Wendy's Delivers Revitalization Plan

With its sales showing signs of rejuvenation, Wendy's (WEN) outlined a broad plan Thursday to overhaul its business, and for skeptical investors, the burger chain sweetened the deal with the promise of returning $1 billion to shareholders.

The company said it plans to streamline its business and offer new menu options as part of an effort to revitalize its brand. On the trail of its larger rival, McDonald's(MCD), Wendy's said it will invest $60 million to expand the test of a new breakfast menu in its stores.

It will also offer new "indulgent" menu items as part of its "Quality Made Fresh" concept, like a double-melt cheeseburger and other "multi-flavor" sandwich options.

Over the next five years, Wendy's plans to spend $100 million buying restaurants from franchisees in order to renovate them and sell them to "proven operators." It will also sell 400 to 500 of its company-operated restaurants to franchisees over the next three years, with an ultimate goal of operating 1,000 total company restaurants.

As for returning cash to shareholders, the company's board approved the buyback of up to 35.4 million of its shares, and it also plans to launch a modified Dutch auction tender offer of up to $800 million using cash from its balance sheet. Wendy's said it will begin the tender offer and announce the price range in October.