Meritage Hospitality’s Restaurants to Stay Open While Restructuring
- Michigan-based Meritage Hospitality Group, which operates 314 Wendy’s restaurants, has filed for Chapter 11 bankruptcy and plans to restructure.
- The entire Wendy’s chain is struggling, with same-store sales falling for the last six quarters.
- Meritage had already initiated efforts to stabilize, including closure of 60 Wendy’s locations.
- Several major fast-food franchisees have filed for bankruptcy protection this year.
Meritage Hospitality Group, one of Wendy’s biggest U.S. franchisees, has filed for Chapter 11 bankruptcy protection. “Because the substantial majority of Meritage’s restaurant portfolio operates under Wendy’s brand, those system-wide pressures have had a significant impact on the company’s financial position,” Meritage said in a news release that disclosed the filing.
Meritage operates 314 Wendy’s in 15 states across the Southeast and Midwest, and all of those stores will stay open during restructuring aimed at bolstering the franchisee group’s balance sheet, CNBC reported Friday. Meritage’s Wendy’s represent about 5% of the brand’s total U.S. system, RestaurantDive.com noted in an article about the bankruptcy. The Grand Rapids, Mich.-based franchisee group also owns one Bojangles location and five independently branded stores.
Wendy’s Struggles
Wendy’s has reported decreases in same-store sales for six consecutive quarters. In addition, the value of Wendy’s stock has fallen by two-thirds during the last three years. CNBC noted that Meritage CEO Bob Schermer Jr. told attendees at a June investor conference that store-level earnings before interest, taxes, depreciation and amortization had plummeted 48% in 2025.
The burger chain as a whole has struggled to combat rising costs, especially for beef, while customer traffic decreased. A steady churn in CEOs during the past few years has prompted the formulation of various turnaround plans that also have contributed to the chain’s decline, CNBC said. Some of the plans were designed to woo customers with steeply discounted menu items, and the discounts further dented restaurant revenue.
Meritage’s Restructuring Efforts
In its filing with the U.S. Bankruptcy Court for the Western District of Michigan, Meritage estimated that its assets are valued at $10 million to $50 million, with liabilities within the same range. Quality Is Our Recipe LLC, the legal name for Wendy’s franchise business, is listed as its top unsecured creditor with a claim of $24.9 million for deferred franchise fees. Meritage Hospitality owes $150 million to City National Bank, which declared that debt in default last year, according to Nation’s Restaurant News.
Meritage has closed 60 underperforming stores in a move to strengthen its remaining holdings and either ended or altered breakfast service in more than 100 underperforming locations, RestaurantDive.com reported. Wendy’s has approved these changes, the online magazine said.
In March, Meritage also tested catering at 150 restaurants followed by a full rollout in May, RestaurantDive.com said. The catering program requires an order for at least 10 people, and checks have averaged $500.
But the measures were not enough to avoid the bankruptcy filing. The Meritage news release said the leadership team “determined that a voluntary, court-supervised restructuring is the most effective and proactive path to strengthen Meritage’s finances, address these headwinds directly, and protect the long-term interests of its stakeholders, team members, guests and communities.” Meritage’s statement also said the franchisee group’s leaders have “a high level of confidence in the opportunity for a brand turnaround.”
Fast-Food Franchisee Pressures
Meritage is far from alone as a fast-food franchisee in bankruptcy proceedings. Earlier this year, franchisees from Carl’s Jr., Hardee’s and Popeyes filed for bankruptcy protection, RestaurantDive.com said.
Yet many fast-food brands have managed to counter economic challenges more effectively. In March 2026, ResearchAndMarkets.com reported the global value of the quick-service restaurant exceeded $658 billion last year and is growing. Compound annual growth is expected to be 5.7% through 2030, which would bring the market to more than $868 billion, according to the online market research aggregator.
Key drivers of growth include urbanization, busy lifestyles and franchising proliferation along with the affordability and widespread expansion of fast-food brands, Research and Markets said. It cited McDonald’s, Burger King, Chipotle, Subway and Starbucks as top performers among quick-service restaurant brands.
