Dive Brief:

• Wendy's submitted a consortium bid on Wednesday with a group of pre-qualified franchisees to acquire NPC International’s 393 Wendy's restaurants across eight different markets, according to an SEC filing.
• If the bid is successful, the chain expects that several existing and new franchisees would become ultimate purchasers of most of NPC's markets with the company acquiring one or two markets. Wendy’s will maintain its ownership level of 5% across its system. 
• Wendy's bid for NPC's units comes a week after it filed an objection to the stalking horse bid by Flynn Restaurant Group. The chain claimed that Flynn owns two competitors, Arby's and Panera, and isn't willing to divest from those assets. Wendy's also feels the break-up fees associated with the Flynn deal are unnecessary and expensive.

Dive Insight:

Wendy’s bid for NPC's units will complicate the sale process, especially now that the court has approved the stalking horse bid. It could ultimately result in NPC paying break-up fees one way or another. If NPC group doesn't agree to the sale, it could pay over $20 million and if Wendy’s doesn’t agree to the sale, the break-up fee would be over $10 million. 

The chain’s bid would have to come in high to try and best Flynn's $816 million bid for both 900 Pizza Hut units and the Wendy’s units. But Wendy’s objections to working with Flynn have been stacking up, even though Flynn believes it can work things out with the chain. The two have yet to meet an agreement on development and reimagine of restaurants.

The QSR tends to have more control over its franchisees and prefers working with franchisees that are willing to build new locations and remodel existing units, according to Restaurant Business. This bid would give it a guarantee that it would have a say in the future of these locations. 

If Wendy's bid is successful, NPC's sale to Flynn could be of just its 900 Pizza Hut units, a sale the pizza chain has already agreed to.