A close-up of a fast food package with the Wendy’s logo.
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Meritage Hospitality wendy’s The nation’s largest franchisee filed for Chapter 11 bankruptcy protection on Thursday.
The filing comes as burger chains struggle to win over diners who are increasingly value-conscious. Wendy’s has reported same-store sales declines for six consecutive quarters. A revolving door of chief executives in recent years has muddied the turnaround strategy, and the company’s stock has lost two-thirds of its value over the past three years.
“As the majority of Meritage’s restaurant portfolio is operated under the Wendy’s brand, these system-wide pressures are having a material impact on the company’s financial condition,” Meritage said in a press release announcing the filing.
At an investor conference in June, Meritage CEO Bob Shermer Jr. said store-level profits before interest, taxes, depreciation and amortization will plummet 48% in 2025. Rising beef costs and increased discounts have squeezed franchisees’ profits.
Meritage said it filed for bankruptcy to shore up its balance sheet and plans to keep its restaurants open during the restructuring process. Meritage operates 314 Wendy’s restaurants in 15 states, as well as one Bojangles’ store and five independent brand stores.
According to filings with the U.S. Bankruptcy Court for the Western District of Michigan, Meritage estimates its assets are worth between $10 million and $50 million, and its liabilities in the same range. Quality Is Our Recipe LLC, the legal name for Wendy’s franchise business, is listed as the lead unsecured creditor seeking $24.9 million in deferred franchise fees.
