Wendy’s Franchise Operator of 314 U.S. Locations Files for Bankruptcy

Meritage Hospitality Group, one of Wendy’s biggest U.S. franchise operators, has sought bankruptcy protection after the fast-food chain moved to end its franchise agreement with the company.

The Grand Rapids, Michigan-based company runs 314 Wendy’s restaurants across 15 states. In a statement issued last week, Meritage said its restaurants would remain open and that it planned to continue paying roughly 9,000 employees throughout the bankruptcy proceedings.

Meritage filed its petition Sept. 17 in federal bankruptcy court in western Michigan. Court records show Wendy’s delivered notice the previous day that it was terminating the franchise agreement “effective immediately.”

According to court filings, Wendy’s says Meritage owes $27.4 million in royalties and other fees, along with $119.5 million in continuous operations fees. Those charges can be assessed when franchisees shut down restaurants. Meritage closed 60 underperforming Wendy’s locations late last year as part of a broader restructuring effort.

Asked Monday about the bankruptcy filing, Wendy’s said it is focused on “strengthening the long-term health of the brand.”

The company added that it works closely with struggling franchisees, reviewing each situation individually while seeking what it considers the most sustainable path forward.

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Michigan is Meritage’s largest operating market, with 54 Wendy’s restaurants, along with five Morning Belle and Blue Porch Bar & Grill locations. The franchisee also operates 44 Wendy’s restaurants in Georgia and Florida, 29 in Connecticut, 24 in Tennessee and 23 in Oklahoma. It has fewer than 20 locations in each of Arkansas, Indiana, Massachusetts, Mississippi, Missouri, North Carolina, Ohio, Texas and Virginia.

Wendy’s, based in Dublin, Ohio, has faced mounting pressure from aging restaurants, elevated beef costs and intense competition. The chain closed 240 locations in 2024 and said earlier this year that it could shut as many as 358 more restaurants during the current year.

U.S. same-store sales at Wendy’s dropped 7% in the company’s most recent quarter.

“Wendy’s is an iconic brand with exceptional assets. Today we are clearly not performing at our potential,” President and CEO Bob Wright said in a statement last month. Wright took over at Wendy’s in May after previously serving as CEO of Potbelly.