Abigail. Operational intensity and marketing excellence, critically important. And you've seen some sparks from us, but we will get even stronger in these two areas. And we have strengthened our franchise system and our structure. We've made tough decisions to make our system stronger and built for the future. All right. Let's unpack our long-term strategy. Starts with these three pillars. I want you to walk away with three key pillars that are very simple, very straightforward, and they are the key components to our growth strategy. First, doubling down on fresh, famous food. The bar on fresh and quality ingredients is raising. We will stay ahead of that bar.
This will be a key differentiator for us. Delivering an exceptional customer experience is critical to the growth of our company and creating that customer love. Abigail will go deep on this today, and then, of course, accelerating unit growth is the greatest value unlock for us, and you'll see this is the largest differentiator of what's different for Wendy's for our future. It will be an accelerated global unit growth, both domestically and internationally. These three components and pillars create value for our franchisees and our shareholders. Let me give a little more detail on double down on fresh, famous food. We will scream this from the rooftops. The highest quality, greatest value. This is what we stand for. We have to scream this from the roof. We have to be really noticed for this and famous for this.
I'd say this is the iconic difference of Wendy's, doubling down on the ingredients that we serve every single day. Our craveable core is founded in these ingredients delivered with exceptional service. Impactful innovation. I would tell you that we are good at innovation. When we do innovation, it drives traffic. It creates cultural moments for our customers. And it's very exciting for our associates. This is something that is a strength. We will build on this strength. Global menu relevance is critically important in this global operating model. Our relevance has to be great in every market that we participate in. It has to resonate. And E.J. will walk through a little of the differences that we do in these international markets to really bring this to life, how we talk to our customers, and the menu that we deliver, all under this fresh, famous food strategy.
Delivering an exceptional customer experience, it starts with this mindset of perfect every time. We have a business model that is customizable. Personalization is so important today. Do you know you can build a Dave's Single more than 1,000 different ways? We're set up to do that today. That personalization, coupled with the technology and the loyalty programs that we're building, is a growth advantage for us in the future. Look, we want to be convenient across every channel. If it's delivery or digital or drive-thru or if you're in our restaurants, we want to have that convenient advantage across all those channels. And we will deliver hospitality that brings you back. This is so critical for our business and creating that customer love. All right. Let's talk about global unit acceleration. E.J. is going to go deep on this, but I want to share a few things.
One, it is about building strongholds in key markets. It's not about going everywhere. It is about focus and building capabilities in those markets that generate the most growth for us. It's strengthening those local capabilities, capabilities like our marketing, our supply chain, our ability to develop in those markets, our relationships with our franchisees. And we will invest in that growth to make that happen. We have three critical investments we're making. It all starts with the customer experience. Delivering the highest quality food. We'll continue to invest and raise the bar. Operational excellence. We've invested in field resources that will have our associates going into restaurants at twice the frequency, delivering exceptional customer service and standards. In technology, you've seen us make investments, and we have a lot of technology to share with you today.
But we're building this ecosystem with the customer-first mindset, creating loyalty and creating an advantage with things like FreshAI, our AI ordering system when you go through our drive-thru, our digital menu boards, our kiosks, enhancing our mobile app. This ecosystem drives customer love and cuts through to those generations that need these solutions. We're excited about our technology strategy and development. We've recently talked a lot about our investments in development. It starts with our next-generation restaurant that is efficient, that costs less to build, that is great for our customers. Our customers give us great feedback on our next-gen restaurants, which we've built over 300 of already. And we're excited to build more. They are flexible in design as well. And we will lead the way as a company as we build restaurants. We have to lead the way.
We'll double our growth in the restaurants that we build ourselves as company restaurants. Then we've leveraged a tool called Build-to-Suit. You've heard a lot about it, but this is a tool to accelerate growth and bring new franchisees into our system. Really exciting investment. I believe you have to invest in development over the long term. What does it all mean? It starts with unit growth. 3%-4% unit growth is the fuel. 3%-4% unit growth, coupled with healthy SRS growth, delivers 5%-6% annual system-wide sales, which in turn generates 7%-8% EBITDA growth. This is our long-term algorithm. If you think about our long-term algorithm, what does our business look like in 2028?
8,100-8,300 restaurants generating $17.5 billion -$18 billion in system-wide sales, which in turn generates $650-$700 million in Adjusted EBITDA. I am confident that we will deliver on these numbers. And this will be the Wendy's business in 2028. So I will finish where I started. We're well-positioned to scale this business. We are focused on a strategy that works for Wendy's and has a heightened operational intensity. And we will drive profitable growth and create value for our franchisees and our shareholders. So when we deliver this strategy, and we will deliver this strategy, it's got to be Wendy's. Thank you so much. I look forward to the team sharing the rest of the strategy. Let's have a great morning.
Please welcome Wendy's Chief Marketing Officer, U.S. Lindsay Radkoski.
Good morning. I'm excited today to give you a peek behind the curtain at what made the customers in that video before Kirk came on stage, what makes them so excited and passionate about Wendy's. I have been with Wendy's for 14 years, leading work and teams across both marketing and finance. Today, our marketing team is focused on engaging customers in a way that builds the brand and builds the business. We are relentlessly focused on driving more customers into Wendy's every single day. And we are doing this with a fresh, new approach. At the end of our time together, your takeaways should be, Wendy's is customer-obsessed. We are doing things differently, and we are primed to win. I am confident that we have the right recipe to both grow brand love with our customers and to grow the value of our business for shareholders, franchisees, and our employees.
Let's dive in. Our recipe is simple. There are three ingredients, and in marketing, it starts really in all of our business, but especially marketing, it starts with a customer-first approach. We know more about our customers today than ever before. They matter because they decide whether we grow. The second part of our recipe is fresh, famous food. There's one phrase that's going to ring in your mind this afternoon as you leave or as you get off the webcast. We hope it's that. Because we are well-positioned with high-quality ingredients, fresh preparation, and iconic brands on our menu. With a solid understanding of today's customers and QSR, we know where we need to evolve our menu while we keep that quality that we are known for front and center in everything we do. The third part of the recipe: world-famous marketing.
Wendy's has transcended from a fast food restaurant to a pop culture icon. Who else can say that? But we know that's not enough. It's not enough to just be famous. We also have to win customer visits with our marketing every single day. And we will be measuring all of our programs against that standard. Customer-first approach is not just a mantra for us or words on a slide. It's a commitment. And it is a way of operating that guides every single thing we do as a team. This commitment has allowed us to really dig deep and push each other to go beyond just who our customers are and what they do, to understand the why behind their actions and beliefs and their motivations. Because that's what leads to their choices. And they make choices about what they eat every single day.
This approach informs where we are positioning the Wendy's brand and our menu for future growth and how we are communicating to customers. The food service industry in the U.S. is huge, with nearly 71 billion visits last year. QSR is the biggest part of that industry, making up 65% of those visits. Even though it's big, we aren't focused on trying to be everything to everyone at Wendy's. We're focused on a subset of this population, the most frequent QSR customers, and we call these folks fast food superfans. Superfans visit QSR nearly 130 times a year, two to three times every single week. Today, Wendy's is getting about almost 20 of those visits. That's good, but that's not enough. We need to win, and we have a right to win more of those visits with these customers who are already in the category.
To do this, we have identified three gotta-win audiences that represent growing customer groups within the U.S. and QSR: families, multicultural, and Gen Z. Winning these customer groups now sets us up for success today and for years to come. Families represent 35% of QSR traffic, and they have a much higher average check than when people come to eat on their own. More importantly, the children in these households, like mine, probably like many of yours, these children are the future QSR consumers in America. And we need to keep building relationships with families today and for the future. The U.S. grows more multicultural every year. And this influences everything from fashion and entertainment to culinary trends. As we look at our existing customer base and those customers in QSR, Hispanic is the biggest opportunity for us. In 2024, Hispanic customers comprised 23% of QSR traffic, almost a quarter.
Based on their frequency, the projected population growth, we know this customer group will only become more valuable and important to us. Gen Z. Gen Z is a diverse generation straddling multiple life stages. Today, they represent 21%, almost 15 billion visits a year for QSR. Similar to other audiences, because of trends, their buying power will increase as they move into adulthood, and Gen Z's preferences will continue to shape cultural trends and brand relevancy in the market. Winning the hearts of Gen Z is what makes our marketing work even harder in the marketplace when they speak on our behalf about how great Wendy's is. Knowing who these customers are and what they do, which is what I just walked you through, that's not enough.
We built a proprietary consumer model for Wendy's that allows us to understand the whys behind how consumers make decisions related to food. We are using this new model in three ways. First, opportunity identification and prioritization. Second, initiative development and enhancing all of our programs before we ever bring them to market. And then third, continuous measurement across consumer groups and continuous learning. This new model has enabled us to get laser-focused on designing Wendy's menu of the future. And we are positioned to deliver on that menu in a way that only Wendy's can. Dave Thomas founded Wendy's with the core principle and belief that quality is our recipe. That's why fresh, famous food is not just a marketing tagline. It is in our DNA. We go out of our way to source high-quality ingredients.
We serve food in every restaurant that is freshly prepared, made to order exactly the way you want it. The quality that customers know, love, and expect from Wendy's will never change. How we bring it to life through menu items will. We have a big opportunity right now to introduce a more customer-first, modern, and relevant menu in some of our categories that build on the brand heritage that we have for serving high-quality food. We'll do this through balancing a craveable core menu, impactful innovation, and relevant value. With quality at the center, our core menu is positioned to win 365 days a year in the category. The equity of our core menu and some of those famous brands that Kirk already talked about, like Frosty and Baconator and Biggie Bag, our fresh, never-frozen beef, those platforms and brands, they are perfect for innovation.
We know that innovation drives traffic to Wendy's because we bring exciting new flavors on brands that consumers already know and love. And that engages our growth audiences in a way that drives traffic. And we know that it's important to our customers and will constantly be there for them with both relevant and timely value. Let's go through each of these pillars so you can get more detail on how they actually come to life and what's going to be different. Let's start with hamburgers. Americans love a good hamburger. How do we know? There are 6.4 billion annual hamburger servings in QSR, and we are set up to win in this category based on consumer preferences today. Our hamburgers have always been a shining example of how Wendy's exemplifies quality. Customers tell us in research that fresh beef tastes better.
Wendy's is famous for serving fresh, never-frozen hamburgers made with 100% North American beef. Wendy's hamburgers are served hot off the grill, just like that picture, made fresh for you every single time. As we've done our work on the consumer, we've tapped into an insight that frequent QSR, those fast food superfans that I talked about, they're so frequent in the category, they've learned that sometimes at our competitors, they need to use a menu hack in order to get fresh food, but not at Wendy's. And so in our most recent work, we lean into this customer truth and bring it to life. Watch with me.
Now, here's a little Wendy's menu hack for you. If you want a super fresh, high-quality burger every time, just tell them you want a hamburger. And then they'll give you one right off the grill, made for you, not waiting on you. No code words required. Every single hamburger, every single time. Okay, so that's not really a menu hack. When it's made fresh every time, got to be Wendy's.
Made fresh for you, not waiting on you. And we're not going to be shy about telling that story. If you don't believe me, go on TikTok or Instagram later and look up menu hacks, and you'll see what I'm talking about. There are things that customers do to get fresh food at competitors, and they don't have to at Wendy's. Next, during March Madness, we're taking a big swing at the other guys that serve frozen patties, building off of this work and the customer insights here. I've already said or mentioned our core menu sets us up to do amazing things with innovation.
And we know that this important consumer segment, one of our consumer segments, is highly motivated by new products. They want to be the first on TikTok in their car, phone on the dashboard to talk about what's new and different at Wendy's. That's why we have a strong pipeline of innovation, including mouthwatering hamburger LTOs, so that we can satisfy those customers looking for discovery and thrill. These LTOs also help us drive home our quality attributes and points of difference. Moving on to our next key category. I bet you thought we would talk about this one today, right? Anybody? Okay, a little couple smirks. All right, chicken. Chicken's a big deal. Chicken sandwich servings in the U.S. were 2.7 billion last year, and growth in this category has been significant. We've all seen it.
When you include nuggets, strips, or tenders, handheld chicken in that category, it's eight billion servings last year, and that has grown 16% since 2017. Chicken over-indexes with all three of our key growth audiences. And based on trends with those audiences and why they're eating chicken, we don't expect the growth in chicken to slow down anytime soon. Our mission is clear. We will become famous for chicken. Our menu work on chicken is more intensive than ever before. Starting with our upcoming collaborations, they are intentionally focused on bringing to life consumer passion points and cultural trends with chicken products at the center. Second, we are enhancing our core chicken menu lineup, that everyday menu in our restaurants, in a very big way.
All of the innovation and work that we're doing on chicken is designed and tested to meet the flavor, texture, and quality expectations of the modern QSR consumer. Our hamburger and chicken offerings will be a powerful one-two punch in the category, providing consumers more options on more occasions to come to Wendy's. Next, let's talk about frozen desserts. This category represents 1.7 billion annual servings in QSR, and Wendy's has one of, I would argue, the most iconic frozen dessert or frozen treat that's in the category. Anybody? No, come on, Frosty. You're all Frosty. All right, Frosty. Frosty is the most iconic brand in the frozen treats category. It's unique to Wendy's. It is broadly appealing, and our customers love it. That's why we are evolving Frosty from a product to a treat destination in and of itself.
We will be a destination when that craving for a sweet treat strikes any and all of our customers. I'm happy to confirm today, after some Reddit leaks and media inquiries over the last few weeks, that we are launching two new ways to Frosty at Wendy's this spring: Frosty Swirls and Frosty Fusions. Toppings and mix-ins are very popular among younger consumers. They help fulfill their desire for new flavors and variety. Frosty Swirls and Frosty Fusions are specifically designed to meet this consumer need with a new lineup of sauces and mix-ins. And we haven't just designed a great product. We've designed and created a customer experience around this product, an experience that makes Frosty a destination. We have a new Frosty Forward Cup, a new lid, and even a new custom Frosty Blue Spoon designed for the perfect eating experience.
This spoon allows customers to get every bit of Frosty goodness out of the bottom of the cup. We're down to that level of detail in how we're studying how consumers eat and making sure that at Frosty at Wendy's, the bites almost get better as you go instead of getting to the bottom and having none of the goodness. Every little detail matters in putting the customer first. Customers also look to beverages to fulfill that need state of wanting to treat myself or provide a simple, affordable, everyday indulgence. That's why there are 35 million beverage servings in QSR every year. The Coca-Cola Freestyle dispenser sets us up to meet today's customer preferences for variety and personalization. The choices for the customer are endless across brands, flavors, and even custom mixes that sometimes can showcase our partnerships and collaborations.
For example, we brought to life five custom mixes, one for each of the five sports personalities on Fox Big Noon Kickoff, which has been one of our big partnerships over the last few years. We will have beverages in all of our partnerships and collaborations moving forward. Our premium craft lemonades are also incredibly loved by our customers, and this product over-indexes with Hispanic consumers and Gen Z. We will leverage this platform to drive differentiation and innovation. This summer, we will test several new innovations, leveraging our current beverage lineup and those equities with new flavors and new formats. Beverages are important to consumers all day long, but especially in the morning. We will use our strong foundation in beverages to build out our coffee and energy offerings because breakfast is a huge part of QSR.
Within our direct competitive set, there are 3.6 billion morning meal visits every year. At Wendy's, we are committed to the breakfast day part. Our next horizon of growth at breakfast is in beverages. Consumers are deeply habitual in the morning, and these habits often center around their morning beverage of choice. We are building a strong beverage lineup for consumers in the morning that will be just as compelling and craveable as our breakfast food. Finally, I want to hit on what relevant value means at Wendy's. It's more than price and discounts and deals. At Wendy's, value starts with quality. We hold our entire menu to a customer standard of being worth what they pay every time. It's not just about the price. It's just as much about what you get.
That's why our iconic Biggie Bag is uniquely positioned to deliver industry-leading value and variety at attractive price points, and we've been leading the way with the Biggie Bag since 2019 when you look at meal deals within QSR. We will further strengthen our value leadership position through continuous innovation and strategic expansion of the Biggie Bag platform. Customers don't only love Wendy's for all of that fresh, famous food that I just talked about. They also love our marketing. Our marketing is loved because it is fresh and bold and engaging, and in addition to those attributes, which are incredibly important, my definition of world-famous marketing is marketing that drives business results, that wins traffic and gains share every single day. We are students of how consumers study, or we are students, sorry, of how consumers engage in media, social platforms, brands, how they look at content.
We really study all of their interests and passions, especially with the segments that we have identified as priorities. And then, in order to connect authentically, we participate in the world with our consumers. We don't show up as an advertiser. We show up as a human, almost as an influencer ourselves. We show up in an authentic, approachable way, and we live by the saying that our personality needs to be just as fresh as our food. This customer-first approach and living in culture with them is why collaborations have become such a big part of our playbook. When we identify a brand fit for a collaboration, we take time to really understand their brand and our shared customers. Then we create something unique that could only be born out of a true collaboration. We say we don't do sponsorships. We collaborate. We build something together.
And first, that starts with the food. Our standard for collaborations are innovative, never been done before menu items that could only come from Wendy's. Second, the marketing. The content, creative, and experiences that we develop through collaborations tap into consumer passion points and culture in a big way. The images on the screen, I'm sure you're familiar with them, are from the SpongeBob collaboration last fall. As a result of the depth and the energy that we put into collaborations, fans of both brands reward us with engagement in the marketing and visits to our restaurants. That is building brand love and building the business. Other brands want to partner with Wendy's. Our team gets phone calls all the time, and we are fortunate that we can be choiceful about the brands we partner with.
We have a pipeline of collaborations with other brands, and today I'm going to talk to you about two. The first is Girl Scout Thin Mints Frosty. The customer engagement opportunity and multi-generational appeal made this collaboration a no-brainer. The insight behind the collab, cookie fans love to put their Thin Mints in the freezer. They believe they taste better frozen. So we combined two iconic fan favorites, Girl Scouts Thin Mints and our iconic Wendy's Frosty. We also tapped into a major passion point with consumers right now with around nostalgia. We are hosting Girl Scout troops at our restaurants to sell cookies. And through this, we're not only selling Frostys, but we're reaching families and kids. We're helping families share childhood memories of parents talking to their kids about when they were Girl Scouts.
We're finding things with multi-generational appeal that connect generations together, lead to phenomenal engagement and results. It's only been a few weeks, and Thin Mints Frosty is already famous. The thoughtfulness in this partnership across both teams has paid off in how much energy, customer anticipation, Frosty love, and traffic we've seen at our restaurants. We integrate all of our marketing in our digital channels like our app, creating a customer experience that's unique to Wendy's for our most engaged brand fans. We do this because digital customers come more often and spend more than non-digital customers. Gamification and entertainment have become a big part of our app experience. We just put our toe in the water on this with SpongeBob, and what we learned is one of the things that will be very different with collaborations as we go forward. So with Thin Mints Frosty, we went even bigger.
We created a game in the app, a custom game called the Thin Mints Frosty Adventure, and this allows our customers to engage with the product digitally when they're not at our restaurants and spend more time with our brand and our app. Now, I know that all of you in the room have our app, so I'm not going to ask you to download it, but I will ask you to play the game later today. I think you'll be impressed. This type of engagement enhances loyalty with customers and generates all of the insights around them and the data that we're able to use across our entire business to make more customer-first decisions. Next, I get to announce it's on the screen already. I get to announce a collaboration for the first time, and I thought Kirk was going to take it earlier.
You were this close, weren't you? You almost said it, but he let me do it. We are incredibly excited to announce a collaboration with Takis this summer. Takis is sold in more than 40 countries and has a 79% brand awareness among Gen Z. Nearly half of Takis' social followers are 18 years old -24 years old, and this is a valuable customer group for us. They are right there in the Gen Z sweet spot. This collaboration is Wendy's take on Takis' brand ethos, intensifying the fire within. For those of you in the room, you will be able to try many of the new products that I've talked about at lunch later today.
So now that you've had your peek behind the curtain at what makes the customers in our video and the customers in our restaurants so excited about Wendy's, I hope you understand some of the main components of how we are approaching our engagement with them. First, we are customer-obsessed. We're using new tools, data, and insights to direct, strengthen, validate, and measure every single thing we do across the marketing function. Second, we are perfectly positioned to win with our menu. Fresh, famous food made right for you is a space that Wendy's can and has owned and still owns and that customers care about. The intersection of those two things is magic. We are leveraging our menu strengths and acting with urgency to win with super fans in the areas that are fastest growing in QSR, the most important categories.
Third, the marketing that you know and love and have come to expect from Wendy's over the last few years is better than ever. With a consumer framework and deep insights and an effectiveness mindset, we are focused on marketing that builds the brand and builds the business. Wendy's is an iconic brand, and we have a powerful, proven marketing playbook. Coupled with the operational focus on delivering a perfect every time experience that Abigail will talk about next, I'm confident that when customers are hungry, the choice will be easy. It's got to be Wendy's. But don't take my word for it. Let's hear directly again from our customers in a short video.
It's going to be good. Boom. These are good. I love Wendy's chicken nuggets. Damn, Wendy's. Oh, wow. This is great. Who eats a burrito like this? Frozen bad. Fresh good. This is heavenly. Thin Mints Frosty. This thing is absolute Girl Scout bliss. Life-changing. Wendy's. Wendy's right out of the gate, son. Oh, God, that's fine. Oh, my God. It's got to be Wendy's. Wendy's. Wendy's.
Please welcome Wendy's President, U.S., Abigail Pringle.
I don't know about you, but I'm hungry for lunch after Lindsay just went through all of that. It's so exciting. It's been fun to work with her on this exciting innovation. But good morning, everyone. It's great to have you here all today. And for those of you on the webcast, I'm so excited to be leading our U.S. business after spending six very special years transforming our international business. You know, when I took on the president role last summer, it truly felt like I was coming home. I had spent the previous 17 years in various U.S. roles, really revitalizing the brand, building strong franchise partnerships.
Today, we have a healthy U.S. business. We have more than $12 billion in sales and 6,000 restaurants and nearly 200 million customers visit Wendy's every year. Wendy's is an iconic and important brand, and it has a powerful legacy. This brand has an even more tremendous future. Over the past several months, I've been visiting restaurants, talking with employees, talking with franchisees and company operators, and engaging our suppliers and distributors. I spent countless hours digging into our operations, restaurant economics, and our customer feedback. This has clarified for me both our strengths as well as our opportunities of where we can do better. These insights are the catalysts for how we're going to accelerate growth in sales, profits, and new restaurants. As Lindsay just shared, we are doubling down on our fresh, famous food. As a restaurant company, food is our foundation.
It represents many of our points of difference, and importantly, first and foremost, why people come to Wendy's. Great-looking restaurants also bring more customers more often. With our successful Image Activation initiative, we have a restaurant system that is more than 90% modernized with a fresh contemporary design, and we're on our way to being nearly done this year, but there is even more to a great Wendy's experience than famous food and beautiful restaurants. The secret ingredient is great service and hospitality. To be successful, our founder, Dave Thomas, often talked about the importance of having an MBA in the restaurant business, and no, he didn't mean a degree from a prestigious business school. It's what he called a mop bucket attitude. Yes, MBA, you got it. It's a simple but powerful idea and signifies the mindset we must have to win.
It's about doing what's necessary to deliver excellence and hold standards high, even small tasks like mopping the floor and making sure the mop bucket is clean. Having an MBA prioritizes service and focuses on quality and doing the right thing on behalf of the customer and the brand. The single biggest driver of our future success and unlocking our potential is delivering an exceptional customer experience in every restaurant, every day, with every visit. You've heard the saying that you only have one chance to make a good first impression. Well, many of our restaurants do this day in and day out. But we are not consistently making a good impression in all restaurants. To deliver on our brand promise of fresh, famous food made right for you, we must make every order perfect every time.
This is our promise regardless of how customers engage with us, through our drive-throughs, enjoying a meal in our dining rooms, and via digital channels. Because we make our food fresh, made to order, and every customer can make it just the way you want it, perfect every time, it's not easy. But perfect every time is who we are, and it's our commitment. We are increasingly increasing our intensity related to our operations across every restaurant and making transformational changes to our operating model. Our new operations vision is called the Model of Excellence. There are three components: a Model Restaurant, Model Performance, and Model P&L. The Model Restaurant defines the standard. It's the One Best Way. Model Performance is how well a restaurant performs against the benchmark.
If you have a Model Restaurant and it's achieving Model Performance, then you're likely having a Model P&L achieving great profitability. The Model Restaurant has the best general manager and management team in the business. They're disciplined with training, and they're great with recognition. They have a culture where the team loves to win. They have a customer-first mindset, listening to and caring about their customers, using their feedback to strive for better. They have great pride in their restaurant because it has a contemporary brand image and all the required restaurant equipment and technology they need. They follow the Wendy's One Best Way for operations and food quality. We have many Model Restaurants across the U.S. today. They lead the system with the highest AUVs, and they're growing sales and customer visits year over year over year.
They have high customer satisfaction and are consistent in their operations. And as a result, they're highly efficient and have strong restaurant profits. To unlock our potential, our mission is to ensure all Wendy's restaurants are Model Restaurants. We will lead the way with our company portfolio, and we will work side by side with our franchise partners to drive consistency from one restaurant to another. Let me tell you more about the new discipline we are putting in place. We have a high level of intensity, pace, and rigor to bring the Model Restaurant to life. To start, we developed a new scored Model Restaurant assessment. Every restaurant will get evaluated regularly by our field operations team. It is heavily weighted towards the customer experience in the areas affecting food quality, taste, and accuracy.
It looks at our core operating systems and the critical areas affecting people excellence, like training, turnover, and hospitality. This tool tells us where we need targeted coaching, training development, and a disciplinary action plan to drive improvement. Operators will also use this tool for self-evaluation and driving what they can on our additional coaching and seeing momentum in between Wendy's official visits. In addition to this assessment, we'll track key measures against the benchmark for Model Performance. And the benchmark, it's top quartile industry performance. The expectations are high, just like those of our customers. Our performance scorecard is focused on key measures that are directly tied to what it takes to be a Model Restaurant. These include sales and profit, people and operations excellence, and customer satisfaction.
This spring, we are deploying a new business intelligence platform across our system so there is one source of truth providing Model Performance analytics, reporting, and insights to our operators. They will use this information to ask the right questions, diagnose issues, and inform targeted solutions. Operators will understand how their restaurants stack up against others. Because let's be real, a little healthy competition goes a long way in driving performance. To bolster our Model of Excellence, we're adding more field operations managers, allowing us to double the number of restaurant visits we do today. All restaurants will get visited regularly, and underperforming ones will get even more support to unlock their potential. We're also improving how we will work with our franchise partners. In the past, we had multiple people assigned to each of our 200 U.S. franchisees, making it unclear who is ultimately accountable.
In our new structure, accountability is crystal clear. Each franchisee has one dedicated Wendy's leader to steer their performance, create action plans, and discuss their whole business. Our business leaders will partner with our franchisees on operations performance, engagement in brand initiatives, and profitability, including their capital planning. Remember, the third component of our Model of Excellence is the Model P&L. We create a more compelling economic model when we have Model restaurants delivering an exceptional customer experience while operating the most efficiently. We're well-versed in the economics of franchise offerings out there, and now Wendy's can be even more competitive. And when we become more competitive, we have the potential to build even more restaurants faster. And let me be clear, I'm very competitive. At the start of last year, we benchmarked our restaurant EBITDA to others and saw a 200 basis point -300 basis point improvement opportunity.
To capitalize on this upside, we began thinking very differently while developing a multi-year margin plan. We put this into practice with company restaurants and franchisees who wanted to be early adopters. In 2024, we realized 70 basis points of improvement in our company restaurants, helping to achieve a 16% U.S. restaurant margin despite labor and food inflation headwinds and a highly competitive sales environment. We have set out to improve company margins even further by more than 200 basis points as compared to 2024, with annual progress milestones and incremental benefits in 2025 through 2028. Do you want to know how we're going to do it? Yes. There are five major drivers of our multi-year margin strategy. First is P&L benchmarking, operations productivity upgrades, evolving our menu strategy, driving efficiency through technology, and labor model evolution.
I'm going to tell you just a little bit about each of these and why we're so confident. First, we have defined the Model P&L, which sets the standard for restaurant profitability. We have evaluated the optimal profitability by sales or AUV band, as well as the productivity that should be achieved for Model Performance. We have identified the most common areas of inefficiency, such as energy management, food cost variants, and transactions per labor hour, just to name a few. So how do we increase profit at scale? We're implementing a new P&L collection and benchmarking platform. We'll have monthly automated restaurant-level P&Ls and balance sheets for all franchisees. This will move us from reactive to proactive financial management. We'll also leverage these insights to better inform our brand development strategies, such as marketing promotions, menu development, and new restaurant expansion.
2025 is a year of building a stronger financial discipline and helping operators understand how they compare to the benchmark and where they can make more money. Next, we have tested and proven out the benefits of several productivity upgrades. These reduce the weekly labor hours required to operate effectively and together target about a 1% margin benefit. These make running restaurants easier and, in turn, improve the morale and engagement of our restaurant teams. And they also help us provide a better customer experience and deliver on our promise of perfect every time. Let me tell you about just a few. First is our operations tablet. These handhelds simplify tasks for our managers and help to stay on top of key operational procedures. Here's a question for you. How many of you like doing dishes? I know I don't. Of course not. And neither do our team members.
So they're excited about the new warewash dishwashing machine that saves valuable time. We've implemented new delivery scales system-wide that make huge improvements in our accuracy of our delivery orders and reduce costly refunds. We're simplifying food preparation and improving the accuracy of our customized orders with new labels, making it easier for our customers to determine which sandwich is theirs. We've been excited about the early wins that are beginning to take hold and with the full benefit being realized over the next couple of years. You've heard Lindsay share the exciting work underway to evolve our menu. And I'm jazzed by the way our team is activating to modernize and create a more modern menu. It's customer-obsessed and can be executed consistently, and it's increasing our profits. So how do our menu changes increase profits?
When we drive more top-line sales growth through increased customer visits and frequency, we create better sales leverage. As we evolve the menu, we also have an opportunity to increase the mix or shift the mix to more profitable items reflecting what customers are craving most, while at the same time improving our margins. Increasing our beverage business is a great example of this. About 30% of our customer visits today don't include a beverage. This is an opportunity for growth when these are highly profitable. The expansion of our Frosty offerings is another great example. We're adding to our traditional lineup, giving the customer flavor and variety with mix-ins and toppings. This is an opportunity to increase our overall Frosty mix and offer a more premium product option.
As we evolve our menu and listen to our customers, simplification of our ingredients and our menu offerings will help improve execution, the customer experience, and drive efficiency. Our menu strategy will be a game changer for increased profitability. I think we'd all agree that technology has become the backbone of modern life, and the same is true at Wendy's, where technology is helping us create more personal connections with customers and a more consistent and elevated experience. It's also driving operational efficiency and improved profitability. This year, our system is making a foundational investment in a new modern tech stack, which will allow us to build more innovative customer and employee solutions and take friction out of the experience. The rollout is already underway and will be complete by year-end. The other investment we're making is in the transformation of our restaurant ordering experience.
This is a great example of Wendy's having a first-mover advantage as we started our partnership with Google more than two years ago. And we're accelerating the implementation of digital menu boards, voice-enabled ordering with FreshAI, and digital kiosks. These platforms simplify ordering and free up the team to focus on food quality, order accuracy, and great hospitality. They provide a streamlined, personalized experience for our customers both in and outside the restaurant. And we see larger check sizes too. We have advanced our digital journey with the implementation of digital menu boards at over 300 company and franchise locations. And we've deployed FreshAI at more than 100 locations, including at our flagship restaurant across the street. We're pleased with the results, but let's hear from some team members to get their take.
Hi, welcome to Wendy's. FreshAI has become an extension to the crew members. She's a support system that the crew know that they can rely on. They're now having the mobility to be able to turn around, engage at the window, support with bagging for accuracy.
The customers have loved AI. They're able to have a friendly voice take their order, able to see their order on the screen, which has helped a lot, making sure the order is correct.
Would you like to make it large? Yes. You used to have to worry, do I have somebody that speaks Spanish because we're in the area where you need to have both, and FreshAi does that. [Foreign language] .
Digital dining room has created more mobility for our front cashiers to be really raising the bar and customer courtesy because they know they're not locked into position. Our demographic is very international, and the kiosks let you take a lot of orders for a lot of different languages because it's picture-based. You just have to know, I want that. [Foreign language] . AI has had a huge impact on our customer experience. She is never late, and she's always on time. She is always friendly. She is always polite, and she's always patient. We get rushes to go right to the kiosks, and we can get a lot more people through a lot quicker. So each customer is getting that same friendly experience through open to close no matter the day part.
I love it. I think the best endorsement for innovation is what we hear from our restaurant teams, and it's exciting to hear the enthusiasm from Jessica and Sarah and William. We look forward to accelerating our expansion this year over to more than 500 restaurants this year and continuing our momentum, and we work to improve our restaurant profitability. Let me speak briefly to the important work on our labor model evolution. Last year, we took a fresh look at how we unlock productivity. We considered the significant growth of our digital business and refined our labor model to better reflect changes in our food preparation and our operating systems. These changes contribute to the margin improvement we saw last year.
And we're continuing this work with a major sense of urgency and with an innovative and a disruptive mindset on what is needed to make Wendy's restaurants the very best place to work and to deliver on our food quality while at the same time radically simplifying how we bring the experience to life. Technology innovation will play a major role in evolving our labor model and improving our operations excellence. The model of excellence is the recipe for reinvention of our customer experience. This starts with the Model Restaurant, where the new brand standards are non-negotiable. It's multiplied by our commitment to achieving Model Performance and moving every restaurant to the top of its game. Through P&L benchmarking, productivity upgrades, modernizing our menu and our labor model, and investing in transformative technology, we will reach a new level of restaurant sales and profitability creating that Model P&L.
With an even more compelling economic model, we will ignite net new restaurant growth. Over the last three years, while our U.S. hamburger peers have been largely shrinking their footprints, we have been upgrading and replacing our locations with underperforming trade areas with new contemporary restaurants in vibrant growing markets. We have completed market plans with the power of big data to inform the more than 300 net new restaurants we will add by the end of 2028, helping us contribute 30% to our plan for global growth. Fresh Famous Food, delivering an exceptional experience and a more compelling economic model, will fuel our growth along with three development-specific strategies. First, a future-forward global next-gen design, growth-minded franchisees, and a leadership role the company is taking to lead the building of our brand. When it comes to Global Next Gen, this is our new restaurant design standard.
We ended the last year with nearly 300 Next-Gen restaurants worldwide after releasing the design just 24 months prior. It's loved by our franchisees. It's also loved by our customers and communities. Why? Well, it has a digital-first design. For example, it features dedicated parking and a window for delivery and mobile orders. It's also a highly efficient design with an estimated 10% savings in energy use. And it allows us to flex when it comes to available real estate because we can now build in as small as a quarter of an acre while providing the full Wendy's experience. We have met or exceeded all of our operational targets too with an entirely redesigned modern kitchen. Its highly efficient operating model has laid the groundwork for improved profitability as it includes all the productivity upgrades I mentioned earlier.
Global Next-Gen sets the stage for better returns while shortening the payback period, unlocking more opportunities for Wendy's to grow our U.S. footprint. In addition to a future-forward design, we are working with our growth-minded franchisees to bring more Wendy's to even more fans. 80% of our biggest franchisees are engaged in new development, and we've been busy recruiting dozens of new franchise candidates. Through our compelling incentives, even more franchisees are planning for growth. These incentives are an important way the company is helping to accelerate franchisee growth through 2028. We're also leading by doubling the net growth rate of new company-operated restaurants, and we're confident in our returns and believe we should role model our new restaurant playbook. Leadership also comes through our Build-to-Suit program. This program is where the company funds most of the costs of the building and real estate if needed.
And the franchisee pays for the equipment, technology, and other items. We provide valuable real estate design, construction, and operational services to give these franchisees a lift and help them grow. We will see the accelerating effects of company-led development in 2025 and beyond. I'm confident that we have the right focus strategies in place for the U.S. business to deliver Fresh Famous Food, exceptional customer experiences, and to accelerate new restaurant development. There's no doubt in my mind that Wendy's is positioned to live up to its potential. When it comes to the future of excellence and growth, it's got to be Wendy's. Thank you very much.
Ladies and gentlemen, we will now take a short break.
I know sometimes you'll be afraid, but no more playing safe, my dear. I'm here, so wake up. You've been deep in a coma, but I stood right here. When you thought there was no one, I was still right here. You were scared, but I told you, open up your eyes. I was always in front of you, so wake up. You're sleeping hard. I know sometimes you'll be afraid, but no more playing safe, my dear, so wake up. You're sleeping hard, and we will dream a dream for us that no one else can touch, my dear. I'm here, so wake up. So wake up, you're sleeping hard, and we will dream a dream for us that no one else can touch, my dear. I'm here, so wake up. All I can say is that my life is pretty plain. I like watching the puddles gather rain, and all I can do is just pour some tea for two and speak my point of view, but it's not sane. It's not sane.
I just want someone to set me up. I'll always be there when you wait. Me at hell. You know I like to keep my cheeks dry today. So stay with me and I'll have it made. And I don't understand why I sleep all day. And I start to complain that there's no rain. And all I can do is read a book to stay awake. And it rips my life away, but it's a great escape. Escape. Escape. Escape. All I can say is that my life is pretty plain. You don't like my point of view, you think that I'm insane. It's not sane. It's not sane. I just want someone to set me up. I'll always be there when you wait. You know I like to keep my cheeks dry today. So stay with me and I'll have it made. I'll have it made.
I'll have it made. No, no, no, no. You know I really want to really go and have it made. You know I'll have it made. Ladies and gentlemen, please take your seats. Our program will begin shortly. Ladies and gentlemen, please take your seats. Program will begin in five minutes. And hide. Do you remember how it felt when we were young? Do you remember how it felt when we were young? But today we have the chance to feel again, to hear the sounds that brought us in, to laugh, to cry, to live again. But today we have the chance to feel again, to hear the sounds that brought us in, to laugh, to cry, to live again. Like when we were young. Like when we were young. Like when we were young. All your hopes and dreams, they will collide.
Take all your things, you go and run and hide. Do you remember how it felt when we were young? Do you remember how it felt when we were young? Today we have the chance to feel again, to hear the sounds that brought us in, to laugh, to cry, to live again. Today we have the chance to feel again, to hear the sounds that brought us in, to laugh, to cry, to live again. Like when we were young. We were young. We were young. We were young. We were young. We were young. We were young. We were. We were young. We were young. We were young. We were young. We were young. We were young. We were young. Like when we were young.
Ladies and gentlemen, please take your seats. Our program is about to begin.
One moment lost to bed. Saw a mountain, went to bed. Paid a ransom for a ghost for the thing I want the most. So I left to find a home for a place to call my own. Even if you think we're not, we're close to close enough. It's an end to end the start. We're moving from the ground floor. Rise inside. Push us off more. How we climb as the water's pouring here. Like it always should.
Please welcome Wendy's President, International, E.J. Wunsch.
Good morning, everyone, and welcome back from that short break. It's great to be here today and share more about Wendy's exciting international expansion. Wendy's has strong momentum outside the United States, and we are well on our way to reaching 2,000 restaurants by 2028.
A testament to our brand strength and the confidence that we have in our franchisees, our teams, and our strategic investments. Today, I'll walk you through our strategy, the markets with the greatest opportunities, and our disciplined approach to driving long-term profitable growth. Wendy's has never been better positioned to scale internationally, and I'm excited to share why the best is yet to come. But before we dig in, I want to share a little bit about me. I spent a number of years living and working in Singapore with Procter & Gamble, gaining invaluable experience in navigating diverse markets. Over my 17 years with P&G and more than eight years here at Wendy's, I have approached every role with a business-focused mindset, driving growth while managing complexity. This will serve me well as the President of International. Now, let's dive in.
To realize our brand's potential, we must deliver on these three strategic growth pillars, as Kirk outlined earlier. Our Fresh Famous Food, combined with our exceptional customer experience, fuels our international expansion. And you'll hear me talk about both. But first, let's talk about the momentum we have today and our plans to accelerate our global unit growth. Under Abigail's outstanding leadership, Wendy's International business achieves strong and sustained growth. Over the past three years, we've added nearly 300 net new restaurants, expanding our international footprint to over 1,300 locations across 33 international markets. This disciplined approach to development resulted in a 9% net unit growth CAGR, underscoring our ability to scale strategically and efficiently. The expansion has resulted in annual sales of nearly $2 billion, which represents a 14% sales growth CAGR over the past three years.
These results highlight the brand's strength and the growing consumer demand for Wendy's in markets around the world. With this solid foundation, we're well positioned to accelerate growth even further. Wendy's International business is poised for increased expansion and scaling to 2,000 restaurants is well within our reach. Over the next four years, we expect to increase our growth from a 9% net unit CAGR to an 11% net unit CAGR. The acceleration is driven by a clear strategy that focuses heavily on expanding our footprint in existing foundational markets where we already have a meaningful presence. It's further supported by strong unit economics and growing international demand for Wendy's. With this accelerated growth, we expect 70% of the brand's expansion over the next four years to come from outside the United States.
We'll achieve our goals by doubling down on our proven performance in existing markets and supplementing that growth with untapped opportunities in new and emerging regions. We're actively engaging with both established and new franchise partners who are eager to invest in Wendy's. They're attracted by our compelling value proposition, our strong consumer appeal, and our scalable business model. But Wendy's is not just entering markets and opening one or two restaurants. We're building sustainable, long-term businesses in every country in which we operate. We start by selecting the right markets, ensuring that every expansion is grounded in strong demand, favorable economics, and the ability to establish a competitive edge. Next, we invest in local teams and high-value partnerships.
We follow the mantra, "Globally great, locally even better." At the same time, we carefully select franchise partners who align with our long-term vision and have the operational expertise to drive profitable, sustainable growth. We extend our supply chain and scale efficiently to maximize profitability. Our integrated North American supply chain has been highly effective, and now we are expanding this model to all of our international markets. But what truly sets Wendy's apart is better food served in better restaurants than our competition. Our brand promise, which we've talked about, Fresh Famous Food, made right for you, resonates across borders, fueling customer loyalty and strong unit economics. Beyond great food, we build deep consumer connections in every market. Our localized menu innovation and strategic marketing tailored to regional tastes keeps the brand relevant and in demand. Simply put, we have a winning recipe to drive global growth.
What does this recipe look like in action? Canada is a great example. We have more than 400 restaurants and approximately CAD 1 billion in revenue. Canada stands as a proven model for Wendy's international success. The business demonstrates how scale, supply chain strength, superior brand experience, and strong franchise partners fuel profitable growth. Wendy's has built a fully integrated business across Canada with a regional headquarters providing dedicated support. With an average restaurant AUV of over CAD 3 million, Wendy's is delivering higher returns, reinforcing our position as a market leader. And over 70% of our Canadian franchisees are expanding their footprint, reflecting confidence in the brand's strong unit economics and long-term potential. The brand has also deepened consumer connections through a national advertising strategy, a successful loyalty program, and a mobile app, which is driving engagement and repeat visits. We have an efficient supply chain.
It combines the purchasing power of our U.S. and Canadian businesses, ensuring better food and better restaurants than the competition. Currently, we operate one restaurant per 80,000 Canadians and are rapidly approaching the U.S. density of one for every 56,000. Canada is proof that Wendy's growth model works, providing a clear blueprint for the brand's accelerated expansion across international markets. So we know how to win. We know what it looks like when we win. Now let's talk about where we will win. The Asia-Pacific and Middle East regions represent a significant opportunity for Wendy's. We will add over 300 new restaurants with India and the Gulf region serving as anchors for broader growth. In Europe, our recent entry into the U.K. is already paying dividends, paving the way for previously announced expansion into Ireland and Romania.
Our strong UK presence has unlocked new opportunities in other markets as well, and we're confident that these will soon translate into new restaurants being built. In total, we will add more than 150 new restaurants across the UK and surrounding countries. In Latin America, we're increasing our presence. We'll add more than 125 new restaurants. We're focusing on Mexico, turning it into a foundation for continued growth across Central and South America, capitalizing on strong consumer demand in these regions. And in foundational markets like Canada, we're going to build on our current success. We'll add more than 125 restaurants over the next four years, continuing to position Canada as a key growth engine for further expansion across North America. Now let's dive a little bit deeper into the markets where we are accelerating.
India and the Middle East, they've emerged as Wendy's fastest-growing markets, with over 150 net new restaurants added in just the last three years. Our master franchisee structure in these markets enables rapid, cost-effective expansion with well-capitalized, highly experienced partners who share our passion for the brand. With deep operational experience, talented management teams, they know how to make the brand locally even better. We're also elevating our quality and differentiation in the region, leveraging our global supply chain to bring superior products and ingredients to the market. For example, India, we've tailored our menu with chicken and vegetarian options, catering to diverse dietary preferences and increasing brand accessibility. The approach fuels higher guest frequency and even more brand love, and in Saudi Arabia, we offer the Beefinator, featuring beef bacon to address cultural dietary needs.
This sets Wendy's apart from the competition, reinforcing our commitment to premium localized menu offerings. Finally, it's worth noting that we are adding franchisee recruiting and development resources on the ground in Asia to further stimulate our growth in existing and new markets. We're building a high-performing, differentiated QSR brand in the region, creating strong returns for our franchisees and long-term value for our investors. Since our 2021 U.K. launch, we've rapidly expanded. We've grown to 37 restaurants, including 25 new locations in the past two years alone, and we expect to have over 50 restaurants by the end of 2025 through a combination of company and franchisee-owned restaurants. A key driver of the momentum is our Build-to-Suit program, which you've heard about, where Wendy's co-invests with our franchisees in exchange for increased royalties and fees.
The model is removing barriers to entry and enabling faster expansion within key trade areas. The U.K. also is a multi-franchisee market, and all franchisees are actively developing across the country. Many have signed up to build more restaurants, reinforcing their confidence in the brand and contributing to our national advertising fund, which is continuing to grow brand awareness. We've also established a scalable supply chain, transitioning from a U.K.-only model to a fully integrated European model. Finally, our regional headquarters in London and the dedicated support team we have there, they've played a key role in accelerating momentum across Europe. By 2028, you'll find over 150 Wendy's restaurants spread across at least a half dozen countries in Europe. With a strong foundation, proven franchisee commitment, and a scalable infrastructure, Wendy's is positioned to solidify the U.K. as a long-term growth engine while accelerating expansion across Europe.
Latin America is another stronghold for Wendy's, and Mexico is at the center of the expansion. With strong economics, including over 20% restaurant margin, engaged franchisees, and a well-established infrastructure, Mexico serves as the hub for growth across the region. Mexico is a multi-franchisee market, with franchisees fully committed to growth. In 2024, we increased our net unit count by 17% and welcomed several new franchisees to our system. Additionally, our largest franchisee committed to build 25 new restaurants across Guadalajara, further strengthening our presence in the region, and we expect Mexico City to be next. To support this rapid growth, Wendy's has built a foundation for sustained expansion by making key strategic investments. We've invested in local resources to strengthen market execution, including marketing and supply chain. We've approved local suppliers, and we've formed a national distribution partnership.
We have launched a national marketing fund to drive brand awareness. We've also introduced technology upgrades across all of our restaurants, which are enabling digital growth and enhancing the customer experience. Wendy's is well-positioned to lead in Mexico and drive growth across Latin America. The strategy is working, and the opportunities ahead are significant. Before I close, I want to highlight a few key items that will enable our growth, starting with our food and our restaurants. At Wendy's, quality is our recipe, and that's what sets us apart in markets around the world. We offer our core menu, featuring fresh beef in international markets, complemented by locally inspired, craveable foods that elevate our brand. For example, we have introduced high-quality chicken offerings tailored to regional tastes.
This includes bone-in chicken throughout Asia-Pacific and hand-breaded chicken tenders, and they are good, in Australia to meet growing demand for our premium options. In Canada and the U.K., we've introduced innovative frosty offerings like the Frosty Fizz and Frozen Hot Chocolate Frosty, reinforcing Wendy's reputation for craveable, high-quality food that excites customers. To further strengthen our brand presence globally, we've established a global creative fund, and are collaborating with U.S. marketing more than ever to innovate on an even larger scale. But our strategy is not just about better food. It's about better restaurants. While many of our competitors internationally operate outdated and tired locations around the world, we're redefining the experience with our global next-gen restaurant design. This modern approach enhances the customer experience, self-order kiosks, seamless delivery integration, and modern digital enhancements that cater to evolving consumer expectations.
These advancements not only improve convenience, but they also drive greater operational efficiency and profitability. Wendy's is winning globally by delivering what customers want: fresh, famous food and exceptional customer experiences. We also know one size does not fit all when it comes to international expansion. That's why we've developed a flexible real estate strategy that allows us to scale efficiently in diverse markets. We're leveraging a mix of freestanding and inline formats to optimize our footprint and meet demand wherever our customers are. For example, in high-traffic urban areas, inline locations allow us to maximize accessibility in dense areas. While freestanding restaurants, they give us greater brand presence and drive-through capability in markets where the space allows. This adaptable approach enables us to enter new markets with the right asset type for the environment, balancing capital efficiency and strong unit economics.
As we continue to expand, this strategy will be a key driver in helping us scale to 2,000 restaurants. Finally, and importantly, as we've discussed, we're transforming our international supply chain to drive scalable, cost-efficient growth while maintaining our world-class quality. By integrating our international and North American supply chain teams for the very first time, we have unlocked a purchasing power of more than 7,000 restaurants, reducing cost, improving procurement, and streamlining logistics. To strengthen execution, we've made key leadership hires, which enhance our ability to navigate diverse local market dynamics, optimize logistics, and build stronger supplier relationships, and we are also deepening connections with our North America supply chain partners. This includes developing localized supply networks while expanding our existing strategic partnerships across our international business to enhance profitability.
These strategic investments are fueling Wendy's global growth by ensuring efficiency, profitability, and long-term success as a leading international restaurant brand. In summary, Wendy's is poised for accelerated international growth. We plan to expand from 1,300 restaurants today to 2,000 by 2028, while increasing from a 9% CAGR over the last three years to 11%. This is strategic and profitable expansion. Our proven growth model is delivering results. We're scaling rapidly in our stronghold markets across Canada, India, the Middle East, the U.K., and of course, Mexico. With multi-franchise markets, master franchise partnerships, Build-to-Suit programs, and flexible formats, we're removing barriers to entry, increasing speed to market, and strengthening our unit economics. At the same time, we are investing in regional recruiting resources, investing in localized marketing, investing in localized culinary experiences, and investing in a global supply chain that leverages our brand's collective buying power.
With a clear roadmap and strong execution, Wendy's is delivering profitable growth and long-term value, and we're just getting started. I'm going to end with this video. It brings it all together by capturing what makes Wendy's special and why the brand is loved across the globe. Real fans, real moments, and real passion for our fresh, famous food. From frosty lovers in Canada to spicy chicken devotees in Australia, burger enthusiasts in the U.K., to customers in Saudi Arabia, India discovering new menu innovations. You know it, it's got to be Wendy's. Thank you.
That was fun and burger. Something special about me, you can already tell the energy is different. Confidence is at the highest level, I don't ever see it dipping. Try me if you want a guarantee, though you're going to wish you hadn't did it.
That's a war that you can never win, but hey, I like the optimism. Giving over, had my life to this, I think I made it good. My commitment to my menu. Ay, feature presentation when they came to see it, open up the curtain. Oh my! Paint them on the umber, showtime. Oh my God. I know why. Jealous of me 'cause the flow nice. Did it all without a cosign. Shooter always hit the bullseye. Barely even put in effort [crosstalk] . Five for five. And don't forget, four for four [crosstalk]. We hard. And I was cold, and I was waiting. What you think this is? Deadly with the reps. How could you forget? Thought I might have left. Thought I might have quit. Thought I hung it up. Thought I think again. Petty that depends. What's the latest trend? I don't have a clue.
I don't follow them. They just follow me. Keep them on the edge. Keep them on their toes. Keep them wondering. Keep them wanting more. Eating out my head. Wendy's Canada just sent me the best gift ever. I'm literally a human chicken nugget. Never not a chance. Walk you through my pain. Show you who I am. Don't care what it means. I am so excited. Sometimes got so much left to give you. Not a man I was that person. Detrimental. 2020 me could never hold a candle to the present. Damn, you standing here before you overstep. This part you give up can't afford to keep. My standards, I ain't changing that for no one. Digging deep, still got the hunger. Press record, you hear it in my voice. Can't let the fame and fortune get the best. Wendy's. Looking for endorsements. Dropping masterpieces.
Let me not ignore the highlights. Masterpieces. Let me not ignore the highlights. Testing me, passing with flying colors. Always been unique. Can't be no dime a dozen. I take pride in this work. Catch me cleanse. Sharpest in the shed. Pen is cutting edge. I get in the booth. Perfect, nothing less. Key to my success. Keep a level head. We want something fresh. W hat you think this is?
Please welcome Wendy's Chief Financial Officer, Ken Cook.
Hi, good morning. Did everybody like that song?
That's right for my personal playlist.
So, but seriously, that video shows a lot of the exciting things we're doing around the world, and more importantly, shows why we're doing it, our customers. So it's great to be with you here this morning.
As you know, I joined Wendy's at the end of last year, and I'm excited about the tremendous potential for value creation in front of us. I'm focused on ensuring our financial framework supports Wendy's growth and creates value for our customers, our franchisees, and our shareholders. Today, I will bring together what you have heard from Kirk, Lindsay, Abigail, and E.J., and show you how the initiatives they shared contribute to reaching our 2028 financial targets. I'll cover three things with you today. First, our value creation framework and our long-term financial algorithm. Second, our growth targets for 2028 and how our initiatives contribute to growth in both system-wide sales and adjusted EBITDA. And third, I'll share our updated capital allocation policy, including areas where we are investing for growth.
To realize our full potential, we must deliver on the three strategic pillars that Kirk laid out: doubling down on fresh, famous food, delivering an exceptional customer experience every time, and accelerating global unit growth. We are executing on these initiatives with an elevated operational intensity and financial discipline. And we are supporting these growth pillars with investments that strengthen our system, enhance profitability, and deliver returns for our franchisees and shareholders. We know that in order to create value for our shareholders, we first need to create value for our franchisees. And franchisees tell us that the most important thing for them is driving profitable growth. This begins by putting the customer at the center of everything we do, including delivering the highest quality food, impactful innovation, great value, and convenience.
By enhancing the customer experience and driving higher average unit volumes, we will increase overall dollar profit in our restaurants and provide the opportunity to create sales leverage. Additionally, our model of excellence and operational initiatives that Abigail laid out will drive further improvement to restaurant-level margin. And when restaurant profitability improves, franchisees want to build more restaurants, which improves density, increases our overall advertising, and further strengthens our system. And success for franchisees drives success for shareholders. As same restaurant sales increase and franchisees build more restaurants, this powers system-wide sales growth, which generates royalty revenue for shareholders. Increased royalty also provides additional capital to invest in building more restaurants, provides capital to invest in technology that enhances the customer experience and productivity, and to increase investment in menu innovation. Investments like these have attractive returns and result in stronger EBITDA and cash flow generation.
Delivering on this simple yet powerful formula will drive our value creation flywheel and deliver profitable long-term growth. Now let's take a look at our long-term financial algorithm. As we shared on our earnings call last month, 2025 is a building year for Wendy's. We are making the right investments that will enable us to take a big step toward these goals in 2025 and provide the foundation for continued progress in the years ahead. Our long-term algorithm is to achieve 3%-4% annual net unit growth as we expand our footprint and strengthen the overall economics of our system. We have plans to generate system-wide sales growth of 5%-6% a year, driven by the combination of unit expansion and same restaurant sales growth.
Finally, we expect to grow Adjusted EBITDA by 7%-8% a year, reflecting our commitment to improving restaurant profitability and disciplined capital allocation. In addition to providing our long-term growth algorithm, we want to provide you with specific financial targets of where we expect to be in 2028. We see a path to meaningful growth across net units, system-wide sales, and Adjusted EBITDA. Specifically, we anticipate adding 1,000 net new restaurants around the world by 2028 to reach 8,300 restaurants globally at the high end of our range. The combination of net unit growth and improved same restaurant sales growth from our marketing and innovation initiatives are expected to drive system-wide sales of between $17.5 billion and $18 billion.
Finally, we expect Adjusted EBITDA to grow from $544 million in 2024 to $650 million -$700 million in 2028, representing nearly 30% growth from 2024 at the high end of our range. Now let's take a closer look at how the initiatives you've heard today work together to grow system-wide sales from $14.5 billion in 2024 to as high as $18 billion by 2028. System-wide sales growth comes from the combination of net new unit development and growing same restaurant sales. Net unit growth will contribute a little more than half of the increase in system-wide sales in 2028 as we add 1,000 net restaurants to the system. About 70% of these units will come from international, and 30% will come from the United States. Specific to international expansion, as E.J. shared, we plan to accelerate net unit growth to an 11% CAGR between 2024 and 2028.
This growth will come from a combination of stronghold markets like Canada and Mexico, and newer markets like Australia and Ireland. Accelerating net unit development is driven by investing in more local resources for franchise recruiting and support, and strengthening marketing and supply chain execution. We are connecting our international supply chain to our North American supply chain to provide franchisees with even greater scale benefits, while ensuring that our customers around the world can taste the Wendy's difference of the highest quality ingredients in all of QSR. We will continue our mission to be globally great and locally even better, with menu innovation tailored to local customer preferences. Moving to the U.S., we expect to add around 300 net new restaurants over the next four years. As Kirk shared, there's currently one Wendy's for every 56,000 Americans, which means there is significant potential for expansion.
And we are executing on our plans to capitalize on this opportunity. We introduced our next-gen restaurant design in 2023, which can produce better restaurant-level economics by reducing build costs, minimizing the real estate footprint required, and increasing restaurant productivity. Additionally, we are leveraging data to identify high-growth trade areas for development, building company-owned restaurants, and investing with our franchisees through our Build-to-Suit program. We have a winning recipe to drive net restaurant growth around the world. The remaining increase in system-wide sales will be driven by increases in same-restaurant sales. And we expect to generate SRS growth of around 2%-3% a year as we win in the market by executing on our strategic marketing initiatives, innovating our menu, and increasing digital engagement with our customers. As Lindsay shared, our new consumer model allows us to better know and understand our customer.
We are actioning on these insights to leverage our strengths and capture new opportunities with key growth segments. We are expanding the number of collaborations we do, building on the success of the recent SpongeBob promotion. In just the first half of this year, we have the Girl Scouts, Thin Mints Frosty, and Takis collaboration, with even more collaborations to come in the rest of 2025 and beyond. Additionally, we are modernizing our core menu items and launching innovation, including our plans to expand offerings in chicken, beverage, and new Frostys, allowing us to better participate in these segments of the market. We will continue our commitment to using fresh, high-quality, real ingredients to deliver the best tasting food in QSR. For those of you joining us for lunch today at the Restaurant Support Center, you'll get to taste the Wendy's difference for yourself.
And for those of you joining online, I encourage you to take out your phone, open our app, and order Wendy's for lunch so you too can experience the difference. Finally, our focus on operational intensity, supported by additional field resources, will improve the customer experience and further support same restaurant sales growth. All of these initiatives are designed to bring new customers to Wendy's and win in the market by offering the best tasting food in the industry and providing an exceptional customer experience that brings guests back more frequently. Turning to Adjusted EBITDA, we have plans to grow from $544 million in 2024 to $700 million by 2028 at the high end of the range, an increase of more than $150 million. We talked earlier today about the importance of AUVs on restaurant profitability, and it's a similar dynamic with company EBITDA.
The majority of our EBITDA growth will come from the increases in system-wide sales that we just discussed, and while restaurant margin expansion directly accounts for a smaller percentage of our overall EBITDA growth, it is a very important component of unit development as it enhances restaurant-level economics. In addition to sales growth leverage, we have several productivity initiatives already underway as part of the Model of Excellence that Abigail shared with you. We are strengthening our field operations teams to support increased training and accountability using new scorecard assessments to ensure that all restaurants become Model Restaurants that operate the one best way. We're also investing in data collection and analytic tools to more frequently evaluate and benchmark restaurant-level performance through our Model Scorecard and Model P&Ls. We will also leverage technologies to support margin expansion.
This includes transforming the ordering experience through investments in FreshAi and digital menu boards. Additionally, we will use technology to improve labor productivity that allows crews more time to focus on delivering a consistently great customer experience. These initiatives are anticipated to improve restaurant-level margin by over 200 basis points by 2028. Restaurant-level margin expansion will also help fuel franchisee restaurant development through improved profitability and payback periods. Finally, we are focused on scaling the business while maintaining disciplined cost management and keeping G&A below 2% of system-wide sales. Now let's discuss our capital allocation. Our capital allocation strategy is designed to maximize shareholder value by funding the investments needed to execute our strategy and provide attractive capital returns to our shareholders.
Our first priority is to invest in growing our business, particularly by accelerating unit development worldwide and investing in technology that improves both the customer experience and profitability. Second, we are committed to paying an attractive dividend. Third, we will maintain a strong balance sheet, ensuring we have plenty of financial flexibility. And finally, we will utilize share repurchases to return excess cash to our shareholders. Now let's take a deeper look at each of these. Starting with our first priority to invest in the business, we plan to invest an average of $115 million annually in CapEx between 2025 and 2028, representing between 5% and 6% of expected company revenue. Approximately half of these CapEx investments will support faster restaurant development globally. And over the next four years, we plan to open approximately 70 company-owned restaurants.
Around 30% of our CapEx will go towards technology, including digital capabilities with a focus on enhancing our app, deploying self-ordering kiosks, and integrating them with our loyalty platform, digital menu boards with FreshAi ordering. We're investing in data capabilities that provide insights and enhance our business decisions. These technology investments unlock opportunities to improve the customer experience, increase restaurant profitability, and are foundational to the initiatives that we discussed today. These investments are directly tied to achieving our strategic priorities, and our disciplined approach to capital deployment ensures that we are generating attractive returns. In addition to the CapEx investments we are making, I want to discuss how we are increasing our build-to-suit program to support accelerated restaurant development around the globe.
As a reminder, our Build-to-Suit program is one of the incentive programs we offer, where the company co-invests in new restaurants with franchisees in exchange for a higher royalty rate and rent payments. These new franchisee restaurants also contribute to our advertising fund and help us reach new customers. Our Build-to-Suit model will accelerate restaurant expansion in key markets while delivering strong returns and enabling faster payback for the franchisee. It also increases the pool of franchisees available to build more Wendy's restaurants. In 2025, we expect to invest around $70 million in our Build-to-Suit program. After investing in the business, our next priority is paying an attractive dividend. We established a dividend payout ratio of 50%-60% of adjusted earnings. The strong cash flow we generate, combined with this target payout ratio, enables us to invest for growth and provide an attractive dividend for our shareholders.
Our dividend starting in the second quarter of 2025 will be $0.14 per share, subject to board approval, representing a 56% payout ratio. You can expect the dividend to increase with earnings. Next, a strong balance sheet is key to supporting growth while ensuring long-term stability and liquidity. We are committed to maintaining a strong balance sheet. We have established a target net leverage ratio of 3.5x - 5 x our Adjusted EBITDA. We expect to move towards the lower half of that range over the next few years as we pay down our Whole Business Securitization by $20-$30 million a year and increase our Adjusted EBITDA. This level of debt will support maintaining and improving our credit rating and provide long-term financial flexibility. Additionally, we have an attractive maturity schedule with a total of $830 million of debt maturing between 2025 and 2028.
Specifically, we have a $50 million debenture maturing in December of 2025, and we have two tranches of whole business securitizations that mature over the next four years: a $350 million tranche that matures in September of 2026 and a $430 million tranche that matures in March of 2028. We are currently planning to issue $400 million of whole business securitization notes in late 2025 and use those proceeds to pay off the $400 million of debt that matures between now and 2026. Next, we believe that cash belongs to our shareholders, and we will use share repurchases to return excess cash balances. We plan to repurchase at least enough shares to offset dilution each year, and additionally, we will be opportunistic when an attractive opportunity to repurchase our shares exists, like the one we believe exists today.
On our February 13th earnings call, we announced that we were repurchasing up to $200 million of our shares in 2025. We made this decision for two reasons. First, our valuation is very attractive right now compared to both our own history and relative to our peers. And second, we have a high degree of confidence that we will be able to execute on our plans, win in the market, and generate top and bottom line growth that will drive significant shareholder value. Year to date, through yesterday, we have repurchased around $100 million of our shares, and we are continuing to buy. And last but not least, let's talk about an important metric that drives our company's future: free cash flow. The plans we shared with you today translate to significant free cash flow generation.
We anticipate cumulative Free Cash Flow between $1.2 billion -$1.3 billion between 2025 and 2028. To wrap up, I want to reiterate three key takeaways from today's presentations. First, we are well positioned to leverage our strengths. We have exciting innovation on our fresh, famous food with world-class marketing that leverages the power of the Wendy's brand to reach more customers. Second, we have a focused strategy and are changing the way we execute to elevate the customer experience and increase operational intensity. And lastly, we are investing to expand our global footprint and drive profitable growth. I'm confident that we have the right strategy to achieve our full potential. And when it comes to creating value for customers, franchisees, and shareholders, it's got to be Wendy's.
With that, please watch this video and hear what our franchisees think about Wendy's as we reposition the stage, and then we'll begin a Q&A session with the leadership team shortly.
I think the future for Wendy's is so bright. There is forward-thinking. I've been in the business for 28 years, and I've seen the good, the bad, and the ugly. And I can tell you this: we have great things ahead of us. I'm extremely bullish on the Wendy's brand. I'm actually in my fifth development agreement and looking at a sixth. Great leadership, great brand, the best quality. I was a guest before we ever contemplated becoming a franchisee. I love the brand. I think its commitment to quality is so unique. And that commitment shows through every touchpoint while I'm in the restaurants. I'd say in our specific business, it's so exciting right now.
We're about to celebrate our 30th anniversary next year. We also have been growing the last few years and are planning to continue to grow. So it's only looking up. One of the things that I love about this brand is how it is evolving with the need and the generation that we are in. In the old days, we only needed this big property, and we couldn't alternate from that. So what helps us grow today is having that flexibility and fitting our Wendy's brand into all these different locations. We're not going to stop growing. Growth does lots for us, right? It spreads my DNA. It gives people opportunity in my company. It builds cash flow. They are giving incentives for franchisees, newer or old, to expand the footprint in the Canadian market as well as around the globe.
So that definitely helps us to recoup some of our invested capital. The incentives are incredible. It does help us improve our costs, make the model more efficient and more profitable for us. Wendy's is the future, and that's the brand I want to partner with. If everyone's moving in the same direction, that will only benefit everybody. You know, there's the old adage of, like, a rising tide lifts some ships. And we feel like Wendy's is doing so much to rise that tide that we want to be one of those ships that goes with it. Building the trust that they know that if I say, "Hey, we're going to fix this, we're going to do something, we're going to grow," that we do fulfill those promises. I love Wendy's. I love the brand, and I want to continue growing with Wendy's. That's indefinite for me.
Wendy's is a hell of a brand. There's really nothing better out there. I've looked. Believe me, I have seen what else is there. And Wendy's is it.
We're now ready for the question-and-answer session with our senior leadership team. We will answer questions in the room first and try to get to a few online as well. Please raise your hand and wait for the microphone. Also, please state your name and firm. For those online, you can submit questions through the question box on Open Exchange. To allow everyone the opportunity to participate, we ask that you limit yourself to one question. Let's go up here. David.
Thank you. You mentioned that cash flow is important to the franchisees. I wonder where franchisee cash flow is today. Where do you think it needs to get for that unit growth to really accelerate? I'm particularly interested in the U.S.
On that metric, and then you made a mention on chicken improvements. You know, where do you think that, you know, could you add some more color on that? What sort of improvements will you make or can you make? You mentioned the tie-in with Takis, but fundamentally, it sounds like you're going to do things differently with chicken. Thank you.
Okay. That was a good couple of questions there. Thank you very much. Why don't we take that two-part? Let Abigail talk about franchisee financials and cash flow, and then Lindsay can talk about how we're thinking about chicken. It's very important, obviously. We have a really good chicken business. We intend to advance that business and grow that with our customers. But let's get into it.
Yeah, I think first and foremost, I think, David, we agree that cash flow, overall EBITDA, is critical for both the company and the franchise. So it's the magic that gets everything to keep going. And I think you heard me talk about the overall P&L, the Model P&L. That's going to come from a focus on operational excellence. It's going to come from the work on our multi-year margin strategy. And we see that when franchisees are engaging in that, they're seeing success, and they're going to continue to build that. I would also say that the P&L collection platform that we're introducing is going to change the game. So if you think about in the last few years, we've collected financials once a year, and we only collected it at the entity level. Now we're collecting it every month at the restaurant level.
The idea of that level of rigor is going to give us the idea of where that opportunity is. I'll say there's a difference between when you look at the system overall and your question around franchise cash flow. We have franchisees that do a phenomenal job, generate a lot of cash flow, and they're building, and they're growing, and they're reinvesting in their restaurants, and there are others that are not as much. We want to really rise the tide, as George and Dino said in the video. I think that's where we want to go. I think importantly, though, we know that we want to work with them also on everything from financing to how do we be able to help drive their operations and drive profitability. Those are some really important elements that will come in the coming years.
Yeah, and then on chicken, great question. I'd say the chicken formats that we're looking at are things that you're very familiar with. So sandwiches, handheld. What I would share as a data point to really think about how we've approached the work is the iconic sandwich that we've had on our menu in chicken is the spicy chicken. It was introduced in 1995. It was the first spicy chicken on the marketplace. But as we've really looked at the consumer data, what's shocking about that sandwich for us, as we think about the role it should play today, is that the majority of spicy chicken customers are 55 or older. So when I talked about all the audiences where we know growth needs to happen, we had a decision to make.
Do we want to reintroduce them to spicy or introduce them to spicy chicken as it is, or should we be looking at what is the most modern representation of that sandwich today? So that's just one example of the mindset that we're taking as we look at those products.
Let's go up here to Jeff.
Thank you. Jeff Bernstein from Barclays. I have just one question to clarify. So my question,[crosstalk] that's it. It's just one question, one part. And it's related to international unit growth. So I guess it's directed towards E.J. I think you mentioned it's 70% of your growth over the next few years, so 700 of 1,000. You don't have to look very far, perhaps Abigail right next to you, to know that it is very difficult for a newer, younger brand.
While the white space is huge, there's already a lot of competition that's already there, and the challenges over the past many years, I mean, that's really the inhibitor, I think, to your stock valuation, is accelerating that unit growth, which comes from international, so I'm just wondering, what gives you the confidence over the next few years, the fortitude that your franchisees have to have to stick it out when it might not be easy? Your largest QSR peers that grow internationally, and they've all been talking about growing maybe 5% per year. Each one of them has now slowed that rate over the past 12 months, whether it's consumer-led or whether it's franchisees being more cautious, so the idea that their powerful network is slowing gives people pause about the ability this time around for Wendy's to actually accelerate it, especially when it's been difficult in the past.
So just your overall level of confidence that you can achieve that and your visibility on that? Thank you.
Great question. So first, let me talk. I'm extremely confident, and let me tell you what. What's different? First thing is just strategy. We're going to focus on foundational markets. We've already got meaningful presence, places like Canada, Mexico, and the UK. They want to work with franchisee partners who want to grow with us. 70% of our Canadian franchisees are growing. 100% of our UK franchisees are growing. And third, and this is really important, investment. We are going from globally great to locally even better. We're putting resources on the ground in these key markets: marketing, culinary, technology. We're investing in Global Next-Gen, where we have better restaurants. They have freestanding drive-throughs, their inline non-traditional airports, train stations. All of that combined.
And then I don't want to be remiss if I didn't mention supply chain. Supply chain is huge. You go back. We are now going to take all of our 6,000 U.S. restaurants, combine them with our 1,300 international restaurants, and we're going to improve our consistency, our quality, and our cost. So the reason I'm confident is the strategy, the partners, and importantly, the investments. Thanks, Jeff. Jeff, can I add to that? Don't want to break the two-question rule. But when you think about new concepts to these markets, you think new restaurants, highest quality food that has breakthrough. Look, in the U.S., we see new concepts popping up and growing. Wendy's is that new face in those markets. It gives us that advantage, especially when we bring what we bring from a quality standpoint, a new restaurant standpoint, and an experience.
We see breakthrough, and we have enough track record to give us that confidence. So we're really excited about that opportunity.
Dennis in the back.
Great. Thanks, team. I wanted to ask sort of another one on the confidence in the development. Maybe if there's anything on the pipeline, commitments, both on the U.S. side as well as international, that you guys can share. Related to that, just Abigail, you just talked a lot about the cash flow and what's going to drive that. Anything at a high level to share on returns, U.S. international, I'm sure international looks different depending on the market, where you're at, where you want to go with a lot of the initiatives that you talked about, payback periods, and what that journey does for the franchisee demand? Anything there, however you want to take it. Thank you.
Yeah, why don't we break that into two halves? Abigail, we'll start with you. And E.J., you can talk international.
Yeah, I think importantly, we absolutely look at the financials, right? Importantly, a stronger payback with our Global Next-Gen design. You look at also a various portfolio of options around incentives from royalty as well as build-to-suit. And those are all helping franchisees get excited about what they're doing in addition to what they're already developing. So we've been building a pipeline. So this isn't something new. We've been building that pipeline over the last couple of years in the U.S. And now that's really seeing dividends, right, with a higher number of restaurants in 2025 and going forward, and what you heard Ken outline for the four-year algorithm. And importantly, we have fresh new next-generation franchisees coming in with that energy and that excitement.
We also have franchisees who are saying, "Look, I want to build out my geography. I want to build that market plan," and that's importantly supported by not just a hope, but actually a market plan, so I would highlight that we have done some really robust market planning, looking at what is successful for QSR, what is successful for Wendy's consumers, so the work that Lindsay talked about isn't just a marketing strategy. It's actually a development strategy too, so how do we take those target consumers? How do we know where they are? What is that population density? And then we've complemented it with big data and now predictive analytics with AI, so we're not just using AI in our restaurants.
We're now using AI in our predictive analytics for market planning and now saying, "Where can we be most successful in the U.S.?" So that builds confidence, right, with our franchisees who say, "Not only do we have support and the company is side by side with them investing financially, but also I know where to build and where I can see success." So that's what's been driving our pipeline and why we're so confident going forward. The last thing I would just comment is if you look at what's different. What's different from the past also is that, as I mentioned, if you look at all of our major QSR hamburger peers in the U.S., they've been mainly shrinking over the last three to five years.
If you look at where we are, we've now been really replacing old trade areas that are really not relevant anymore and moving and replacing it with strong trade areas and really increasing our above-average unit volume as well when we open those restaurants. Importantly, we see that franchisee health has improved, right? You heard Kirk talk about the improvement of our franchise structure, so that's all complementing where we're going, and I think improving kind of the economics; it's improving the market planning and the recruiting that supports our U.S. development.
Yeah, with respect to international, it starts with our Global Next-Gen design, which is just unbelievably digital-enabled, and it's so flexible that we can go to different markets and put the right asset into the market. And then we're taking build-to-suit, where we're co-investing.
And that's accelerating the growth because we're working with our franchisees with capital, and that's really fueling the growth. And the pipeline is there with franchisees who want to build. So I'm really confident.
Let's go up here to Lauren. No, up here. Up here. [crosstalk] Sorry.
Thank you. Lauren Silberman, Deutsche Bank . I wanted to ask about collaborations. So you have Girl Scouts now, Takis coming. You alluded to some others this year. How are you thinking about the cadence of collabs in one year balancing with the core business and any learnings you can share from the successful SpongeBob collab that's helping to inform your approach?
Yeah, I think this is a great question for Lindsay to talk about. She's the brainchild, her and her team behind the collaborations. And I know you're getting lots of calls.
Yeah, I'd love to talk about it.
Yeah, please do. Please do.
So the cadence for us is really a partnership with Abigail around our restaurants and making sure that we're balancing the enhancements to the core menu that I talked about with chicken and Frosty and beverages sprinkled with collaborations. So I think about collaborations as like the icing on the cake. Like the core business needs to be in a really great spot, and that is our focus. Collaborations I'd think about as maybe quarterly, roughly, just around the pace that we've looked at. We have multiple that we didn't talk about today because we have seen such success in the leak to the consumer, the anticipation and curiosity, us confirming it along the way. And that's been a big part of building consumer demand. So that's why I just comment on cadence and relationship to core. Quickly on learnings from SpongeBob, there were a ton.
The few that I would point to are, one, the level of conversation with consumers on social media is predictive. We're seeing it now within months as well. It is predictive of what traffic looks like day one. So we now have a better approach to prep our supply chain and our restaurants for giving and delivering a great customer experience. We were a little caught off guard at how strong SpongeBob was right out of the gate. So that's a learning that we'll apply going forward. Another is that our restaurant teams, our operators in the restaurant, our register operators, we are building programming for them to get them just as excited about the collaboration as the paying customer. Because then the experience at the restaurant isn't disconnected from the marketing that they see out in the world.
It just feels like a part of that, including packaging, which will be a big part of things like Takis or others as we go forward.
Jake?
Hi. My question was the percentage of Gen X that has heard of Takis. But no, actually, I'll take that. That's not really the question. The question was about the net unit growth target. And one of the pieces of that is closures. And so I'm hoping you can help us understand the expectation for gross openings and then also what the risk of elevated closures. I know there was, in the U.S. especially, acceleration recently should probably decrease the risk of closures. But internationally, there's some legacy markets. It seems like closures, there's more closures there. Is that process kind of done in terms of kind of just reorienting the international approach? So the gross targets and the implications for closures.
Yeah, look, let me start, and maybe Ken can kind of wrap up kind of the gross and net numbers from a closure standpoint. I thought it was really important in 2024 to look at the entire system, look at the health of our restaurants, look at the quality that they deliver to our customers. Again, if we take that customer-first approach, can we deliver that experience in all of our restaurants? Are they performing where we want them to perform? Are they in the right locations? Are they delivering the right profitability? So we took a real detailed look at our system in 2024, and that's why we went ahead and closed roughly 140 restaurants that just weren't meeting our needs and weren't going to deliver to the customer. So that strengthens our future from a net standpoint, for sure. So that's kind of the mentality.
Get the system strong, and then the outlook internationally from a gross and net standpoint. You want to talk about that, Ken?
Yeah, happy to. So in total, if you look back to 2023, we had about 103 restaurant closures in 2023. Obviously, that increased last year based on the initiatives that we undertook in the fourth quarter. I would expect going forward through 2028, expect us to be a little less than we were in 2023. So call it a little fewer than 100 closures a year. 2025 will be a little bit less than that. It'll be a little bit lower. And then get to, call it around 100 closures by 2028. On average, less than 100 closures a year. The rest of that growth comes from new openings.
Let's go to Pete over here.
Great. Thanks, Pete Saleh, BTIG. I wanted to ask about the scorecard and the ranking system that you guys are implementing. After you put this in place, what do you think is going to be the actionable items that you need to lift up that lower quartile? Do you think it's going to be just more labor, change in management? Is it new kitchen equipment? Is it updating technology? What is the driver, do you think, that's going to lead you to increase the performance of that bottom quartile? Thank you.
Well, I love the question, Pete, because it's something I'm pretty passionate about. And that's what I think is new, is so different than what we've done in the past, is we've not only looked at what are the restaurants that succeed and are doing better than everyone else, and we see a profile and criteria that leads to it.
So it's not just measures that I think look good. It's like, no, this drives results. So we've correlated that, and we know what those behaviors are. We know what the performance criteria are. So we have now already started these assessments. So we began these assessments here in just the last couple of months, and we'll be continuing to learn as we go through and set the new standard and set a high standard and expectation. But what we're finding is you can see that, yes, it's never one silver bullet, right? It's multiple things because the restaurant business can come down to ultimately, the general manager is everything, right? You set the culture. You set the idea of who you're hiring. You say, what is my standard on training and what we do to develop?
But I think you're going to see a combination of, yes, it will lead to people saying, do I have the right leader? How do I set the right team? You heard Kirk talk about that on all of us, right? Second is you're going to have, do we have the right training? We've been working with Covey. We've reviewed all of our training and modernized it. So all new technology related to our training rollouts, a whole new view of using our cell phones and our restaurant teams using new technology to be able to have exactly what they need when they need it in terms of technology, not old-school traditional training. So that's a big change. I think you're going to see also with collaboration, Lindsay and I are doing to say, what does it take to have high-quality, fresh, famous food?
And yeah, we need to go and make sure that we have the right restaurant equipment, the right technology. So there are going to be very clear standards, and we'll do that together. I think that's an important thing for all of you to know because you talk to a lot of different competitors. You talk to other brands. Something that's really important to us is our partnership with our franchisees. And we have a really great, strong, constructive, positive relationship with our franchisees, the Wendy's Franchise Association. Lindsay and I talk about with them almost every week and engaging with them. And they're aligned with this new strategy and this new scorecard. And we're going to work together to be able to move the system to the next level and help make everyone more money. Okay.
Let's go to Eric.
Hi, it's Eric Gonzalez with KeyBanc. I also thought the discussion around operations and all the ways that you're looking to improve operational standards across the system and drive margin improvement was really, really interesting. So Abigail, just as it relates to the 200 basis point margin improvement, how does that stage through between now and 2028? Will that be evenly balanced, or should we expect that to be back-end weighted? And I think you said last year you saw 70 basis points of improvement. So is some of that included in last year's number? And then as it relates to the franchisees' P&Ls, should they see the same 200 basis points margin improvement, or are they on a little bit of a lag?
Well, let Ken kind of add some more color in terms of what we think of the overall pacing and sequencing of that. But I would say, one, we're also equally excited about it, and our franchisees are too. And I think what you'll see kind of in the near term is really the work on P&L benchmarking that I mentioned. So we're rolling that out here as we speak. So being able to have the old saying, you manage what you measure, right? You manage what you measure. And so having visibility to restaurant-level P&Ls and balance sheets. So the idea of no surprises. We'll know where leverage is, right? We know where that capital investment can go and how do you have great returns. So I think that's an important part that's near term, right? That's this year that we're going to see a lot of those benefits and building into next year as we do coaching and we build action plans. The second is those productivity upgrades.
And we've role modeled this with the company restaurants. So we're not asking anyone to do anything that we haven't done ourselves, right? So you'll see that this year, next year in terms of really building out those operational efficiencies, productivity, and that work. And then I think you'll see layered on top of that, the labor model evolution and some of the work that we're doing on really modernizing our labor model. And then you heard Lindsay talk about the menu strategy and the work we're doing this year. So you'll see that building momentum over those four years. So I think there won't be any one year that has one thing. You're going to see each of those five strategies building on top of each other and continuing to build confidence, I think, in the economic model.
Yeah, no, I think that's right. In terms of the cadence, we gave a range for U.S. restaurant margin for 2025. At the high end of that range, we called for 50 basis points of expansion this year. That's as we get up to speed on the model of excellence, as we start deploying these resources in the middle of the year, and as we implement new technology like the FreshAi digital menu boards throughout the year. Potentially a little bit of a bigger step up next year until we hit that 18% + margin that we're targeting.
Let's go to Rahul.
Hi, Rahul from J.P. Morgan. Technology has been changing the role of GMs in the store, the staff members, and even your support center staff likely. As you ramp investments in digital, your tech stack, whatnot, how are you and franchises thinking about attracting the best talent out there and retaining them? Because it seems to be very competitive and fast-paced. Can you also detail a bit more about the technology fee and how it can be a critical part of the model going forward as franchises contribute to it?
Yeah, let me take a look at the answer to the talent question. I think this is something that we talk about all the time. We have succession planning. We're hyper-focused on the technology talent that we bring into our organization. We've made significant upgrades in talent across our technology. I think by leading in technology like FreshAi, you attract more talent. People want to be a part of a company that invests in technology. I think that's critical.
So we've seen some success in building this capability, and our team is improving every year. Our benchmark is world-class talent for our technology team. We're on the road to that. I feel very confident about that.
Danielle?
All the hands are up, so it's got a lot of people. [crosstalk] Okay, I have a five-part question. Look, there's a lot of fresh innovation that you have been discussing today. But there is also one big absence in today's conversation if you compare it to the investor day in 2019, which is breakfast. So the question I have is, have you achieved what you intended to achieve on the breakfast category? And as you're shifting the focus perhaps away from the breakfast category, what does that mean in terms of the pace of advertising spend and the innovation on that daypart?
Then finally, I mean, Abigail, you were talking about the criticality for franchisees of achieving high returns. Typically, breakfast is a day part which has some more challenges from a marginal standpoint. As you are planning to expand your partnership with your franchisees, are you contemplating also maybe removing the mandatory breakfast in the morning to allow them to increase their cash flow over the long term? Thank you.
Yeah, let me talk about breakfast from a strategy standpoint, and then I'll let Abigail talk from a franchise standpoint. It's still a key priority of ours. We talked about this at the beginning of the year. Of course, we will launch breakfast in 2020. We've identified what our potential is. If you think about our potential of $6,000 per restaurant per week, we're 3,000. We're about halfway there.
And it continues to be something that grows faster than the rest of our business. So it's been a tailwind, and it's going to be a tailwind for the near future because we're building awareness. We're building momentum by restaurant. And yes, we're tweaking things in the restaurant, understanding the labor model. The food cost is lower for breakfast. So I want to be clear. It is a margin enhancement opportunity for us. So we think that is a potential. We talked about the opportunity to build innovation around beverages for breakfast that will strengthen our breakfast portfolio. We have the best food for breakfast. Did everyone have a Wendy's breakfast this morning? Okay. Did you feel good about it? So I mean, we're very passionate about breakfast. There's so many things to talk about, but we are very passionate about breakfast.
Abigail, why don't you talk about where the franchisees are?
Yeah, I think importantly, first and foremost, the broader franchise system is all in on breakfast. They also know that it's not a one-inning game, right? You've got to be able to compete for the long haul. And you heard Lindsay talk about habit, right? Breakfast is a very habit-driven day part. And so what we have learned is that with the addition of our beverage strategy that's coming, that will be a big enhancement. And franchisees are excited about that. I think ultimately they want to see where is the future vision? Where are we going on our menu strategy, beverage strategy? And that builds excitement and confidence.
The other interesting insight is, as Lindsay and I have looked at this, when we drive promotions with our breakfast, when we have phenomenal operations in those breakfast restaurants, there is an incredible tail, and you bring customers in more often. It's not just a menu strategy. It has to be coupled with an operation strategy, so if you take kind of double down on fresh food with exceptional customer experience, we see restaurants continue to build their breakfast business. We have to be able to have that, and I think so that's why Model of Excellence will help us with breakfast and the rest of day. When franchisees see that success, right, they're going to build, they're going to continue to grow their breakfast business, and they have to own it in their local trade area.
So, driving connection with radio stations and local the police department and the community and engaging. So there has to be not just a national marketing effort. There has to be an ownership of breakfast at the local level. And when you see it, it's really exciting. And so we're in it for the long term.
Let's go over here to Jim.
Jim Salera with Stephens. I wanted to dig in a little bit on the same restaurant sales component of the bridge from where we are today to the longer-term targets, and particularly something, Lindsay, that you touched on in your presentation with the fast food super fans. And I believe you mentioned they have like a 130 times or 130 frequency per year, and about 20 of those are for Wendy's. Are you able to quantify, I guess, one, how many of those super fans are out there?
Two, what share or what the number of frequency that you think Wendy's can have out of that 130 visits? And then three, how do you think about your store footprint as it matches up to where those super fans live? And is there an opportunity to kind of right-size the store footprint domestically so that you have a lot of overlap with where those fans are?
Okay, so let's tackle this two ways.
Have you worked in a marketing department at Wendy's? If you have.
Well, I have Lindsay talk the customer and the dynamics around the customer, and I'll have Ken talk about the dynamics and the composition of SRS growth, okay?
Yeah, so I'm glad you took good notes on all the numbers. We have created our own custom definition of a fast food super fan who is very frequent in the category and very frequent at Wendy's. Because for the things our team is focused on, I don't want footprint to be like, footprint shouldn't matter. We want to make sure that in the trade areas where we are, we're winning our fair share. So on purpose, we took out maybe some customers in that definition who don't have a Wendy's in their nearby vicinity. So it's specific, like that is removed. We can talk about that as we build more restaurants and how that will help. As we look at that, we've been able to understand that customer's day part behavior at our brand and competitors' product preferences that are driving some of that behavior, basket size, like what they spend with Wendy's compared to others.
And all of that's helping define which areas of the menu we prioritize to do our work on first, and then the balance of marketing support across the craveable core menu, innovation, value, and across day parts. So it's definitely a big part of this analytical model around the consumer that's helping shape the decisions we make as we prioritize menu and marketing initiatives. And I do have a lot of confidence as you look at the gap that we have, the 110 visits that are up for grabs, that we have a right to win on some of those. I know we do based on the quality of our food.
And when we're at our best, as we look at the restaurants that have really high AUVs and they're more than their fair share of traffic within a trade area, it gives us all the promise to believe that we can close a lot of that gap and drive SRS.
Yeah, and in terms of the composition of SRS as we look forward, we think it's going to come from both traffic growth and increases in average check. Now, probably a little more check than traffic, but we plan on seeing positive numbers for both of those. And when you think about average check, think about a lot of the things that we've talked about today that we are really excited about. So collaborations. Collaborations tend to have a much higher than average typical check. We saw that in SpongeBob. We expect to see that in Takis.
More of those drive-thru checks, even if price doesn't change at all. And then we talked a lot about the FreshAi digital menu boards. One of the benefits of those is we do tend to see pretty good check uplift when we install those. So that's what we're seeing so far. We'll roll those out across the system, all company and restaurants by the end of 2025, and expect that to contribute to increases in average check as well.
Greg?
Thank you. I just wanted to follow up on Rahul's question on the tech stack. And some of your larger peers have been bringing more of the capabilities in-house, and some of them actually have not. And it's been kind of a pretty clear delineation in the industry. I guess, how would you characterize your differentiation maybe with the Google partnership and the Palantir partnership?
What advantage does that give you maybe over some of your peers? And then I have a second question that kind of fits into this. You have 200 million customers. I think it's 45 million or so on the loyalty program. How much data are you able to collect on the 150 million customers outside the loyalty program? And how important do you view that as kind of driving sales going forward?
Thanks. Yeah, that's a great three-part question. Now, from a technology partnership standpoint versus internal, look, a lot of things that we're doing internal, but I want to talk about the partnerships with Palantir and Google. When you think about first mover advantage in an area like the partnership that we have with Google, it gives us the opportunity to make that ours, right?
Customize that experience for Wendy's and make it, I mean, I think that's kind of the value of those kind of partnerships and partnering with Palantir as well. It's like, how do we get in front of and create that first mover advantage? For a size of a company of Wendy's, I think partnerships are important. I think also when we have opportunities to build business insights, a lot of that stuff is done internally. When you think about the world of consumer data, what we capture from our registers, from our loyalty data to credit card data, we look at all those aspects to channel our insights for where consumers are, what consumers are doing, and how we make decisions against those. It can't just be one source, right?
You can't just fall in love with the loyalty, the 46 million, or our transaction data, or overall credit card data. You need all those resources to create that ecosystem so that we can make the right decisions for where we want to go. Decisions like where we build a restaurant, what's happening with competition is very important to us. We're very competitive. We're constantly looking at what's happening in the marketplace. So we have to access information from multiple areas. We bring that in, synthesize that data, and make decisions based on it.
Sara?
Thanks, Sara Senatore, Bank of America. Abigail, can we go back to the idea of the importance of operations? One of your big competitors actually called out operational improvements as a top-line driver. I think they've ascribed as much as a third or half of some quarter same-store sales to that.
So I guess I wanted to ask about whether that is also the case as you look at these quartiles. Do you see differences in performance around operations too? And maybe that's something that you can quantify a little bit for me. And then I do have one follow-up.
Well, Sara, it's great to see you, and thanks for the question. I think, yes, we see a difference. So when we take this is a new standard, so we're early in the journey. But when we see the best of the best restaurants, we do see an increase in frequency, and we see an increase in visits. So customer counts, weekly customer counts grow week over week over week when you see great operations. I mean, think about it in layman's terms.
When you know you can count on a restaurant when you're going through the drive-thru, when you know you can count on the delivery to being just right, when you count on going into the dining room with your family. I know I'm bringing my kids, and I'm like, "Look, don't mess it up. I only have so much time," right? So it's just, for me, that's absolutely seen in the data that you can see a driving of top line and better sales flow through, right, and leverage to be able to drive bottom line. So it is absolutely there. In terms of the quantification, I think we'll look forward to sharing more with you over time as we build this new standard and we build the performance reporting here over the spring, and as we are making the changes in the field organization that I mentioned.
So we're in the midst right now of hiring new field operations managers and those elevated business leaders and putting that all into place here by the spring. So I think we're excited to be able to then have a multiplier to be able to go faster and can bring that data to you. But we see it in what we're looking to so far, and we're excited about it. Sorry. I did have a follow-up. I see that—so just a clarification, actually. The Build-to-Suit, I guess, isn't that something that landlords have been doing for your franchisees? And I guess what's the distinction here between what you're offering versus what they can get in just the general real estate market?
Yeah, I guess a couple of things we really like about the Build-to-Suit program. So number one, it provides attractive double-digit returns to the company. So we like that, creates shareholder value. Second, it helps us accelerate the development of new restaurants, which is obviously a core strategic pillar that we're looking to execute on over the next several years. And it enables more franchisees to come into the system because it requires less of an upfront investment from them. The company co-invests with them, lowering those barriers to entry. So it is really geared towards smaller franchisees, getting them into the system, and then enabling them to grow with us. And it also allows us to move faster too when we identify good opportunities.
Okay, Brian up front here.
Thanks. Brian Harbour from Morgan Stanley. I had a question about sort of the operations topic too. So adding field operations staff, is that mainly about kind of visiting restaurants? Is there anything else that was sort of a gap in the past? And I guess what was sort of the driver of that? And I guess also, to some extent, sort of adding the reporting that you spoke about, like maybe it's sort of an offset to that, right? Kind of tech tools can help field ops people be more efficient in kind of monitoring the whole system. I mean, to what extent is that sort of an offset, or to what extent does it limit how many people you have to hire and kind of expand their capabilities?
Yeah, let me just start, and then obviously, Abigail has got this and is incredibly passionate about it. When you think about the experience that we want to have for a customer and the operational excellence that we deliver against that, there's two things.
Absolutely, there's technology and tools, and Abigail's team is leveraging those things. But there is no substitute for being in a restaurant in our business and making that roll up the sleeves, coaching, training, and inspecting what we expect. Nothing is going to change until we dramatically influence that, coupled with the scorecards. But some of the details about that are critical, and Abigail has been leading that.
Yeah, I agree with Kirk. I think that's true operations is being in the restaurants. You see behaviors, you see leadership, you see what you need to do to provide support. I think the big thing I would share is what's different, what's new, and I think that when I came into the role last summer, I looked at how often were our restaurant teams being visited.
And I'll tell you, it was actually only a small percentage of our restaurants that were visited. So I go, we'll say we need to move from some support for some now to moving from some for all. And then how do we have even more support for some? So how do we make sure we're focused in a targeted way that every restaurant is going to get visited at least twice a year, right? Every restaurant twice a year. That's different than what has been. The second is how do we really provide where the restaurants need it most, the targeted coaching so that you can build that action plan? And this is not like, "I'll meet you next year." This is like, "Let me meet you next quarter." And by the way, I'm expecting to see great improvement in these three measures.
And not just doing that, but working side by side with our franchise partners. And by the way, this is for company restaurants too. This is not unique to just franchise. This is company and franchise. How do we do side-by-side coaching and training and development so that they can make that improvement? And I think they'll see that, then they can start seeing the rewards of that performance and be able to drive it. And I think the technology actually allows us to even get more restaurant visits because they're going to have that data right at their fingertips.
Andrew?
Hi, Andrew Strelzik, BMO. You talked about 2025 being limited a bit by closures and then some of the investments. Do you expect to realign with the algo starting in 2026, or to get to those 28 targets? Is it a bit more 27-28 heavy?
Yeah, we expect to hit those long-term targets in the next couple of years. So obviously, 2025 is a building year for us. We are taking a big step toward hitting those goals. For example, new unit development. So new unit development going from kind of sub 2% for the last probably 10 years or 15 years, 0% in 2024, taking a big step higher to 2%-3% in 2025. And we would expect to build on that as we move forward. So we expect to be in that long-term target range over the next couple of years. We also wanted to provide you with 2028 targets so you can see exactly kind of what those figures are both between 2024 and 2028. And we've given you 2025 guidance so you can kind of look at where we expect to be 2026 through 2028.
Yeah.
Christine?
Thank you, Christine from Goldman Sachs. Thank you. Lindsay, I think you shared some really interesting stats on the consumer profile, highlighting families, Hispanics, and Gen Zs as a major traffic contributor. So first of all, how does it look like if you look at their contributions to incremental growth in the recent years? And also, how does your own guest composition look like? So here, I wanted to gauge that opportunity set going forward. And finally, if you can tie it in with your digital and loyalty strategy, that would be amazing. Thank you.
So the question earlier about the superfan and number of visits, as we look at who superfans are, the three growth audiences represent two-thirds of the superfans. So there's a ton of overlap, which was very intentional. Those three audiences with families, Hispanics, and Gen Z, that's where growth is as we look at the next couple of years based on the last few years and the trend. For us, families is an area where we have lost just a little bit of ground in the last few years, and we know that those folks are in the category a lot. I shared 35%. As we do things, it's not just kids' meals that attract families. I think sometimes that's been a fairly maybe narrow definition by all of us in the category. Collaborations play a huge role. That's a part of why, as we look at that consumer group, there's a bit of a shift in the makeup of our marketing plans and calendar as we go forward. Same thing with the Thin Mints Frosty Adventure game.
Last week, my kids were showing me how to move all the pipes to connect them. I could not figure it out on my own, and the team was making fun of me. But you're right. Digital is about the parents in that instance, not the kids. But creating a moment that families can share around Wendy's and a Wendy's product is how we build brand love. And you'll see more examples of that as we bring marketing programs forward.
Jim?
Hey, thanks for the question. Jim Sanderson of North Coast Research. I wanted to go back to technology and try to understand how confident you are that U.S. franchisees will be able to deploy capital to implement some of the drive-through technologies, the digital menu boards, and how much of a role that plays in the same-store sales guidance through 2028.
Okay, look, I think that's a great question for Abigail to talk about. She's been working with our franchisees on our technology and implementation and, of course, modeling the way with our own restaurants.
Well, I think importantly, that's where we're role modeling. So I'll start there. We are role modeling. We're showing how it's done, and we're also engaging with early adopters. So if you think about actually in the past with Wendy's, where we've done this really successfully, is image activation. I think about, I shared 90% where we are, and now we're going to be nearly done at the end of the year. We did that in the early days of role modeling and working side by side with franchisees to really figure out the economics, figure out the investment model.
And we're doing the same thing with digital menu boards, kiosks, and what we're doing on technology. We have a technology advisory committee that works with Matt Spessard, our CIO, and they are working with us on, for example, the alignment to get the modern tech stack installed by the end of this year. So that's our first big milestone is to get that done in 2025. And we have great collaboration with our Wendy's Franchise Association to do that. And now we're looking at what can we do to be able to accelerate with franchise early adopters. And so we're working with them on everything from financing programs to how do we fund the investments. And looking at it importantly in the context of the broader capital plan. You can't look at it in isolation, right, technology.
And so we have to look at that across what we want them to do around building new restaurants, investing in their current operations, and technology. So know it's strategic and it's holistic.
Okay. I can't hear.
Yeah, so it would be included in the same-store sales long-term algorithm. 2%-3% would include all the collaborations and menu innovations that we talked about. It would include the customer experience enhancements that Abigail shared and driving that frequency. And it would also include the benefit we expect to get from technology deploying first at our company restaurants by the end of the year and then rolling out more broadly to the franchise system over the next few years.
Okay.
That's all the time we have for questions right now. Thanks for all the great questions. I'm going to turn it back over to Kirk for a few closing comments.
Yeah, thank you so much. Thanks again for being here. If I think and reflect on the questions you've asked and the content that we've delivered, I think about three things. One, what's different about Wendy's, right? What will be different? Many of you have asked me this question. I would look to the investments that we're making. So the investments that we're making in field resources and operational excellence deliver that customer experience. That first block, delivering customer experience, we've had a lot of great questions about doing that. So we're making critical investments in that along with processes and structural changes. Second, I think about the investment that we have in development. Development is critical. We've talked about build-to-suit. We've talked about leading the way with our company restaurants, and we've talked about international. So we'll invest in that. Last, we've had a lot of questions about technology.
We want to lead in technology and leverage technology to drive efficiency, drive our sales volume, enhance the customer experience. Building out this technology ecosystem with top talent in the marketplace is critical. So those are our three investments. And I would point to those investments as what's different at Wendy's. I want to thank you again for being here with us. For those that are here, so stay tuned. We're going to take you and again share the innovation, the food. There's a lot of food, so we want to have an amount of time to share that with you. We'll also share with you the technology that we have. So let's bring the webcast to a close. And to those who joined us live on a webcast, thank you very much. We're going to close down the webcast.
Okay, now for you that are here, there's a digital experience outside, so you get to do a walkthrough, not a drive-through. Don't bring your cars in here. A walkthrough experience with our digital AI. We also have kiosks for you to play around with in the cafeteria.