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Wendy's International Inc. plans to close 40 to 60 Wendy's outlets and could close some of its Tim Hortons locations in the U.S., including some of the former Bess Eaton restaurants acquired in 2004, according to a report by Business First.
"These (Tim Hortons) units have produced lower-than-anticipated sales in their first year of operation, which has negatively affected profitability in the U.S.," the company stated in a filing with Securities and Exchange Commission. The company acquired 42 Bess Eaton restaurants in New England in the second quarter of 2004.
Wendy's did not put a number on the potential Tim Hortons closings, but said it would evaluate individual restaurants for closure and markets for possible impairment charges. According to the filing, Hortons' U.S. business has operated at a "cumulative break-even" in the past three years and same-store sales have grown 9 percent since 2000.
The company also said it will close between 40 and 60 underperforming Wendy's stores that are negatively impacting its bottom line.