1 hr ago
Wendy’s Franchisee Bankruptcy Puts 314 Restaurants’ Futures Uncertain
Meritage Hospitality Group runs 314 Wendy’s restaurants in 15 US states.
It has filed for bankruptcy protection because its sales and profits have been under pressure.
The company says it owes Wendy’s nearly $25 million, while Wendy’s says the unpaid amount is more than $27 million.
Wendy’s ended Meritage’s franchise agreements just before the bankruptcy filing.
Meritage wants to keep operating the restaurants while it reorganizes its business.
Wendy’s says Meritage no longer has the contract needed to run the restaurants.
Wendy’s may allow a short-term license while deciding what happens next.
Some restaurants could be transferred to other owners, sold or closed.
The companies and the court must now determine who can operate the locations.
Meritage Hospitality Group filed for Chapter 11 bankruptcy protection on September 17 in Michigan.
The franchisee operates 314 Wendy’s restaurants across 15 US states and owes millions in unpaid fees.
Meritage reported declining sales, rising costs and an 18.9% increase in average beef expenses.
Wendy’s subsidiary Quality Is Our Recipe terminated Meritage’s franchise agreements one day before the filing.
The restaurants could remain open temporarily, transfer to other franchisees, be sold or close.
- Who
- Meritage Hospitality Group, Wendy’s International and Wendy’s subsidiary Quality Is Our Recipe.
- What
- Meritage filed for Chapter 11 bankruptcy while disputing whether it can continue operating 314 Wendy’s restaurants after its franchise agreements were terminated.
- Where
- The bankruptcy case was filed in the US Bankruptcy Court for the Western District of Michigan, and the restaurants are located across 15 US states.
- When
- Meritage filed on September 17; the franchise agreements were terminated one day earlier.
- Why
- Meritage cited declining sales, weaker traffic, higher operating costs, rising beef prices and margin pressure from discounting and promotions.
Meritage’s Position
Wendy’s Position
Continued restaurant operations
Meritage’s Position
Meritage wants to keep operating its restaurants while it restructures through bankruptcy.
Wendy’s Position
Wendy’s argues that Meritage no longer has the contractual right to operate the restaurants because the franchise agreements were terminated.
Short-term operating arrangement
Meritage’s Position
Meritage is evaluating its options as it seeks to preserve jobs and restaurant operations across its footprint.
Wendy’s Position
Wendy’s says it may provide a short-term license, but wants prompt payments under terms similar to the terminated agreements.
Future of the locations
Meritage’s Position
Meritage may restructure by selling or closing underperforming restaurants while attempting to preserve the business.
Wendy’s Position
Wendy’s is considering transferring restaurants to itself or other franchisees and strengthening the long-term health of its franchise system.
Key facts
- Bankruptcy type
- Chapter 11 protection
- Restaurants affected
- 314 Wendy’s locations
- Geographic footprint
- 15 US states
- Reported debt
- Meritage said it owed Wendy’s International nearly $25 million; Quality Is Our Recipe said past-due obligations exceeded $27 million.
- Same-store sales
- Down 11.3% during the final quarter of 2025
- Beef costs
- Meritage’s average beef cost rose 18.9% year over year
- Potential outcomes
- Restaurants may continue under a temporary license, transfer to other franchisees, be sold or close
Sources
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