One of Wendy’s largest US franchise operators has filed for Chapter 11 bankruptcy protection, putting hundreds of restaurants at the center of a major restructuring battle involving the fast-food chain.
Meritage Hospitality Group, which operates 314 Wendy’s restaurants across 15 states, filed for bankruptcy protection on Sept. 17 in the US Bankruptcy Court for the Western District of Michigan. The company said it intends to keep its restaurants operating and continue paying its roughly 9,000 employees while it restructures its finances.
The filing came just one day after Wendy’s moved to terminate Meritage’s franchise agreements, escalating a dispute over unpaid fees and the future of the restaurants.
According to court filings, Wendy’s says Meritage owes about $27.4 million in royalties and other fees, along with another $119.5 million in continuous operations fees linked to restaurants that were closed. Meritage disputes Wendy’s effort to terminate its franchise rights.
The dispute follows a difficult period for Meritage. The company closed about 60 underperforming Wendy’s restaurants late last year as part of efforts to reduce costs and improve its financial position.
Meritage has also pointed to broader pressures affecting the Wendy’s system, including higher beef costs, changes in promotional strategies and weaker customer traffic. Its store-level earnings declined sharply in 2025, adding to the financial strain on the franchise operator.
The bankruptcy does not automatically mean all 314 Wendy’s restaurants will close. Chapter 11 is designed to allow a company to continue operating while reorganizing its debts under court supervision.
Meritage has said it expects restaurant operations to continue during the restructuring and has sought financing that would provide additional liquidity while the bankruptcy case proceeds.
However, the future of the Wendy’s locations remains tied to the separate dispute over the franchise agreements.
Wendy’s has argued in court that Meritage’s bankruptcy filing does not prevent the termination of its franchise rights. The company has indicated that the affected restaurants could eventually be transitioned to Wendy’s corporate operations or other franchisees, although it has also allowed for a temporary arrangement while those locations are transitioned.
The situation adds another challenge for Wendy’s, which has been attempting to reverse a prolonged decline in its US business.
The chain has been dealing with falling same-store sales, intense competition and higher operating costs. Wendy’s closed hundreds of restaurants in recent years and has continued evaluating underperforming locations as part of its broader turnaround efforts.
Wendy’s US same-store sales fell 7% in its latest quarter, according to the Associated Press, while the company has said it plans to close as many as 358 locations during 2026.
Meritage’s footprint is significant. Its Wendy’s restaurants account for a substantial portion of its business and represent roughly 5% of Wendy’s US restaurant system.
The franchisee operates locations in Michigan, Georgia, Florida, Connecticut, Tennessee, Oklahoma and several other states, meaning the restructuring could affect Wendy’s operations across a broad section of the country.
For customers, the immediate situation is less dramatic than the bankruptcy headline may suggest: Meritage has said its restaurants are expected to remain open during the restructuring.
But the bigger question is what happens after the temporary operating period.
If Wendy’s succeeds in ending Meritage’s franchise rights, hundreds of restaurants could eventually change operators, be sold, closed or transferred to new franchisees. That could make the outcome of the bankruptcy case an important test for both Meritage and Wendy’s as the burger chain tries to reshape its US restaurant network.
The next phase of the court battle could determine whether these 314 Wendy’s restaurants remain under the same operator — or become part of a much larger shake-up of the brand’s American footprint.
