Ladies and gentlemen, thank you for standing by. Welcome to The Wendy's Company Earnings Results Conference Call. I will now turn the conference over to Greg Lemenchick, Director, Investor Relations. Please go ahead, sir.

Thank you, and good morning, everyone. Today's conference call and webcast includes a PowerPoint presentation, which is available on the Investors section of our website www.wendys.com. Before we begin please take note of the Safe Harbor statement that appears at the end of our earnings release. This disclosure reminds investors that certain information we may discuss today is forward-looking. 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 such as adjusted revenue, adjusted EBITDA, adjusted EBITDA margin, adjusted earnings per share, adjusted tax rate, free cash flow, and systemwide sales. Investors should refer to our reconciliations of non-GAAP financial measures to the most directly comparable GAAP measure. Our conference call today will provide an update on key initiatives from our President and Chief Executive Officer, Todd Penegor; and a review of our preliminary fourth quarter and full-year 2018 results, as well as our 2019 outlook from our Chief Financial Officer, Gunther Plosch. From there, we will open up the line for questions. With that, I'll hand things over to Todd.

Thanks, Greg, and good morning, everyone. I'd like to open today's remarks with The Wendy's vision as it is important to remember that our goal is to become the world's most thriving and beloved restaurant brand. Everything we do at Wendy's needs to ladder up to this vision to build an even stronger brand. Our vision is powerful and you will see throughout our remarks today that we are becoming more focused and in turn setup for sustained long-term growth that will help us achieve our vision. Before we dive into 2019, let's begin with a few highlights from 2018. We demonstrated that we are an efficient growth company that is showcasing meaningful systemwide sales growth of 2.5% on the backdrop of same-restaurant sales growth and global restaurant expansion which is translating into significant free cash flow generation. We achieved strong financial results with 7% adjusted EBITDA growth, 51% adjusted EPS growth, and a 37% increase in our free cash flows which is a testament to our resilient business model. And finally, as you know, we monetized our Inspire Brands' ownership interest in August for $450 million before tax and approximately $350 million after-tax. With this additional cash, as well as our strong free cash flow generation, we were able to return approximately $350 million to shareholders in the way of share repurchases and dividends. I quickly want to spend some time on the consistency of our growth over the last several years. I'm proud to say that we have achieved our eighth consecutive year of North American same-restaurant sales growth which is a streak we plan on keeping alive in 2019 and beyond. Throughout 2018, we focused on retaining and growing our customer base and this strategy was successful. As a result, we continue to grow our traffic share in the QSR Burger category which is something we have accomplished over the last three years. As we move into 2019, we are partnering with our franchisees to ensure we are providing consumers with promotions that continue to bring them into our restaurants more often that are operationally sound and are profitable. We believe that QSR is the place to be with more than 80% of all restaurant visits and that we are well positioned to win now and over the long-term, as we can deliver on the consumer need for speed, convenience, and affordability, while separating ourselves with quality. With that, I will now hand things over to GP who will provide more details on our 2018 results.

Thanks, Todd. As a reminder, we will be discussing all results versus the prior year on a recast basis, which is inclusive of the impact of revenue recognition and other P&L reclassifications. Please refer to the tables in the back of our earnings release for a reconciliation of these recast financial statements. In the fourth quarter of 2018, we ran $1 Any Size Fry offering throughout the majority of the quarter, pairing it with two premium limited time offers, the S'Awesome Bacon Cheeseburger and the Bacon Maple Chicken Sandwich. While our high-low offerings in the fourth quarter drove positive same-restaurant sales, they did not create the sales and profitability we had planned due to lower mix benefit. Adjusted revenues increased by 4.4%. This was driven by an increase in company restaurant sales due to the company acquiring 16 restaurants in the Columbus market as part of our ongoing system optimization strategy, and a 1.2% increase in company same-restaurant sales, in addition to increased franchise royalties. The year-over-year company restaurant margin decreased 60 basis points to 16% driven by labor rate inflation and higher promotional activity that drove a lower average check. This was partially offset by pricing actions. We recorded a $27.5 million legal reserve in the fourth quarter of 2018 relating to the previously announced settlement of the financial institution case which impacted our G&A. Excluding this reserve, G&A was $44 million compared to $51 million in 2017. This decrease was primarily the result of the lower incentive compensation accrual and lower salaries and benefits as a result of the company's G&A savings initiative. Adjusted EBITDA grew by 10% to $107.8 million and adjusted EBITDA margin expanded by 160 basis points. Adjusted earnings per share increased by 78% to $0.16 in quarter four versus the prior year of $0.09. Moving on to our full-year financial results. Adjusted revenues increased by 4.7%. This was driven by an increase in company restaurant sales due to company acquisitions and a 1.3% increase in same-restaurant sales. Also contributing to the growth was an increase in franchise royalties as well as an increase in rental revenue. Year-over-year, company restaurant margin decreased 100 basis points to 15.8% driven by labor rate inflation, commodity inflation, and high insurance cost, partially offset by pricing actions. G&A expense was $190 million compared to $204 million in 2017 excluding the previously mentioned legal reserve. This 7% decrease was primarily the result of the lower incentive compensation accrual and lower salaries and benefits as a result of the company's G&A savings initiative. We had strong adjusted EBITDA growth of 7% in 2018 as we continue to showcase the resiliency of our business model. We benefited from our ongoing G&A savings initiative and a lower incentive compensation accrual, net rental income, and increased royalties due to positive same-restaurant sales and new restaurant development. Adjusted earnings per share increased significantly to $0.59, which was an increase of 51%. This was driven primarily from the positive impact of the lower tax rate from the U.S. Tax Law changes and the benefit from stock options activity, an increase in adjusted EBITDA and fewer shares outstanding as a result of the company's share repurchase programs. Now moving on to some details around our strong free cash flow growth in 2018. Our hard work to drive cash flows is paying off as we delivered strong free cash flow growth of 37% compared to 2017. The increase was driven by the favorable impact from our core working capital initiative, cash taxes primarily from the U.S. Tax Law changes, lower capital, and our core earnings growth. This was partially offset by the cash impact related to our G&A savings initiative. With that, I will pass things back over to Todd to talk about our 2019 strategic initiatives.

Thanks, GP. We are proud of the progress we made in 2018 and over the last several years to strengthen our brand by ensuring more customers enjoy Wendy's more often by expanding our number of restaurants, re-imaging existing restaurants, and executing a well-balanced marketing approach. In 2019, we will continue to strengthen and build the foundation of the brand in partnership with our franchisees to bring our growth formula to life. Our formula is very simple, accelerate same-restaurant sales in North America and drive global restaurant expansion with a strong restaurant economic model to fuel this growth. With organic same-restaurant sales at the forefront to drive a healthy restaurant economic model, which is job one, we will evolve our marketing tactics to drive better mix benefits, we will drive operational excellence, and we will further invest in our digital capabilities. Accelerating the pace at which we open restaurants around the globe to give folks more access to our brand is vital to our growth story, and we have now delivered three consecutive years of net new unit growth. We will continue to accelerate in North America, and on the international front, we will focus on building a stronger foundation in 2019 under new leadership that we believe will pay dividends in the long run. I will walk you through the building blocks on how we plan to accelerate North America same-restaurant sales in 2019. As I mentioned earlier, we already have the benefit of customers coming into our restaurants. So we are starting from a good place. Our one more visit, one more dollar approach will be our focal point and you've already seen this start to come to life. This strategy creates a platform to capitalize on our mix opportunity which will drive an acceleration of same-restaurant sales. The introduction of the "Made to Crave" Hamburger line in February and the $5 Giant JBC that ran in January are examples of this. Our "Made to Crave" innovation which features three new to the menu sandwiches is the most significant change to our premium menu in more than a decade. We are very excited to expand our line-up to cater to the different tastes of today's consumer with a continued focus on our fresh never frozen beef quality. We continue to partner with our franchisees to ensure we are providing customers with promotions and offers that bring them into our restaurants more often that are operationally sound and that are profitable. Building on our progress the last few years, we are working to take our operational excellence across the system to another level to drive a more consistent customer experience that will allow our brand to standout versus our peers. Under Bob Wright's leadership, we now have a dedicated leader in place to oversee our company restaurant operations. We have always said that we like having skin in the game, so our company portfolio can be the brand steward for our franchise system. With this dedicated focus, we plan to accelerate leadership through our restaurant performance and set the pace for the system and operational excellence in 2019 and beyond. Our vision says it all. Delight every customer. Consistency is critical for us to win. We have a keen focus in 2019 to have a more consistent experience for our customers, so they will want to keep coming back and we have provided the system the training and the tools to bring this to life. We also see speed and throughput as an opportunity and we are working on several initiatives in our restaurants that will help drive this. Lastly, making our restaurants easier to operate is a major focus and will go a long way in supporting these goals. We have made meaningful progress over the last couple of years with our consumer facing digital capabilities. We launched Unified Wendy's app initiated the rollout of mobile ordering, began using mobile offers, and have rolled out delivery to 60% of the North America system. As you saw in the release this morning, we plan to invest an incremental $25 million to build a stronger foundation across our digital platforms with a heightened sense of urgency moving forward. As part of this investment, we will stand up our digital experience organization in 2019, which will be led by Laura Titus who has recently joined our Senior Leadership Team. Laura reports to Kurt Kane to ensure that our digital and marketing efforts are fully tied together with a consumer driven point of view. As part of this new organization, we have also engaged Accenture to leverage their best-in-class expertise and we will be partnering with them to drive acceleration in this space. The structure we have created will allow us to flex capacity and capabilities as needed. We are also making technology equipment investments in digital scanners on behalf of the North American system that will provide many benefits such as increased throughput in our restaurants as well as better access to consumer insights to support our digital initiatives. We believe that being successful in digital will be a competitive advantage for us as consumers are craving customization, speed, and convenience all of which can be enhanced through our platforms. GP will provide more clarity later in the presentation on how these investments are impacting our financial outlook for 2019. We will continue our app acquisition strategy to drive more app downloads and increase our number of monthly active users through our mobile offers. We have also enhanced the customer experience in the app by making it more user-friendly and easier to navigate and consumers have been giving us positive feedback on these changes. We have begun rolling mobile ordering out in our U.S. restaurants and we expect to have it activated across the U.S. system by the end of 2019. It is critical to have scale in order to create awareness and we plan to start doing that this year. Having the system live with mobile ordering will allow us to begin to build a one-to-one relationship with our customers, which is the ultimate goal. Expansion of our delivery footprint with DoorDash and SkipTheDishes paced ahead of our expectations in 2018. We have grown our delivery footprint to 60% coverage in North America and are expecting to grow this to 80% with our partners by the end of 2019. We will continue to drive more awareness through our advertising efforts and our partners are doing the same as many consumers still don't know that we offer delivery. Getting this to scale will allow us to fully understand what the potential of delivery could be in the long run. Now let's go deeper into our focus on accelerating our global restaurant footprint. On a global basis, we grew our footprint by approximately 1.2% in 2018 resulting in three consecutive years of global restaurant expansion. We expect our growth to reaccelerate in 2019 to approximately 1.5% with about one-third coming from international and two-thirds from North America. You can expect the pacing of openings in 2019 by quarter to be similar to the cadence we had in 2018. Let's now dive into North American Development, where we continue to make great progress. We are pleased with our 2018 North American Development results as we came in at our expectations growing by about 1%. Our groundbreaker incentive program is off to a great start signing up incremental development commitments as franchisee engagement continues to increase. These new restaurants are coming from a mix of franchisees of all sizes including first time builders who did not have a development agreement previously as well as experienced developers signing up for incremental restaurants on top of their original commitments. This is very encouraging as we look at new restaurant development in 2019 and beyond behind a strong pipeline. Our Smart family of designs remain focused on lowering the investment cost of new restaurants while creating a relevant customer experience. We now have investment options ranging from $1.4 million to $2 million to fit all trade areas and sales volumes. The lower investment options along with our best-in-class incentive program has created a compelling economic proposition that has driven excitement across the system. Our franchisees dedication and commitment to growth gives us confidence as we look to accelerate again in 2019 in our quest to provide more access to the brand. Growing our international business is critical to our long-term growth and we are gaining momentum under Abigail Pringle's leadership. Let's start with some highlights from 2018. International system-wide sales grew 13% mainly due to new restaurant development but also healthy same-restaurant sales growth. We did miss our net restaurant goal by growing about 6% due to some franchisee transitions and the timing of opening shifting into 2019. As we look towards the future, the global development team is re-examining our plans to ensure we are building a stronger foundation to support sustainable long-term growth. Over the first few months of Abigail's tenure, she has reorganized the team and added new talent to unlock significant growth in the future by thinking differently. This team will leverage the North American playbook that has been highly successful over the last five years to bring best practices in areas such as franchisee recruiting, new market entry, restaurant development, and system optimization. We are committed to grow the Wendy's brand internationally and we believe it will be a meaningful contributor to our growth in the future. We will provide more details on our vision and strategy at our Investor Day later this year which I am confident will give you the reasons to believe that we can significantly grow our international footprint. All of this ladders up to our Wendy's growth formula which is accelerating same-restaurant sales growth in North America and expanding our global restaurant footprint. We expect to deliver 3% to 4% of systemwide sales in 2019 which is driven partially by net new unit growth of approximately 1.5% with the remaining coming from same-restaurant sales growth. We're excited about the plans we have in place. And with that I will now hand things back over to GP who will provide our 2019 financial outlook and our new 2020 goals.

Thanks, Todd. I would now like to walk you through our 2019 outlook. As I mentioned earlier in the presentation, we expect to make an incremental $25 million investment into our digital platforms and you will see this within the guidance we are providing. We have also streamlined the number of metrics we are guiding to for our annual outlook in an effort to simplify and focus our key metrics. As we move into 2019, our roadmap remains unchanged. We are an efficient growth company that is showcasing meaningful systemwide sales growth on a backdrop of same-restaurant sales and global restaurant expansion which is translating into significant free cash flow generation. Now let's take a deeper look into our key financial metrics, starting with adjusted EBITDA. In 2019, we expect adjusted EBITDA to grow approximately 2.5% to 4.5% which includes approximately $10 million related to the one-time digital investment in scanners that will be recorded in franchise expense. Excluding this investment, our expected organic growth is 5% to 7%. Contributing to our adjusted EBITDA growth is royalty revenue driven by same-restaurant sales and new restaurant development as well as company restaurant margin expansion. To accelerate our restaurant margin performance, we are focusing on driving same-restaurant sales and productivity initiatives which will be partially offset by expected headwinds in labor inflation of 3% to 4% and commodity inflation of 1% to 2%. We expect G&A of approximately $195 million which is a slight headwind to 2018 driven primarily by resetting our incentive compensation plan and adding additional resources to support our digital experience and international organization, partially offset by savings from our ongoing G&A savings initiatives. Moving on to adjusted EPS. We expect adjusted EPS growth of approximately 3.5% to 7% which includes the one-time digital investment in scanner. Excluding this impact, we are expecting a healthy adjusted EPS increase of 8.5% to 12% driven by adjusted EBITDA and a tailwind from our new $225 million share repurchase authorization. This will be partially offset by a year-over-year increase in the tax rate driven primarily by the elevated stock options activity we had in 2018. In 2019, we expect free cash flow of approximately $230 million to $240 million excluding the $20 million tax effected cash outflow related to the FI case. Driving this cash generation is core earnings growth, lower reorganization cost, and working capital improvements. This will be offset by the $25 million investment we are making in digital and the headwind in cash taxes due to an increase in our adjusted tax rate. The digital investment is comprised of capital expenditures of $15 million related to our partnership with Accenture and the $10 million investment in digital scanners we are making on behalf of the North American system. In a moment, I will talk through how we expect free cash flow to accelerate in 2020. One of the keys to our ability to invest back into our business and return cash to shareholders is our flexible capital structure. Our maturities are let up nicely with our next tranche of debt not coming due until 2022 and all of our currently funded debt has been issued with attractive fixed rates which protect us against interest fluctuations. Our pro forma leverage ratio at the end of 2018 was five times and we're expecting a leverage ratio in the range of 4.5 to 5.5 times in 2019 and beyond. We would expect to naturally de-lever over time due to our continued earnings growth and scheduled amortization payments. Our capital allocation strategy remains unchanged which is investing in growth of The Wendy's brand as our number one priority followed by sustaining an attractive dividend and utilizing excess cash to repurchase shares. In light of our strong free cash flow growth, and in accordance with our stated capital allocation policy, we recently announced a significant increase in our quarterly dividend of 18% from $0.085 to $0.10 per share starting with our March dividend payment. This is another meaningful dividend increase for us and we have now increased our dividend seven years in a row. We also announced this morning that the board has approved a new share repurchase authorization for $225 million that expires in March of 2020 that will replace our current authorization. Today, we are providing new 2020 goals for global systemwide sales and free cash flow which continues to show that we are growing The Wendy's brand. We expect global systemwide sales to grow from $10.5 billion in 2018 to $11.5 billion in 2020 on the backdrop of global restaurants development and accelerated same-restaurant sales growth which includes tailwinds from our digital investments and our Image Activation program. We expect our free cash flow to increase to $275 million in 2020 which is an increase of approximately $45 million compared to 2018. This will be primarily driven by core earnings growth, working capital improvements, and a slight reduction in capital expenditures. As a reminder, being an efficient growth company that is showcasing meaningful systemwide sales growth on the backdrop of same-restaurant sales and global restaurant expansion which is translating into significant free cash flow generation. And with that, I'll hand things back over to Todd.

Thanks, GP. As I close today's formal remarks by revisiting the Wendy's way. I'm excited to share that 2019 marks our 50th anniversary as a brand. Our goal continues to deliver on the same mission, Dave Thomas had when he opened his first Wendy's restaurant in 1969 to craft a delicious quality fresh never frozen hamburger and serve it fast in a clean and comfortable environment. In order to bring the Wendy's way to life, just like Dave did when he opened his first restaurant, we must remain focused on investing in the quality of our food, providing great value, delivering exceptional service, and elevating our restaurants. We will bring this to life through our focus in 2019 to enhance the customer experience through digital and driving operational excellence to ensure customers have a great experience at all of our restaurants. We will continue to provide more access to the brand around the world through our global development plans and create a place customers love to go through our re-imaging program. It's important to remember that our system is one family and we wouldn't be able to do any of this without the support and dedication of our franchisees. With the passion they bring toward the brand day-in and day out, I know that we will become the world's most striving and beloved restaurant brand. Thank you for joining us today. I will now hand things back over to Greg before we open it up for Q&A.

Thanks, Todd. Before we get started, I'd like to share a piece of news about our Investor Relations team. After two successful years as a Manager of Investor Relations, Lauren Cutright will be transitioning into a new role in our finance organization in March and Abi King will replace Lauren as the Manager of Investor Relations. We're excited for both of them in their new roles. Now on to the IR calendar. First up is the filing of our 2018 10-K which is planned for next Wednesday, February 27. On Wednesday March 6, GP, Abi, and I will head to the UBS Conference in Boston and then attend the J.P. Morgan Conference the following week on March 14 in Las Vegas. On Tuesday, March 19, Todd, GP, Abi, and I will be in New York City for a Roadshow with Morgan Stanley and the following day on March 20, we will do a Roadshow in the Mid-Atlantic region with Goldman Sachs. If you're interested in meeting with us at any of these events please contact the respective sell side analyst or equity sales contact at post firm. We also announce today that on Thursday, October 10, we plan to host an Investor Day at our headquarters in Dublin, Ohio, where we will provide a summary of our long-term strategic vision and issue additional long-term guidance. With that, we're now ready to take your questions.

[Operator Instructions]. Our first question will come from the line of Michael Gallo with C.L. King. Please go ahead.

Hi, good morning. Couple of questions Todd and GP, when I look at the digital investments that you're making, yes, I was wondering, one, if we should expect those would be kind of ratable or they'll be kind of lumpy across the year. And then I was wondering if you can speak to some of the potential positives, what that's going to help you enable. I would assume perhaps mobile order and pickup will be a big part of that but can you speak to at all, what kind of benefits and when we start to see the benefits for some of those investments? Thanks.

Yes, thanks, Mike. We really want to accelerate our consumer facing digital initiatives, and we do think that's where the customer is going. And the great news is it complements our operating model in our restaurants, right. We we can take more orders into the kitchen with full customization we’ll make to order and all of these tools will complement that. At the end of the day what we really want to do is create a better connection to our consumer and gather the data and have a one-to-one connection with everything that we're doing. And we've made great progress. We've got a lot of tools out there, but we want to go even faster. And part of the move that we're making in 2019 and we telegraphed this a few months back or a few quarters back was to really leverage an external third-party partner, and we've got Accenture in the fold; we've got Laura Titus who we brought in from Accenture. And if you think about us really leveraging those partnerships, we can be less capital intensive. We really have a flexible demand and we have some great talent to complement the talent that we have internally, and you'll start to see those benefits take place throughout the year, but I really think this is an investment in the future. We're playing a long game to really show accelerated growth and we need to be out in front of it. And some of that you'll see in the pacing and sequencing of our investments, and I'll turn that over to GP to talk about that.

Yes, Mike, on the finance side, it's going to be a little bit lumpy, but the $10 million scanner investment is not going to repeat in 2020. So, it's going to be a source for accelerated EBITDA growth from 2019 into 2020 if that's going to disappear from the franchise expense line. The investment in Accenture is sitting at about $15 million on the capital line, and we would expect towards 2020 that we're shifting down toward the $65 million capital range with reductions coming out of all buckets of our capital.

So, Mike, when we get then --the scanner is up and running right. There is a lot of benefits for the scanners really helps our crew out along the way to make things a little simpler with accepting coupons with paper and digital. It really will help us over time on the digital payment acceptance front, and it really helps us accumulate a lot of great information on our consumer to make sure we can create even a better experience for them, so it could drive throughput over time.

Your next question will come from the line of Eric Gonzalez with KeyBanc Capital Markets. Please go ahead.

Hey thanks. Last quarter, you made a comment that you actually gained share of traffic within the QSR Hamburger category. And I think in your prepared comments, you said that that was the case for the year or so. I guess the question is did that -- how did that play out in the fourth quarter. Did you gain share of traffic versus the Hamburger category and also of sales in the category. And then I think you commented in the past that how change outside the Hamburger category is taking share. Obviously, we've seen results and talk about Poway, but are there any other categories or brands that might be encroaching our territory? Thanks.

Yes, thanks, Eric. If you look at our traffic in the fourth quarter, it was our 13th consecutive quarter of holding or gaining Hamburger category traffic share. So we're doing a nice job bringing in more customers more often. Our opportunity is how do we continue to trade them up, and a lot of the discussion we had last quarter and will continue to have as we adjust our calendar is how do we create not only one more visit but one more dollar as we bring the customers into our restaurants. So we had a little bit of pressure on our dollar traffic share within the burger category, but we've made the adjustments in our calendar and you actually see that in the market today, and as we've moved into the beginning of this year, we've moved in our trading folks up from our 4 for $4 into the $5 Giant JBC. We continue to trade folks up into our premium offerings with our great tasting, fresh, never frozen hamburgers with the Made to Crave line-up. So with three all new hamburgers out into the marketplace and even before that, we had a nice run with the Bacon Maple Chicken Sandwich. So, we do feel like we've got a really good balanced, high low calendar that we've talked about in the past but we've made some adjustments to that to really make sure that we not only connect to the consumer but we drive strong restaurant economic model for all of us.

Hey thanks. If I could also sneak one in on Image Activation. Could you maybe update us on where you stand, what percentage of the system has been remodeled? And then will you expect a lift from remodel to be next year or in 2019?

Yes, if you look at Image Activation, we got 80% of the company restaurants now image activated and we got 50% of the system image activated. Our goal would have been to be at 40%. So we're pacing ahead of that. As you think about all the investment decisions that a franchisee has in new builds, Image Activation, investments in technology, we're working with them on joint business plans to make sure we've got the pace and sequence out to get the best return. On the investments and the returns, I will turn that over to GP to talk a little bit about that.

Yes, returns and investments are unchanged. We're getting the lift that we always talked about depending on the investment level; mid-single-digits to high-single-digit lift that are permanent which then drive attractive financial returns and payout out of the investment.

Your next question comes from the line of Brian Bittner with Oppenheimer. Please go ahead.

Thanks. Good morning. In 2019 since your sales assumptions around efforts, what's driving the assumption that comps are going to improve from where they've been the last couple of quarters? And are you building any benefit into your outlook from digital, if you could talk about that, I appreciate it. Thanks.

Hard to hear all of the question but are we building in any benefit from the digital. Yes, we will see some acceleration as you think about our same-restaurant sales and we start to bring to life digital not only during the course of 2019 but what we've done in 2018 you'll start to see some of that helping us support our same-restaurant sales growth and we've been really around a driving a app acquisition strategy with mobile offers and really trying to get folks into that first and then as we work to bring to life mobile ordering support that with mobile payment and bring that whole architecture together, we'll have an opportunity to really advertise and bring it to life to create a lot more awareness to continue to make sure we get a good return for that investment.

Your next question comes from the line of John Glass with Morgan Stanley. Please go ahead.

Thanks very much. Two questions on comps. One is when you look at going from a 4 for $4 construct to a $5 construct, what are you keeping the 4 for $4 is it getting replaced. Do you build in some traffic declines because of that, how do you have confidence you can sort of raise the price on the bundle if you will in the value orientation the market's still very strong and what test results could you share to support that? And secondly, you mentioned speed of service is an opportunity. There's one magazine out there that tracks speed of service through drive through and it would suggest Wendy's did slow down quite a bit in 2018 and I don't know if that squares with what your data shows. But was there a decline in 2018 in speed of service particularly the drive through and what are your initiatives to speed that up, if that is the case?

Yes. So on the first one John on 4 for $4 is still playing a great role on our portfolio and is a nice driver of our business. I think we got an opportunity to continue to trade folks up to that $5 price point and the good news is as we saw the $5 Giant JBC twice during the course of 2018, it was able to trade customers up from 4 for $4 to $5 Giant JBC and we want both of those in our portfolio. So it's part of that laddered menu price architecture approach that we have. And then also as we continue the strong barbell, making sure we've got a great premium message as we just talked about. On speed of service, consistent with what the external reports are, we did slow down during the course of last year. And it is an opportunity and we've got work going on and off simplification within our restaurants. We've got a lot of training going on in the system as we speak around how do we position and support for throughput not only with the General Managers, with our multi unit operators. We're making sure that we've got tools out into the restaurants that that are all updated to make sure we're tracking timing and measurement to really create a focus on that. And then everything that we talked about with our consumer facing technology initiatives will also complement that because we really got to make it easy and comfortable for folks to order and get more orders back into the kitchen. So it is a focal point for us. And we've got a lot of initiatives underway, I'm very confident with the leadership and our operations team that we're going to continue to improve speed of service as we go into this calendar year.

And GP just one modeling question for you, how do we think about G&A beyond 2019, the comp reset and then you've got this one-time expense. Can we think about 2020 excluding those sort of flattish or how do we now look at G&A over a longer period of time at least through 2020?

Hey John, we didn't give kind of specific guidance on G&A but the way to think about is first of all our G&A savings initiative is totally on track. We're definitely focused on enabling growth, why I say is the number one priority for us. We want to be an efficient growth company, so the investments that we made in G&A in both digital and international is going to stay in the base. We are definitely committed to get to 1.5% of system sales little bit longer than previously communicated. And again we don't want to be the lowest cost provider. We are currently in the second quarter in the peer group with the G&A that we have and we think that's the right spot for us to be an efficient growth company.

Your next question comes from the line of Jake Bartlett with SunTrust. Please go ahead.

Great. I had first just a quick clarification and then a couple of quick questions. On the clarification, Todd, are you saying that traffic has been positive or was positive in 2018? I think you talked about more people coming and I just wanted to kind of clarify whether that's the case?

Yes, Jake. So in the Hamburger category, we are growing Hamburger category traffic share. But if you look at Q4, our traffic was down slightly. And if you look at it on a full-year, we were flat. So the Hamburger category has grown a little bit softer than total QSR. And to one of the earlier comments who is actually stealing a little bit of that share, well you're seeing it in the Mexican concepts and you're seeing in the big chicken player and those are opportunities to make sure that we understand why they're stealing some of the share and we'll make sure that our calendar and our service experience really complements that we can continue to bring those customers back over into our brand.

Got it. And then on your promotions, you talked about what you've run in the first quarter here the $5 Giant JBC in the Made to Crave. It sounds like especially given your guidance which I think implies about 1.55% to 2.5% same-store sales in 2019. But it sounds like that that is proving effective. And I'm also wondering whether you're seeing consumers kind of responding better to the more premium promotions in the past few years they've largely fallen on deaf ears with consumers. So I’m wondering whether you're encouraged by just the results of the Made to Crave for instance and whether that's an indication that maybe we're seeing a shift in the promotional cadence out there or strategies out there. And then lastly, if I look at your kind of longer-term systemwide sales growth guidance, it implies I believe for 2020 about a 5% to 6% systemwide sales growth and so I'm wondering whether that's really just reflexive reacceleration of unit growth pretty materially or you're kind of baking in a kind of continued tailwind from same-store sales?

Yes, Jake, so on the calendar, I'll start with really the adjustments that we made as we finished the quarter in the fourth quarter, we had Bacon Maple Chicken Sandwich on the premium side which we felt good, it performed to our expectations and we turned on the Giant JBC. And so you look at our two-year comps throughout the quarter, we did see an acceleration in December on our two-year comps. So we feel good that that strategy was working to finish the year. I don't want to comment on where we are on the first quarter but we're really feeling positive about the adjustments we've made in our calendar to continue to bring folks into our restaurants more often but also trade them up. And it's really bringing to life the strategy that we've been talking about. What do we need to do to really bring folks to life with one more visit, smart dealing and innovations and really protect and increase our traffic share growth but also make sure that we are driving that one more dollar around premium core in our innovation messaging and it is that balance and we continue to evolve and get smarter with where the consumer and the competitive landscape is. So I'm feeling good about that. I'll turn it over to GP to talk a little bit about the systemwide sales.

Hey, Jake. On 2020 system sales, your observation is right. There's a little bit of an acceleration assumed between 2019 and 2020 what is it driven by, it's driven by definitely by SRS acceleration a little bit since we're building hopefully digital momentum. The other assumption is clearly you need acceleration between 2019 and 2020. So that's the first two drivers and the third one, don't forget in 2020, we have 53rd week. So that also helps us get slightly outside growth.

Our next question will come from the line of Gregory Francfort with Bank of America. Please go ahead.

Hey guys, I have two questions. One was just a follow-up to I think was John's question on menu simplification. How do you measure that, is it item count or SKU and maybe where should that be? And then my other question was just on the competitive landscape and value. We're seeing one of your large competitors, I know a lot of guys in QSR aren't disclosing check versus traffic but one of your large competitors is disclosing that, they've got check growth running 4% to 5% with negative traffic and you guys clearly have a strategy going the other way. What do you think that right balance will be on a go-forward basis between check and traffic or how do you think about price mix and maybe where that balance should be?

Yes. So on menu simplification isn't just measuring the number of items in the restaurant. It's really where do we position our folks. What is the complexity as we bring new offerings into our restaurants? That's why we really like these Made to Crave line-up, their premium Hamburgers that are easy to build. So even though we had a little complexity as we change the menu boards, there are great tasting premium sandwiches that we can build quickly and really support our throughput initiatives. It is leveraging a lot of the training and the tools to make sure that we set up our people up for success and we'll always look at the number of SKUs that we have the right SKUs. But it really gets down to ease of build and ease of training for our employees on our restaurant and make sure that we still continue to create good variety for the consumer. If you think about the landscape and value if you go in to, we've really aired on the side of really bringing in traffic and we feel really good about starting from a strong spot because we've been winning Hamburger category traffic share and bringing folks into our restaurant. So we look going into 2019. We want to evolve that a little bit and make sure we got a little more balance. And that gives us the opportunity to drive mix and you'll probably see during the course of this year where we may have some slight traffic declines and a little more in price and mix but that's really a balance of lapping over where we've been the last couple of years in our base.

Your next question comes from the line of Matthew DiFrisco with Guggenheim Securities. Please go ahead.

Thank you. Sorry if I missed this but did you guys disclose how much delivery was in for the system or can you give us sort of a ballpark estimate. And I'm curious just comparatively how that's grown and maybe as a contributor to the comps year-over-year where that stands now?

Hi, Matt. We are really happy with the progress we're making on delivery. It definitely exceeding our expectations. We have a coverage of about 60% by the end of 2018 and we expect to grow this to about 80% by 2019 so great, great progress. We are happy with check sizes 1.5 to twice the size of a regular check, we have not disclosed in terms of how much really tailwind that generates for us in today's point of view. We're obviously watching it and we are also watching obviously customer satisfaction and value perception of delivered orders and in both instances we are waiting actually very favorably and high.

Is it also though is there some offset with maybe a little bit pressure on the restaurant margin side within the expenses or the commission related with that?

Great question. Not in our case, the model that we've chosen with DoorDash, we are literally passing on all costs, so service fees and the delivery fees are passed on to the consumers and again that's the reason why we are watching customer satisfaction fairly closely and especially the value perception to make sure that we actually got that right in the minds of the visitors.

And our opportunity really, Matt, is to continue to drive awareness, awareness is still very low on delivery, it's still a small percentage of our business. That's why you don't see a meaningful impact yet on comps. And we still have a lot to learn on the incrementality but what we do know is our biggest competitor is food at home and providing more access and more reach to our brand, complementing our restaurants with delivery is a good proposition. We've got to continue to look at the balance between the restaurant economic model and the consumer economic model. But we feel good right now we've got a lot of support in our system to continue to drive the awareness in support of delivery.

Is there a correlation with the slowdown perhaps on the speed of service, the drivers maybe the DoorDash driver going through the drive through? Is there a way to mitigate that or try and maybe test some windows dedicated for the DoorDash person?

Okay. Clearly there's always opportunities to get better and really figure out how we get that dasher through the restaurant a little more often. There's pockets of restaurants where that could have impacted speed a little bit. But in general, no, it's spread out and had a meaningful impact. But we'll continue to look at how do we partner with DoorDash, how do we make sure that we make it easier for the dasher to get orders into our system to ultimately get them through our lines faster and ultimately get food to the consumer faster and that's what the ultimate goal is.

Your next question comes from the line of Jeffrey Bernstein with Barclays. Please go ahead.

Great. Thank you very much. Two questions. One, Todd, just wondering if you can size up what you think franchise sentiment and it seems like it's been challenged across the quick service industry of late, I know your comp returned modestly positive this quarter but presumably profitability is under pressure. So I'm just wondering from franchisees maybe lateral implications for whether it's future unit growth or ongoing remodels, what kind of feel you're getting from the franchisees? And then I have one follow-up.

Jeff, we've talked about this in the past. We've got a strong and great relationship with our franchise community and we spend a lot of time partnering and talking with them. We have our committee with Wendy's National Advertising Fund and we meet with them regularly on a promotional calendar, innovation calendar to make sure that we've got their support and buy-in. We work with our Franchise Advisory Council on a regular basis to make sure that things we're putting into the restaurants really work and they're partnering with us to feel comfortable about this operationally. And we have our week tech councils. So as we bring technology to life in the restaurants, so we feel good that we've got open lines of communication. As you look at where they would be feeling from an economic perspective, we haven't accumulated all of their data from profitability yet for 2018. But they would largely follow the company margin pressure. But what I know about our system is anytime, we start to rally folks behind our great tasting food and really try to make sure that we get great tasting fresh never frozen North American Hamburgers into their stomach with items like Made to Crave, they're going to execute hard and those are opportunities to drive profit but we know we've still got a big pocket of consumer that's stretched and we got to make sure that Wendy's has them back. So that's why we need a balanced high-low calendar on a regular basis.

Understood. And then just on international, I know you mentioned that I guess you missed your goal for unit openings this year and I know you talked about kind of doing a full review of the international strategy. My guess is we'll get an update in October but any kind of early read on the review of the strategy whether it's fewer or higher volume units. Are you still thinking about the 10 core markets on kind of accelerating that unit growth meaningfully in 2019 and 2020? Any thoughts around that would be great.

Yes. So let me give you a few thoughts just, Jeff, and I don't want to steal a lot of thunder. We've still got work under way and Abigail will talk a lot about it in October. As we think about 2018, we did have a couple of markets under transition to new franchisees but we're really encouraged that we've got great partners coming into those markets. On a couple of different thoughts, we talked on the prepared remarks that we will think differently across the globe to accelerate growth and now Abigail take on leadership of that business, we're going to utilize a ton of the tools that we've had from the North American playbook. When you think about incentive structures, new restaurant design solutions, the franchise recruiting even system optimization, there is a great opportunity to build the stronger foundation during 2019 to set ourselves up for accelerated growth. And we're going to relook at the profile of the ideal franchisees and the structures. So we'll look at things like master franchising and do we want to bring some private equity in to help us internationally. Where do we want to go on joint ventures, so we're going to look at the full toolbox but we'll really let Abigail bring that to life in October? But as a reminder, we really still believe in an asset-light model internationally and that will be our focus.

Your next question comes from the line of Alton Stump with Longbow Research. Please go ahead.

Good morning, thanks for taking my question. I guess I just wanted to ask going back to the competitive environment and as it pertains to the speed of service. How much of an impact, I'm sure this is hard to place out, but how much do you think that had on your comp performance over the course of 2018?

Yes, if you look at speed of service, clearly there's a correlation to taking down speed of service and driving sales. I won't put that number out there because we know it internally. But when you think about our busiest day parts at lunch, we all see it. If you got to a restaurant with a long line, you're going to pass that long line and head somewhere else. So our opportunity is how do we make sure that those lines move fast. How did those lines move consistent day in and day out, so we can earn the trust of that consumer who wants to come back and really drive a little more frequency to our restaurants. So we're in that rotation on a regular basis. And we know that speed matters in the spirit of the overall customer experience. It's one of the elements that we measure in our overall satisfaction and we're not in a bad spot to start. We still are up there in the top of speed with the relative peer groups but we know and we have an opportunity to do even better. And that's why we've put the tools and training in place as we speak to really enhance that experience.

That was helpful, thanks Todd. And just one more question if I could and I'll hop back in the queue. Kind of getting back to franchisee and kind of where they're thinking at the moment. Has there been any impact comps have slowed in the last couple of quarters as far as their desire, whether it's Image Activation and/or to build new stores or are they not that concerned about what's happened the last six months?

Well you always got to look at where we're from a profitability perspective with our franchise community because we know the common thread across the whole system is the restaurant economic model and if it's working for them, it's going to be working for the company and that's why we're going to great lengths to continue to drive strong sales growth and profitable sales growth for the system. With the challenging back half of the year from a top-line perspective and a little bit of pressure on margin, I don't see that having an impact on our business, we're continuing to re-image our business. In North America, we've got a great pipeline on North American New Development into 2019 even into 2020. The groundbreaker incentive has been really well received. So we are signing up incremental new development agreements along the way and we're helping to support them on the technology front with the announcements we make today. So it is a good balance. All of those tools are growth tools. Right, and if you look at our growth opportunities into the near-term, we're excited about them. We got mixed opportunities behind our one more visit, one more dollar, right. We've got an even more consistent service experience that we've been creating our restaurants to bring folks in more often. And we know digital will play a role in driving frequency, loyalty, throughput, and check. And then over time we've still got IA as a tailwind. We only got 50% of the system re-image, so that will continue to help us and we know we're still underutilized in certain day parts, afternoon day part, late night day part and then ultimately how do we bring international to life. So there's still a lot of great growth opportunities in front of us as The Wendy’s brand.

Your next question comes from the line of Jeff Farmer with Gordon Haskett. Please go ahead.

Thank you. Just a question and a quick follow-up, on the question what type of consumer response as you guys see with that dollar any size for promotion and what drove that decision to extend to that promotion?

Hey Jeff, we always encased 1 dollar any size promotion in the past all our criteria from a consumer point of view, operations point of view, and finance point of view. We saw traffic, but our traffic was basically not enough to totally overcome and make this promotion totally profitable. So that was the challenge we had with it and that's probably a function of the competitive environment, it was operating in. And it was probably also one of the main drivers why we slightly missed our rest of margin guidance for the year.

That’s helpful. And then sticking with you GP, just touching on the components of the expected bridge from the I think it's $230 million to $240 million of free cash in 2019 to that $275 million in 2020. Again I acknowledge that you've touched on it but can you provide us any color a little bit more granular color as to the components would you bridge to that number that $275 million number in 2020?

Yes, there are really two main drivers, right. First of all, high-single-digit core earnings growth right. So don't forget we're going to less the one-time investment on the scanner side so that will give you very high earnings growth and then we're planning for a good reduction in our capital expenditures down to about $65 million. The combination of those two are the main drivers there is still a small driver there, the working capital initiatives that we are starting this year is going to bleed slightly into 2020 as well. So the combination of those three give us confidence to hit that $275 million.

Your next question comes from the line of Sara Senatore with Bernstein. Please go ahead.

Thank you. I have two follow-up questions please on some of the topics already addressed. The first is on just digital and your thoughts that that should help accelerate comps. I guess when we look across the industry it's now is evident that digital investment translate into same-store sales or at least not to the extent that they offset any of the other headwinds. So I guess is there any reason to think that you might have a different experience than some of the other peers that seems to be investing but largely just as table stakes now as opposed to a cop driver. And then my question, my other question is on restaurant level margins and franchisee profitability that you addressed. Our sense is that franchisee margins may actually be a little bit better than company operated margins at this point. And I was wondering if that's true, is that related to them taking more price. Is there any sort of price traffic trade-off where their margins look better but obviously the systemwide comps on a stacked basis are a little bit softer? So just trying to understand maybe how to interpret franchisee profitability in the context of what the company stores are doing? Thanks.

Yes, Sara. I'll start with digital and turn it over to GP on restaurant margins. But if you think about where Wendy stands in the digital arena, our operating model complements technology as well as any operating model because we are a full customization make the order, we can not only take the orders faster but we can actually get people out fast and accurate and that can be a big differentiator. You're right everybody is going to be having technology but who does it the best and creates the best customer experience. That's the opportunity for us and where our biggest opportunity is, is to drive more frequency into our restaurants to really win that that share of stomach battle in a category that's flat to slightly up. So we do think that technology can drive frequency as we better connect to that consumer and create a better more consistent service experience with them day in and day out and a lot of that comes back to speed. If you can figure out a way to get those orders into the kitchen faster and get folks through faster, they’re going to have a great experience and they're going to want to continue to come back. I'll turn it over to GP on the restaurant margin.

Hey Sara on the restaurant margins. Right on the year we were down about 100 basis points versus prior year about 30 basis points in food and paper, 30 basis points on labor and about 40 basis points on occupancy. So I would say to compare the franchisees on the labor side and food and paper side it will be about in line with us, labor side maybe a little bit better, systemwide the labor guys are little bit tighter than us. They will definitely will do better on the occupancy side of things because don't forget we were hitting quarter two and quarter three with higher insurance costs, it was holding us back and hopefully will not hit them. So overall I think there is a conclusion out there that franchisees should have done a little bit better than that.

Your next question comes from the line of Chris O'Cull with Stifel. Please go ahead. Chris O'Cull: Thanks. Todd, are you concerned that franchisees may be struggling to staff their stores in the tight labor market which could be the cause of the slower speed of service?

Yes, Chris, staffing is one of the things that is a challenge for all of us. How do you get quality talent? How do you get enough talent and how do you make sure that we've got folks coming in reliable on a regular basis. That could have a little bit of impact on speed but that's incumbent on us and our great General Managers to create environments where people feel valued and appreciated and us providing the training tools to make sure that we're setting folks up for success. Because we have great GMs that that may not have full staffs but can create a great environment and create a lot of speed and throughput in the restaurants. So we just got to continue to share and leverage all those best practices. But it is one we got to continue to recruit and bring in good talent into our restaurants to make sure that we really complement the full service experience day in and day out. Chris O'Cull: Are you able to track staffing levels at the franchise stores or maybe get satisfaction around speed of service and value at the franchise locations?

Yes, we've got overall satisfaction in all the elements of overall satisfaction across the whole system. So we've got a good sense where our opportunities are and we can work and partner with our franchise team and really get to root cause. Sometimes that could be staffing, other times that may be other opportunities that they have within that restaurant. But we really got to continue to work on what's our employment brand, what do we stand for? How do we connect to that next-generation of employee? And then really make sure that we retain our core teams because if you can retain a good core foundational team within the restaurant, you can manage some of the turnover. The great news is our turnover metrics whether they're at the General Manager or below level are better than industry averages. So we start from a good spot and our opportunity is how to even enhance that experience even further for our employees. Chris O'Cull: Thanks. And then just one last one. How should we think about the ongoing level of technology investments? I mean is this something that will be lumpy like kind of the remodel cycle or should we expect just a certain rate of growth going forward?

I mean digital investments are here to stay while it is the necessity to compete in the marketplace, as Todd said previously with our operating model, with a high level of customization it should be a competitive advantage for us. But as I said previously, it's lumpy right. The one-time investment is going to go away. The engagement we have in Accenture is a multi-year engagement that is front-end loaded. So that points to the fact our confidence that we can take also capital down to about $65 million by 2020 while staying competitive in the digital space.

Your next question comes from the line of Will Slabaugh with Stephens, Inc. Please go ahead.

Yes, thanks for taking my question. This is Hugh on for Will this morning. Geographically, have you seen any impact from your business from one of your peers for turning some marketing power to local co-ops and then also we've heard some broader QSR category. Some of your peers going out for breakfast the last couple of quarters. I'm just curious on how you're looking at that day part in potentially innovating around that day parts in 2019? Thanks.

Yes, we do see pockets of regional differences. I don't think that's really driven by the competitive support. I think that's more driven just by the consumers and the economics in a lot of those regions. But it's not a huge delta from region to region, from a same-restaurant sales growth level. So I don't really see that, that Hugh. Breakfast as you know, we don't play in that day part. We've got about 300 restaurants that are in breakfast and you know to the extent that others want to spend a lot at the breakfast day part if that creates some opportunities for us at lunch and dinner as we continue to be focused on that business we'll feel good about that.

Your next question comes from the line of John Ivankoe with J.P. Morgan. Please go ahead.

Hi, first just a clarification that the $15 million of consulting spend related to technology that you're spending in fiscal 2019 that's being capitalized as part of CapEx? Is that correct?

Hi, John, yes, you're right. It's part of our capital guidance of $75 million to $80 million. We have digested in that guidance $15 million for the Accenture.

Okay. And I understand maybe some of that is more short-term in nature and some of that might be longer-term in nature but I was hoping if we could talk about the implied $70 million to $75 million of CapEx guidance for fiscal 2020. Obviously that's very important in terms of your free cash flow generation but can we talk about kind of major buckets of that spend and obviously ask the question in the context of 80%, if I wrote that down correctly. Company restaurants that are currently image activated. One might assume that remodel cost for company restaurants actually could go down in the out years as opposed to continuing to generate a number like $70 million to $75 million that might be perceived by some as being actually relatively high?

Yes, John, you're right. There will be four bucket of capital spending development capital for our company restaurants that fund basically new builds and Image Activation, IT capital, maintenance capital, and corporate capital. And again my perspective is by 2020, we should be on the capital side down to about $65 million. So how do we get from the $75 million to $80 million range down to slightly lower, is, as I said beforehand, the Accenture contract is front-end loaded, so it it's helping us to get this down. And as you also pointed out, we have obviously high image activation percentages already so all of that is helping us to basically reduce our capital spending between 2019 and 2020.

Okay. So I want to clarify that $65 million, is it $10 million to $15 million reduction versus 2019 not $5 million. Maybe I misheard that but could you clarify that $65 million will be the target for CapEx spending in fiscal 2020?

Yes, I can confirm this, it is $65 million.

Your next question comes from the line of Andrew Strelzik with BMO Capital Markets. Please go ahead.

Hey good morning. So I know in 2018, there was an intentional reduction in the pace of innovation. I'm wondering as you kind of reflect back on that decision how would you assess it. And when I look at the Made to Crave menu and the innovation there, that seems pretty significant relative to what happened in 2018. Is there a desire to maybe ramp that up in terms of either pace or significant to the innovation in 2019?

Yes, if you think about 2018, we really had a focus on driving awareness around the fresh never frozen North American beef as others wanted to emulate us with our business model. So we felt good about really driving the core and really elevating the quality of our core offering. We've done some things within our restaurants to improve our operational procedures to make hotter and juicier and more melted cheese hamburgers and we feel good about all of those. And with that strong foundation now, we've got an opportunity to come back to our roots and be smart around innovation and do innovation that doesn't overly complex -- make the restaurant overly complex but continue to do, create excitement and drive folks up. And with a line-up like Made to Crave, we've got three new Hamburgers. So you've created some variety that that has some staying power rather than stuff that comes and goes pretty quickly. So we feel good that that could be a platform for us into the future.

Your next question comes from the line of Karen Holthouse with Goldman Sachs. Please go ahead.

Hi, just a question on G&A next year and then tying that into the longer-term view. If I just do the math on system sales growth and then G&A dollars and the guidance that we get G&A as a percent of system sales of like 1.8% versus the guidance we originally got at 1.5%. You've talked about some of the one-time expenses hitting the CapEx line and hitting franchisee expense. Is there anything discrete within that $25 million or cost for Accenture that are also included in G&A? And I was just trying to kind of bridge from that 1.8% -- is 1.5% still the right longer-term view?

Hi Karen, your math is about right. So 1.8% is the number that we are sitting on with that guidance and it's obviously ahead for us as compared to 2018. So what are the puts and takes in there. The puts and take is we obviously had to refund the incentive comp of about $5 million. We have a reinvestment in the G&A line year-over-year of about $5 million in, it's between international and digital and it's permanent, it's here to stay to make sure we can grow the way we want to grow. And then obviously that sort of $10 million of headwind and we're offsetting that with about $5 million carryover incremental savings out of the final leg of our G&A restructuring initiatives that we had filed previously. So as I said, we are little bit behind as a percent of sales metrics which we originally thought. It's definitely a function of that our system sales have grown a little bit less than what we had anticipated. Seems to be a bullish on our outlook what we don't wanted to do is we don't want to cut now G&A and then hurt us for our long-term growth prospects. So we know our target is 1.5% we might get there a little bit later.

Your next question comes from the line of Peter Saleh with BTIG. Please go ahead.

Great, thank you. I just want to come back to the conversation around delivery and digital. On the delivery side, are you guys seeing in the data repeat visits from customers or is what you're seeing predominantly trial of delivery for the first time?

It's been good. We create awareness. Clearly see the trial, the good news is for the folks that are trying and are aware we're seeing nice repeat and we've got a great partnership with our delivery partners to create awareness in some of the things they're funding to create awareness and create compelling economic model for delivery. We're creating some awareness with some of the advertising support that we have and some of those providers are even advertising their own brands now. Our opportunity is really, as I said earlier, how do we even drive more awareness, so more folks know they can get delivery from Wendy's and as we build out from 60% of our system being able to support delivery at the end of 2018 to 80% during 2019, we can continue to advertise whether it's nationally or locally and create that awareness. And our partners will do the same.

So you will be increasing your -- the funds associated with delivery in terms of advertising this year or allocating more funds towards advertising that capability?

I think we'll continue to do what we've done during 2018, efficiently use some of our funds. And what you've seen in a lot around key events when consumers are at home, we've made sure that they know that they can have their food delivered to them. And we've been smart around tagging some things and we've been smart in our partnerships with our delivery partners during key events when folks are at home where they actually fund some of the delivery expense to make sure we can create some excitement for people to try and when they have a great experience prior to repeat.

And it's also nice to see that DoorDash themselves started to advertise to create -- to increase their own brand awareness and we are really happy that our brand is featuring actually in their advertising as well.

Great. And then just lastly, I think you guys were testing kiosks in some stores. Where do you stand on the kiosk implementation, are you planning to roll this out in 2019 to more franchisees? Are they interested in adopting this?

Hi, yes, kiosk is as we always said going slower than planned. I think it's an important part surrounding our consumers digitally but it's slower than we thought, right. So we have it in 60% of our restaurants, we’re really trying to put our money where our mouth is. So we are trying to prove the business case, the business case is there. You get slightly higher check sizes, you get revenue growth, you get throughput enhancements in busy, busy day parts and in the slower day parts, you get a chance to take labor out. So it pays out, it's up to us as a franchisor to prove our investments to hopefully then accelerate the excitement within the franchise community.

Yes, so that's 60%, 60% in the company restaurants just we have that. So again we’re leading the system to really prove the benefits and a lot of it comes down to labor positioning. How do we educate the consumer? And it may not be right for all trade areas and that's part of the learning that we have but we do feel it's a compliment to the whole digital strategy. There's a role in place for kiosk as well as mobile ordering and all the other things that we're doing.

Your next question comes from the line of Dennis Geiger with UBS. Please go ahead.

Great, thanks. Wondering if you could give any comments on unit development agreements currently, what the multi-year pipeline looks like. I think in the past you kind of either given number of commitments or the percent of commitments that are locked in? And then just separately just wondering if there's any update you can give on the First Kitchen conversions in Japan, where that stands and if there's any way to think about the cadences going forward? Thanks.

Hi, Dennis. On the development agreement, we've made great progress with the groundbreaking incentive that really is exciting news for our franchisees and it definitely led to incremental development agreements over and above agreements that had been committed previously. On a global basis about 50% plus is committed and secured via development agreement. On the First Kitchen side, we are making good progress with our progression. I think we have about little bit north of a third of that First Kitchen restaurants converted in Japan, obviously with plans to do further of them in 2019.

Your next question will come from the line of Jon Tower with Wells Fargo. Please go ahead.

Awesome. Great, thanks. We've exhausted quite a few questions, so I just want to hit on a couple, first on your mobile acquisition strategy can you put some numbers around perhaps app downloads and registered users. The next on Image Activations how should we think about the pacing over the next couple of years. I know you've targeted 70% by 2020; is that still on track? And then the franchise flips going forward, I know you've talked about historically doing roughly 200 year, this year it was about 100 store shortfall. How should we think about that over the next couple of years? Thank you.

Yes, so we do internally really track where our active users are, it's a metric that we're not going to provide externally. Our job is really about driving the acquisition and keeping them in. So it's really about active users get them in, get them to stay in there, and get them to continue to use our app and we'll look at it based on external third-party competitive benchmarking to really understand where we stand. On Image Activation, since we are ahead of pace as we ended 2018, we will see a continued growth and we'll probably end up I would guess in that 65% to 70%. So we're still feeling bullish and optimistic that we'll get close to 70% re-imaged by the time we get to 2020. Good investment, good return and good opportunity to continue to bring in more customers more often. And on franchise flips, we'll probably see in the ballpark of 100 to 200 franchise flips during the course of 2019. You also would remember there is other activity that goes on with franchise-to-franchise transactions that we get actively involved in. So one of it is what interest is there from our franchise community to get our help and then where do we have to help and get involved in other activity because we only have so many -- so many folks that can work on these deals. And that was some of the balance that you would have saw last year, right we had 96 franchise flips but we had about 320 restaurants change hands during the course of the year and our teams actively involved in all of that to ensure that we're building a stronger system for the future.

Your final question will come from the line of Bob Derrington with Telsey Advisory Group. Please go ahead.

Yes, thank you. GP, typically you've given us some color about the contribution from the Image Activation program to same-store sales. For this last year, system -- North America system sales, same-store sales were up 0.9%. How much of that would you attribute to the Image Activation program? And I've got a follow-up.

Hey Bog, the tailwind from Image Activation was about 50 basis points.

50 basis points? Okay, terrific. And, Todd, one thing that I'm wondering as I look at typically ordering Wendy's through DoorDash here in the local market, typically the retail prices are marked up approximately 30% to 35%. What kind of feedback do you get from any either your stores or your customers about that higher price versus the retail store price?

Yes, from a restaurant level, we don't get any feedback right because they're not taking a big impact and big hit to restaurant margins, so they feel good. This is a truly incremental business and incremental profit for them and that's why they get very excited to get behind it and support it. From a consumer perspective which we'll have to continue to watch and look at the consumer economic model, we haven't seen any adverse impacts, right. If you think about our ratings in DoorDash, we consistently 4.5, 4.6 out of 5 on their rating scales. The overall satisfaction and we track overall satisfaction both in the restaurant drive through takeaway and delivery, our highest overall satisfaction is still on a delivered order. So we're getting there -- we're getting the food to the consumer fast and hot. And they feel good about that overall experience. So we're feeling good that we've got the right balance for the long-term to make sure that it's healthy for us and that the consumer is still highly satisfied. So we'll continue to watch it.

So you think that generally consumers are beginning to understand that there is no such thing as free delivery and paying a higher retail price versus in the store is just part of the service they get?

Yes, I think you're exactly right, Bob. At the end of the day convenience continues to be redefined right. We continue to drive a lot of convenience with our traditional drive through, convenience now is how do you get food hot and fast to your house and folks know that that that's not for free. And it is going to cost a little bit because that last mile does take some economic pressure to get there but they really price having the food that they want delivered to them when they want it. And as I said earlier food at home is our biggest competitor. So if we can provide more access that way that's a good thing for the brand.

Thank you, Bob. That was our last question of the call. Thank you, Todd and GP and thank you everyone for participating this morning. We look forward to speaking with you again next quarter when we report on our first quarter results. Have a great day. You may now disconnect.