Large Wendy's Franchisee Files for Chapter 11 Amid Chain's Sales Slump -- WSJ
Dow Jones2026/09/18 18:34By Samantha Kroontje
Meritage Hospitality Group, one of Wendy's largest U.S. franchise operators, filed for chapter 11 Thursday following more than a year of unsuccessful out-of-court restructuring efforts with lenders and its franchiser.
The Michigan-based operator of 314 Wendy's restaurants said that the fast-food chain accounts for the vast majority of its portfolio and has weighed on Meritage's finances.
Meritage, which entered court protection in the U.S. Bankruptcy Court for the Western District of Michigan, is seeking debtor-in-possession financing to keep its restaurants open and continue paying employees while it restructures, according to the company.
Meritage's financial condition deteriorated sharply over the past year, weighed down by the Wendy's outlets' 48% drop in store-level earnings before interest, taxes, depreciation and amortization in 2025, driving restaurant-level profitability to a 30-year low. The company attributed the decline to rising beef costs, aggressive discounting strategies under Wendy's former management and marketing missteps.
During the comparable period, Wendy's reported a 7.8% drop in same-restaurant sales in the U.S., as competitors such as McDonald's, Burger King and Taco Bell posted gains, according to a Meritage presentation at its investor meeting in May.
Meritage began operating under a forbearance agreement with its lenders early this year after seeking temporary relief from debt payments, according to the presentation. The company said it had resumed full interest payments as Wendy's sought to revive sales under new Chief Executive Robert Wright.
Court papers showed the franchisee owes nearly $25 million in deferred franchise fees to a Wendy's affiliate, making it the largest unsecured creditor.
A spokesperson for Wendy's said Friday the company works closely with franchisees "that are experiencing challenges to support them and evaluate each situation on a case-by-case basis."
In addition to its core Wendy's footprint, Meritage operates six other locations, including one Bojangles fast-food restaurant.
McDonald Hopkins is serving as Meritage's legal counsel and Fort Dearborn Partners is its restructuring adviser. The case, numbered 26-02947, has been assigned to Judge James Boyd.
Write to Samantha Kroontje at samantha.kroontje@wsj.com
(END) Dow Jones Newswires
September 18, 2026 14:34 ET (18:34 GMT)
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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