One of the Biggest Wendy’s Franchisees Just Filed for Bankruptcy, Here’s What’s Going On

Wendy’s has been under pressure as U.S. fast-food chains contend with weaker traffic, higher food costs, and value-focused consumers. That pressure sharpened this week when Meritage Hospitality Group, one of the brand’s largest franchisees, sought bankruptcy protection. The Grand Rapids, Michigan-based operator said it plans to keep restaurants open while it restructures.

Meritage filed for Chapter 11 with 314 Wendy’s restaurants in its portfolio

Meritage Hospitality Group announced on September 17 that it had voluntarily filed for Chapter 11 protection in the U.S. Bankruptcy Court for the Western District of Michigan. The company said it operates 314 Wendy’s restaurants, one Bojangles location, and five independently branded concepts across 15 states. According to its announcement, the filing is intended to strengthen its balance sheet and create more financial flexibility while operations continue.

Industry publication Nation’s Restaurant News, citing court documents, reported that Meritage listed between $10 million and $50 million in assets and between $10 million and $50 million in liabilities in the initial filing. The same report said the company owes about $150 million to City National Bank, which had declared that debt in default last year. Meritage had already hired restructuring specialist Kevin Cleary as CEO earlier in 2026 as it worked with lenders on a forbearance arrangement.

The filing followed a significant retrenchment earlier this year. Nation’s Restaurant News reported that Meritage had closed 60 Wendy’s locations months before the bankruptcy, tying that move to weak performance across the Wendy’s system. In a statement carried by multiple outlets, Wendy’s said its focus remains on customers, franchisees, and the long-term health of the brand, and that it evaluates challenged operators on a case-by-case basis.

Michigan is central to the filing, but a full location-by-location impact list is not public

The bankruptcy has a clear Michigan center because Meritage is headquartered in Grand Rapids and remains one of the state’s biggest Wendy’s operators. Local reporting in West Michigan said the company owns 54 Wendy’s restaurants in Michigan, along with its Morning Belle breakfast locations. Meritage also said in its public statement that it employs about 9,000 workers across its restaurant footprint.

What is confirmed so far is the companywide scale of the restructuring, not a complete location-by-location list of restaurants that could be affected next. The company has not released a comprehensive public list of which Michigan Wendy’s restaurants were included in the earlier 60-store closure round, and it has not announced a new round of specific Michigan closures tied directly to the Chapter 11 filing. Court filings and company statements have focused instead on continuing operations during the restructuring process.

For customers in Michigan and other Meritage markets, that means the immediate picture is limited. Restaurants are expected to keep operating while the bankruptcy case proceeds, and the company said it intends to honor commitments to guests and pay suppliers and vendors in the ordinary course for post-filing goods and services. Beyond that, any store-by-store changes would likely emerge later through court proceedings or separate company announcements.

Weak Wendy’s sales, higher costs, and debt strain are at the center of the case

Meritage and industry reporting have pointed to a combination of falling sales and rising operating costs behind the filing. Nation’s Restaurant News reported that Wendy’s same-store sales have declined for six straight quarters, including a 7% drop in the most recent quarter, while two-year same-store sales were down more than 10% so far this year. Wendy’s second-quarter earnings release also reported a 7.0% decline in same-restaurant sales, underscoring the broader brand slowdown.

Meritage disclosed that its store-level EBITDA fell 48% last year to $36.2 million, according to the restaurant trade report and company disclosures. The company also said its beverage contract came up about $11 million short, adding to liquidity pressure as it sought lender forbearance. At the same time, executives cited higher costs, especially for beef, and broader pressure on discretionary consumer spending in quick-service restaurants.

The company has already taken corrective steps before resorting to Chapter 11. Meritage said it stopped or altered breakfast service at underperforming locations to improve margins, and it framed the court process as part of a longer-term restructuring. For customers, the practical takeaway is that Wendy’s restaurants operated by Meritage are expected to stay open for now as the case moves forward, while the company and the brand work through what Meritage described as an opportunity for a turnaround.