Wendy's International Inc.(WEN) on Tuesday said it will close up to 18 of its struggling Baja Fresh Mexican Grill (search) restaurants and record a write-down of up to $195 million in an attempt to reposition the company.

The Mexican themed fast-food restaurant has been among the company's most sluggish units in a chain that includes its flagship Wendy's hamburger brand and Tim Hortons (search). Earlier this year, Wendy's told Wall Street it would complete a strategic review of Baja Fresh to determine how to turn sales around.

Baja Fresh will close 15 to 18 underperforming stores during the fourth quarter, resulting in a charge of $17 million to $20 million, and will impair the asset values of restaurants in Chicago, Columbus and Nashville.

"The store closings and market impairments are decisive initiatives to position Baja Fresh for stronger performance," chairman and chief executive Jack Schuessler said in a statement. "Baja Fresh has been successful in California and in East Coast markets such as Washington, D.C., and Baltimore, but has had mixed results in other markets and declining overall comparable sales during 2004."

The company will record a fourth-quarter non-cash goodwill impairment write-down in the range of $175 million to $195 million for Baja Fresh during the fourth quarter.

Wendy's said it is also changing the menu to meet consumer trends and improve service times, with many changes launched on Nov. 9. Baja Fresh is also getting a remodeling to encourage more family-style dining.

The changes at Baja Fresh caused Wendy's to revise its guidance to Wall Street for fourth-quarter and 2004 results. During the fourth quarter, the company expects a loss in the range of $1.02 to $1.23 per share. For 2004, Wendy's now sees earnings per share in the range of 44 cents to 66 cents.

Without the goodwill charges, fourth-quarter earnings are expected to be in the range of 46 cents to 50 cents, below earnings of 56 cents last year, and 2004 earnings are projected at between $2.13 to $2.17 per share, above earnings of $2.05 a share a year ago. Analysts surveyed by Thomson First Call currently expect fourth-quarter earnings of 55 cents per share and full-year earnings of $2.22 per share.

Shares of Wendy's closed down 42 cents, or 1.16 percent, at $35.67 on the New York Stock Exchange (search).