Effective September 29, 2008, in conjunction with the merger ("Wendy's Merger") with Wendy's International, Inc. ("Wendy's") described below under "Introduction and Executive Overview - Merger with Wendy's International, Inc.", the corporate name of Triarc Companies, Inc., ("Triarc"), changed to Wendy's/Arby's Group, Inc. ("Wendy's/Arby's" or, together with its subsidiaries, the "Company" or "we"). The references to the "Company" or "we" for periods prior to September 29, 2008 refer to Triarc and its subsidiaries. Certain statements we make under this Item 7 constitute "forward-looking statements" under the Private Securities Litigation Reform Act of 1995. See "Special Note Regarding Forward-Looking Statements and Projections" in "Part 1" preceding "Item 1 - Business." You should consider our forward-looking statements in light of the risks discussed under the heading "Risk Factors" in Item 1A above as well as our consolidated financial statements, related notes, and other financial information appearing elsewhere in this report and our other filings with the Securities and Exchange Commission.

This "Management's Discussion and Analysis of Financial Condition and Results of Operations" of the Company should be read in conjunction with the consolidated financial statements and the related notes that appear elsewhere within this report.

Because the merger with Wendy's did not occur until the first day of our 2008 fourth quarter, only the fourth quarter results of operations of Wendy's are included in this report. The results of operations discussed below will not be indicative of future results due to the consummation of the merger transaction with Wendy's as well as the 2007 sale of our interest in Deerfield & Company LLC ("Deerfield") discussed below.

Introduction and Executive Overview

Our Business

We currently manage and internally report our operations as two business segments, the operation and franchising of Wendy's restaurants and the operation and franchising of Arby's restaurants. In 2007, we also operated in the asset management business through our 63.6% capital interest in Deerfield, which was sold on December 21, 2007 to Deerfield Capital Corp. ("DFR"). As a result of this sale, our 2008 financial statements include only the financial position, results of operations and cash flows from the restaurant businesses.

Restaurant business revenues for 2008 include: (1) $1,632.9 million recognized upon delivery of food to the customer, (2) $29.4 million from the sale of bakery items and kid's meal promotion items to our franchisees, (3) $149.5 million from royalty income from franchisees, (4) $7.6 million from rental income from properties leased to franchisees, and (5) $3.4 million from franchise and related fees. Our revenues increased significantly in the 2008 fourth quarter due to the Wendy's Merger. The Wendy's royalty rate was 4.0% for the quarter ended December 28, 2008. While over 78% of our existing Arby's royalty agreements and substantially all of our new domestic royalty agreements provide for royalties of 4% of franchise revenues, our average Arby's royalty rate was 3.6% for the year ended December 28, 2008. In our former asset management business, revenues were derived through the date of the Deerfield Sale in the form of asset management and related fees from our management of (1) collateralized debt obligation vehicles, ("CDOs"), and (2) investment funds and private investment accounts ("Funds").

In our discussions of "Sales" and "Franchise Revenues" below, we discuss North American same-store sales. Beginning in 2008, we have been reporting Arby's same-store sales commencing after a store has been open for fifteen continuous months (the "Fifteen Month Method") consistent with the metrics used by our management for internal reporting and analysis. Prior thereto, and including the 2007 fiscal year, the calculation of same-store sales commenced after a store was open for twelve continuous months (the "Twelve Month Method"). Wendy's same-store sales are reported after a store has been open for at least fifteen continuous months as of the beginning of the fiscal year. The tables summarizing the results of operations below provide the same-store sales percentage change using the current Fifteen Month Methods, as well as our former Twelve Month Method for Arby's.

Our primary goal is to enhance the value of our Company by:

· improving the quality and affordability of our core menu items;

· increasing traffic in the restaurants and revitalizing the Wendy's and Arby's brands with new marketing programs, menu development and an improved customer experience;

· improving company-owned restaurant margins;

· achieving significant progress on synergies and efficiencies resulting from the Wendy's Merger;

· reducing capital spending to maximize cash flow;

· expanding the breakfast daypart at many of our restaurants over the next several years; and

· the possibility of acquiring other restaurant brands.

Our restaurant businesses have recently experienced trends in the following areas:

Revenues

· Significant decreases in general consumer confidence in the economy as well as decreases in many consumers' discretionary income caused by factors such as continuing deterioration in the financial markets and in economic conditions, including high unemployment levels and significant displacement in the real estate market, significant fluctuations in fuel costs, and high food costs;

· Increasing price competition in the quick service restaurant ("QSR") industry, as evidenced by (1) value menu concepts, which offer comparatively lower prices on some menu items, (2) the use of coupons and other price discounting,
(3) many recent product promotions focused on lower prices of certain menu items and (4) combination meal concepts, which offer a complete meal at an aggregate price lower than the price of individual food and beverage items;

· Competitive pressures due to extended hours of operation by many QSR competitors, including breakfast and late night hours;

· Competitive pressures from operators outside the QSR industry, such as the deli sections and in-store cafes of major grocery and other retail store chains, convenience stores and casual dining outlets offering prepared and take-out food purchases;

· Increased availability to consumers of product choices, including (1) healthy products driven by a greater consumer awareness of nutritional issues, (2) products that tend to offer a variety of portion sizes and more ingredients;
(3) beverage programs which offer a wider selection of premium non-carbonated beverages, including coffee and tea products and (4) sandwiches with perceived higher levels of freshness, quality and customization; and

· Competitive pressures from an increasing number of franchise opportunities seeking to attract qualified franchisees.

· Higher commodity prices which have increased our food costs during 2008, but have recently moderated;

· The recent volatility in fuel prices which, when at much higher than current levels, contributed to an increase in utility costs and distribution costs;

· Federal, state and local legislative activity, such as minimum wage increases and mandated health and welfare benefits which have and are expected to continue to increase wages and related fringe benefits, including health care and other insurance costs; and

· Legal or regulatory activity related to nutritional content or menu labeling which result in increased operating costs.

· Continued competition for development sites among QSR competitors and other businesses and higher development costs associated with those sites; and

· Tightening of the overall credit markets and higher borrowing costs in the lending markets typically used to finance new unit development and remodels. These tightened credit conditions could negatively impact the renewal of franchisee licenses as well as the ability of a franchisee to meet its commitments under development, rental and franchise license agreements.

· We experience these trends directly to the extent they affect the operations of our Company-owned restaurants and indirectly to the extent they affect sales by our franchisees and, accordingly, the royalties and franchise fees we receive from them.

Merger with Wendy's International, Inc.

On September 29, 2008, we completed the Wendy's Merger in an all-stock transaction in which Wendy's shareholders received a fixed ratio of 4.25 shares of Wendy's/Arby's Class A Common Stock for each share of Wendy's common stock owned. We expect that the Wendy's Merger will better position the Company to deliver long-term value to our stockholders through enhanced operational efficiencies, improved product offerings, and shared services. Wendy's operates, develops and franchises a system of distinctive quick service restaurants specializing in hamburgers. At September 28, 2008, there were 6,625 Wendy's restaurants in operation in the United States and in 21 other countries and U.S. territories. Of these restaurants, 1,404 were operated by Wendy's and 5,221 by Wendy's franchisees.

In the Wendy's Merger, 376.8 million shares of Wendy's/Arby's common stock, formerly Triarc Class A Common Stock, were issued to Wendy's shareholders. The equity consideration is based on the 4.25 conversion factor of the Wendy's outstanding shares at a value of $6.57 per share which represents the average closing market price of Triarc Class A Common Stock two days before and after the merger announcement date of April 24, 2008. In addition, immediately prior to the Wendy's Merger, our Class B Common Stock was converted into Class A Common Stock on a one-for-one basis (the "Conversion").

Outstanding Wendy's stock options were converted upon completion of the Wendy's Merger into stock options with respect to Wendy's/Arby's common stock, based on the 4.25:1 exchange ratio.

Our consolidated financial statements include the accounts of Wendy's subsequent to September 29, 2008.

The Deerfield Sale

On December 21, 2007, we completed the sale of our majority capital interest in Deerfield resulting in non-cash proceeds aggregating $134.6 million, consisting of 9.6 million shares of convertible preferred stock of DFR ("the DFR Preferred Stock") with a then estimated fair value of $88.4 million and $48.0 million principal amount of series A senior secured notes of DFR due in December 2012 (the "DFR Notes") with a then estimated fair value of $46.2 million. We also retained ownership of 0.2 million common shares in DFR as part of a pro rata distribution to the members of Deerfield prior to the Deerfield Sale. The Deerfield Sale resulted in a pretax gain of $40.2 million which was recorded in the fourth quarter of 2007. At December 30, 2007, the carrying value of the DFR Preferred Stock was $70.4 million, net of a deferred gain of $6.9 million for our then remaining interest in Deerfield.

The DFR Notes bear interest at the three-month LIBOR (1.47% at December 28, 2008) plus a factor, initially 5% through December 31, 2009, increasing 0.5% each quarter from January 1, 2010 through June 30, 2011 and 0.25% each quarter from July 1, 2011 through their maturity. The DFR Notes are secured by certain equity interests of DFR and certain of its subsidiaries.

Conversion of Convertible Preferred Stock and Dividend of DFR Common Stock

On March 11, 2008, DFR stockholders approved the one-for-one conversion of all its outstanding convertible preferred stock into DFR common stock which converted the 9.6 million preferred shares we held into a like number of shares of common stock. On March 11, 2008, our Board of Directors approved the distribution of our 9.8 million shares of DFR common stock, which also included the 0.2 million common shares of DFR discussed above, to our stockholders. The dividend, which was valued at $14.5 million, was paid on

April 4, 2008 to holders of record of our Class A common stock (the "Class A Common Stock") and our Class B common stock (the "Class B Common Stock") on March 29, 2008.

Other than Temporary Losses and Equity in Losses of DFR

On March 18, 2008, in response to unanticipated credit and liquidity events in the first quarter of 2008, DFR announced that it was repositioning its investment portfolio to focus on agency-only residential mortgage-backed securities and away from its principal investing segment to its asset management segment with its fee-based revenue streams. In addition, it stated that during the first quarter of 2008, its portfolio was adversely impacted by deterioration of the global credit markets and, as a result, it sold $2,800.0 million of its agency and $1,300.0 million of its AAA-rated non-agency mortgage-backed securities and reduced the net notional amount of interest rate swaps used to hedge a portion of its mortgage-backed securities by $4,200.0 million, all at a net after-tax loss of $294.3 million to DFR.

Based on the events described above and their negative effect on the market price of DFR common stock, we concluded that the fair value and, therefore, the carrying value of our investment in the 9.8 million common shares were impaired. As a result, as of March 11, 2008, we recorded an other than temporary loss which is included in "Other than temporary losses on investments," of $67.6 million (without tax benefit as described below) which included $11.1 million of pre-tax unrealized holding losses previously recorded as of December 30, 2007 which were included in "Accumulated other comprehensive income (loss)", a component of stockholder's equity. These common shares were considered available-for-sale securities due to the limited period they were to be held as of March 11, 2008 (the "Determination Date") before the dividend distribution of the shares to our stockholders. We also recorded an additional impairment charge from March 11, 2008 through the March 29, 2008 record date of the dividend of $0.5 million. As a result of the dividend, the income tax loss that resulted from the decline in value of our investment of $68.1 million is not deductible for income tax purposes and no income tax benefit was recorded related to this loss.

Additionally, from December 31, 2007 through the Determination Date, we recorded approximately $0.8 million of equity in net losses of DFR which are included in "Other expense, net" related to our investment in the 0.2 million common shares of DFR discussed above which were accounted for using the Equity Method through the Determination Date.

DFR Notes

The dislocation in the mortgage sector and continuing weakness in the broader financial market has adversely impacted, and may continue to adversely impact, DFR's cash flows. DFR reported operating losses for the first nine months of 2008. Updated financial information from DFR for the year ended December 31, 2008 will not be available until the filing of DFR's Form 10-K expected to be filed on March 16, 2009.

We have received timely and full cash payment of all four quarterly interest payments due on the DFR Notes to date. Additionally, in October 2008 we received a $1.1 million dividend payment on the convertible preferred stock which we previously held. Based on the Deerfield Sale agreement, payment of a dividend by DFR on this preferred stock was dependent on DFR's board of directors declaring and paying a dividend on DFR's common stock. The first dividend to be declared on their common stock following the date of the Deerfield Sale was declared by DFR and recognized by us in our 2008 third quarter and paid in October 2008. Certain expenses totaling $6.2 million related to the Deerfield Sale, which were a liability of the Company and for which we had an equal offsetting receivable from DFR as of December 30, 2007, were paid by DFR during the first half of 2008. Accordingly, we did not record any allowance for doubtful collection on these notes prior to the fourth quarter of 2008.

Due to significant financial weakness in the credit markets, current publicly available information of DFR, and our ongoing assessment of the likelihood of full repayment of the principal amount of the DFR Notes, we recorded an allowance for doubtful collectability of $21.2 million on the DFR Notes in the fourth quarter of 2008. This charge is included in "Other than temporary losses on investments."

Other

In early 2008, we completed the transition that was announced in April 2007 whereby we closed our New York headquarters and combined our corporate operations with our restaurant operations in Atlanta, Georgia (the "Corporate Restructuring"). To facilitate this transition, we had entered into contractual settlements (the "Contractual Settlements") with our Chairman, who was also our then Chief Executive Officer, and our Vice Chairman, who was our then President and Chief Operating Officer, (collectively, the "Former Executives") evidencing the termination of their employment agreements and providing for their resignation as executive officers as of June 29, 2007 (the "Separation Date"). In addition, we sold properties and other assets at our former New York headquarters in 2007 to an affiliate of the Former Executives and we incurred charges for the transition severance arrangements of other New York headquarters' executives and employees who continued to provide services as employees through the 2008 first quarter. The Corporate Restructuring included the transfer of substantially all of our senior executive responsibilities to the executive team of Arby's Restaurant Group, Inc. ("ARG"), a wholly-owned subsidiary of ours, in Atlanta, Georgia.

We also maintain an investment portfolio principally from the investment of our excess cash with the objective of generating investment income, including an account (the "Equities Account") which is managed by a management company (the "Management Company") formed by the Former Executives and a director, who was also our former Vice Chairman (collectively, the "Principals"). The Equities Account is invested principally in equity securities, including derivative instruments, of a limited number of publicly-traded companies. In addition, the Equities Account sells securities short and invests in market put options in order to lessen the impact of significant market downturns. Investment income
(loss) from this account includes realized investment gains (losses) from marketable security transactions, realized and unrealized gains (losses) on derivative instruments and securities sold with an obligation to purchase, other than temporary losses, interest and dividends. The Equities Account, including restricted cash equivalents and equity derivatives, had a fair value of $37.7 million as of December 28, 2008. The cost of available-for-sale securities within the Equities Account has been reduced by $12.7 million included in "Other than temporary losses on investments." The fair value of the Equities Account at December 28, 2008 excludes $47.0 million of restricted cash released from the Equities Account to Wendy's/Arby's in 2008. We obtained permission from the Management Company to release this amount from the Equities Account and we are obligated to return this amount to the Equities Account by January 29, 2010. As of February 27, 2009, as a result of continuing weakness in the economy during the first quarter of 2009 and its effect on the equity markets, there has been a decrease of approximately $3.6 million in the fair value of the available for sale securities held in the Equities Account as compared to their value on December 28, 2008.

We also had invested in several funds managed by Deerfield, including Deerfield Opportunities Fund, LLC ("the Opportunities Fund"), and DM Fund LLC ("the DM Fund"). Prior to 2006, we invested $100.0 million in the Opportunities Fund and transferred $4.8 million of that amount to the DM Fund. We redeemed our investments in the Opportunities Fund and the DM Fund effective September 29, 2006 and December 31, 2006, respectively. The Opportunities Fund through September 29, 2006 and the DM Fund through December 31, 2006 were accounted for as consolidated subsidiaries of ours, with minority interests to the extent of participation by investors other than us. The Opportunities Fund was a multi-strategy hedge fund that principally invested in various fixed income securities and their derivatives and employed substantial leverage in its trading activities which significantly impacted our consolidated financial position, results of operations and cash flows. When we refer to Deerfield, we mean only Deerfield & Company, LLC and not the Opportunities Fund or the DM Fund.

Presentation of Financial Information

Our fiscal reporting periods consist of 52 weeks ending on the Sunday closest to December 31 and are referred to herein as (1) "the year ended December 28, 2008" or "2008" which commenced on December 31, 2007 and ended on December 28, 2008 (and includes Wendy's for the fourth quarter of 2008), (2) "the year ended December 30, 2007" or "2007" which commenced on January 1, 2007 and ended on December 30, 2007 except that Deerfield is included from January 1, 2007 through its December 21, 2007 sale date, and (3) "the year ended December 31, 2006" or "2006" which commenced on January 2, 2006 and ended on December 31, 2006 except that (a) Deerfield and the DM Fund are included on a calendar year basis and (b) the Opportunities Fund is included from January 1, 2006 through its September 29, 2006 redemption date. Balances presented as of December 28, 2008 and December 30, 2007 are referred to herein as "as of Year-End 2008" and "as of Year-End 2007," respectively. With the exception of Deerfield, the Opportunities Fund, and the DM Fund, which reported on a calendar year basis, all references to years relate to fiscal periods rather than calendar periods. The difference in reporting basis in 2006 is not material.

Results of Operations

Presented below is a table that summarizes our results of operations and compares the amount of the change between 2008 and 2007 (the "2008 Change"). Certain percentage changes between these years are considered not measurable or not meaningful ("n/m").

                                                                             2008 Change
                                             2008          2007         Amount        Percent
                                                              (In Millions)
Revenues:
Sales                                      $ 1,662.3     $ 1,113.4     $   548.9          49.3 %
Franchise revenues                             160.5          87.0          73.5          84.5 %
Asset management and related fees                  -          63.3         (63.3 )      (100.0 %)
                                             1,822.8       1,263.7         559.1          44.2 %
Costs and expenses:
Cost of sales                                1,415.5         894.5         521.0          58.2 %
Cost of services                                   -          25.2         (25.2 )      (100.0 %)
General and administrative                     248.7         205.4          43.3          21.1 %
Depreciation and amortization                   88.3          66.2          22.1          33.4 %
Goodwill impairment                            460.1             -         460.1           n/m
Impairment of other long-lived assets           19.2           7.1          12.1           n/m
Facilities relocation and corporate
restructuring                                    3.9          85.4         (81.5 )       (95.4 %)
Gain on sale of consolidated business              -         (40.2 )        40.2         100.0 %
Other operating income, net                      0.7           0.2           0.5           n/m
                                             2,236.4       1,243.8         992.6          79.8 %
Operating (loss) profit                       (413.6 )        19.9        (433.5 )         n/m
Interest expense                               (67.0 )       (61.3 )        (5.7 )        (9.3 %)
Gain on early extinguishments of debt            3.6             -           3.6           n/m
Investment income, net                           9.4          62.1         (52.7 )       (84.9 %)
Other than temporary losses on
investments                                   (112.7 )        (9.9 )      (102.8 )         n/m
Other expense, net                              (0.6 )        (1.4 )         0.8          57.1 %

(Loss) income from continuing operations
before income taxes and minority
interests                                     (580.9 )         9.4        (590.3 )         n/m
Benefit from income taxes                       99.3           8.4          90.9           n/m
Minority interests in income of
consolidated subsidiaries                       (0.3 )        (2.7 )         2.4          85.2 %
(Loss) income from continuing operations      (481.9 )        15.1        (497.0 )         n/m
Income from discontinued operations, net
of income taxes:                                 2.2           1.0           1.2           n/m
Net (loss) income                          $  (479.7 )   $    16.1     $  (495.8 )         n/m

Restaurant Statistics:
Wendy's same-store sales (a):    Fourth Quarter 2008
North America Company-owned
restaurants                       3.6%
North America Franchise
restaurants                       3.8%
North America Systemwide          3.7%

                                                                             Twelve Month
                                     Fifteen Month Method          Method
Arby's same-store sales:           2008             2007               2008               2007
North America Company-owned                                           (5.8)%         (1.5%)
restaurants                      (5.8)%            (1.3)%
North America Franchised                                              (3.5)%       0.9%
restaurants                      (3.6)%              1.1%
North America Systemwide         (4.3)%              0.3%             (4.3)%       0.1%

Restaurant Margin:
                                  Fourth Quarter 2008
Wendy's                                  11.7%

                                    Full Year 2008           2007
Arby's                                   16.1%                 19.7%

Restaurant count:                   Company-owned         Franchised           Systemwide
Wendy's restaurant count (a):
Restaurant count at September                  1,404               5,221                 6,625
29, 2008
Opened since September 29, 2008                    6                  32                    38
Closed since September 29, 2008                  (5)                (28)                  (33)
Net purchased from (sold by)
franchisees since September 29,
2008                                               1                 (1)                     -
Restaurant count at December 28,               1,406               5,224                 6,630
2008
. . .