Reasons to believe and worry; In Line

Research evidence excerpt

Reasons to believe and worry; In Line

ranchisee profit pressure, and a more

measured ramp in US SSS as Project Fresh benefits build.

Marketing: focusing on brand essence with new media agency

Ad fund dollars are being reallocated from local to national. Even if the gross franchiseeA new media agency,

contribution rate is unchanged, the effective national fund as a percentage of system sales hasmore evenly spread

stepped up, giving Wendy’s marketing more firepower behind brand essence, Spicy Chicken,marketing cadence with

Minions, and the Pretzel Bacon Pub relaunch. We view this as an under-the-radar 2H tailwindgreater national weight,

that also helps explain management's confidence in the back-half ramp.and a brand essence

framework supports Wendy’s is changing media agencies for the first time in 18 years, with the transition fully

accelerating 2H SSS complete by 3Q. Combined with the customer segmentation work completed at the end of 2025

and the new brand essence framework, this is the first time in years the company has had a

structurally upgraded marketing apparatus. Additionally, 2025 national media spend was very

front-loaded; 2026 dollars are evenly spread throughout the year, meaning 1H YoY national

media is still down, but 2H is meaningfully up YoY.

Innovation pipeline is finally getting interesting

Rolled out at end of 1Q the new Spicy Chicken Sandwich features a new marinade, panko

breading with nine spices, new buns, and updated toppings. Spicy Chicken has been a 30-year

brand staple but has lost relevance; we believe a credible relaunch with new bun and quality

positioning could re-establish chicken as a sustained traffic driver. Paired with new buns and

upgraded condiments across the core hamburger lineup, the quality story extends beyond just