One of Wendy's largest U.S. franchise operators has filed for Chapter 11 bankruptcy protection, just one day after the fast-food giant moved to terminate the company's right to run its 314 restaurants.
Meritage Hospitality Group, based in Grand Rapids, Michigan, filed voluntary petitions on September 17 in the U.S. Bankruptcy Court for the Western District of Michigan. The company operates 314 Wendy's restaurants across 15 states — roughly 5.5 percent of Wendy's U.S. footprint — along with one Bojangles location and five independently branded concepts. It employs about 9,000 people and said its restaurants will keep serving guests and workers will keep being paid during the restructuring, subject to court approval.
The filing followed a dramatic breakdown in the relationship. Wendy's said Meritage owes it about $146.9 million, including roughly $27 million in past-due royalties and fees, and gave notice on September 16 of terminating the franchise agreements — one day before the bankruptcy filing. Meritage has argued the termination never took effect, leaving the agreements in place while the case proceeds.
The collapse was years in the making. Store-level earnings plunged 48 percent in 2025 to $36.2 million, hurt by weak customer traffic, aggressive value promotions that squeezed margins, elevated labor and operating costs, and sharply higher beef prices. Meritage's revenue fell about 7.6 percent in 2025 to $618 million as it swung to a loss of more than $32 million, and revenue slid another 14 percent in the first half of 2026.
The news rattled investors. Wendy's shares tumbled 3.6 percent on Friday to $6.74, and the stock has now lost about two-thirds of its value over the past three years. Wendy's has already cut its quarterly dividend to seven cents in August to preserve cash for its turnaround effort.
Sources:
Inc. — Wendy's Tried to Terminate a Franchisee's Right to Operate 314 Restaurants. It Filed for Bankruptcy a Day Later
Economic Times LK via CNBC — Wendy's franchisee files for Chapter 11 bankruptcy protection as burger chain struggles
Meritage Hospitality Group, based in Grand Rapids, Michigan, filed voluntary petitions on September 17 in the U.S. Bankruptcy Court for the Western District of Michigan. The company operates 314 Wendy's restaurants across 15 states — roughly 5.5 percent of Wendy's U.S. footprint — along with one Bojangles location and five independently branded concepts. It employs about 9,000 people and said its restaurants will keep serving guests and workers will keep being paid during the restructuring, subject to court approval.
The filing followed a dramatic breakdown in the relationship. Wendy's said Meritage owes it about $146.9 million, including roughly $27 million in past-due royalties and fees, and gave notice on September 16 of terminating the franchise agreements — one day before the bankruptcy filing. Meritage has argued the termination never took effect, leaving the agreements in place while the case proceeds.
The collapse was years in the making. Store-level earnings plunged 48 percent in 2025 to $36.2 million, hurt by weak customer traffic, aggressive value promotions that squeezed margins, elevated labor and operating costs, and sharply higher beef prices. Meritage's revenue fell about 7.6 percent in 2025 to $618 million as it swung to a loss of more than $32 million, and revenue slid another 14 percent in the first half of 2026.
The news rattled investors. Wendy's shares tumbled 3.6 percent on Friday to $6.74, and the stock has now lost about two-thirds of its value over the past three years. Wendy's has already cut its quarterly dividend to seven cents in August to preserve cash for its turnaround effort.
Sources:
Inc. — Wendy's Tried to Terminate a Franchisee's Right to Operate 314 Restaurants. It Filed for Bankruptcy a Day Later
Economic Times LK via CNBC — Wendy's franchisee files for Chapter 11 bankruptcy protection as burger chain struggles
