The Dublin, Ohio-based citizens chain desires to include another 1,000 locations by 2020, executives told investors on Thursday. One strategy the company plans to usage to encourage that development is a new, much more flexible architecture that will enable Wendy’s to get in smaller spaces.

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Traditionally, the quick-service chain essential at least an acre of actual estate to construct its traditional, independent units. However its brand-new “smart design” can get in much smaller sized spaces, said Abigail Pringle, Wendy’s chief development officer.

“The new designs permit the firm to build on half an acre or also a quarter of an acre if needed,” Pringle said.

Wendy’s at this time has just an ext than 6,500 places worldwide. It wants to thrive to 7,500 units by 2020. The places would it is in both in phibìc America, where the brand has actually commitments from operator to construct at least 500 locations, and also internationally — where Wendy’s desires to flourish from 439 places now come 850 units.

Traditional sites room more challenging to open since real heritage is an ext challenged this particular day than it to be a decade ago. One-acre sites in high-traffic locations don’t exactly grow top top trees. And also when castle come along, they deserve to be expensive.

The new design, executives said, is $300,000 cheaper than a timeless site.

That’s no the just strategy the firm is using to expand add locations. Wendy’s is additionally adapting to urban areas.

“We room looking far past suburban markets,” Pringle said.

And the agency is additionally looking in ~ co-developing through convenience stores and other actual estate opportunities, such as inline sites and also strip-center end caps. And the company wants to convert vacated buildings — and not simply restaurants.

One counter opportunity, Pringle said, is banks.

“The genuine estate marketing is changing,” she said. “Banks space going less with bricks and also mortar. And also they currently have a drive-thru.”

Wendy’s debated its long-term strategy through investors ~ above the same day the preannounced earnings for the 4th quarter ended Jan. 1. The company said same-store sales increased 0.8 percent in the quarter and also 1.6 percent because that the full year in phibìc America.

Revenue in the quarter fell 33 percent, come $309.9 million, in the quarter, from $464.4 million, due to lost sales native the sale of restaurants come franchisees. Network income additionally fell, come $28.9 million, or 11 cents per share, indigenous $85.9 million, or 31 cents per share.

Executives at the presentation stated they want to rise profitability in addition to adding new locations. Part profitability will certainly come native reductions in general and administrative spending. Wendy’s claimed it wants to cut one more $35 million from G&A spending by 2020.

“We’re cursed to increasing savings,” Penegor said, return he detailed that the firm is currently emerging plans to reduced those costs.

Wendy’s said Thursday the it included 58 brand-new restaurants an international in 2016.

“That was the highest an international total because 2005,” Penegor said.

To obtain operators come build brand-new locations, Wendy’s isn’t just using a smaller design. It’s additionally offering incentives.

In past years, Wendy’s would give operators building brand-new units a 2-percent nobility abatement for the brand-new unit for 3 years. Currently the company will reduce costs by 5.5 percent in the very first year the place is open, consisting of a 2-percent nobility discount and also a 3.5-percent advertisement fund discount

The abatement is reduced to 4 percent in the 2nd year, consisting of 1 percent on aristocracy payments and also 3 percent on ad fund payments.

“This is around driving net new incremental growth,” Pringle said, noting that the agency is leveraging its ad fund payment to journey growth. “After year two, there’s much more money into the ad budget the was not there before.”

Wendy’s has likewise used that is refranchising deals, and also even franchisee-to-franchisee sales, come convince operator to include locations.

The chain has actually sold much more than 1,000 locations to franchisees since 2013, following the revenue of 537 areas in the third phase of that effort. Wendy’s has decreased its company-owned unit counting from 1,427 places in 2012, or 22 percent that the system, come 330 units now, or 5 percent.

The company has sold countless of these locations to operator willing come build brand-new locations.

“We wanted to focus on growth,” Wendy’s CEO Todd Penegor said. “We’re happen in solid operators with strong balance sheets and with commitments to thrive the system.”

Wendy’s likewise has a “buy-and-flip” strategy, in which it directs the transfer of franchisee-owned locations to preapproved operators willing come remodel locations and also build new units.

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“We room the ones playing matchmaker,” Pringle said. “We’re analyzing existing franchisees interested in top the system. We want to job-related with lock to uncover the best buyers.”

As part of these strategies, Wendy’s now has actually fewer, bigger franchisees. In 2012, the agency had 440 franchise companies. Now it has 375. The average size of a franchisee has increased indigenous 11 places to 15 units.

“Some larger franchise operators have used the opportunity to consolidate the market,” Penegor said. “They want to regulate pricing, advertising, they wanted to control development and castle didn’t want to encroach on who else. We have a healthy franchise community.”