One of Wendy’s largest U.S. franchise operators has filed for Chapter 11 bankruptcy protection, citing mounting financial pressures tied to the fast-food chain’s prolonged sales slump and rising operating costs. The filing emphasizes the growing strain on restaurant operators as consumers pull back spending while food and labor expenses remain elevated. Workers, franchise owners and diners could all feel the effects as the restructuring unfolds, even though the company says restaurants will remain open during the bankruptcy process.
Grand Rapids, Michigan-based Meritage Hospitality Group announced Thursday that it had voluntarily filed for Chapter 11 protection in the U.S. Bankruptcy Court for the Western District of Michigan. The company said the move is intended to strengthen its balance sheet and create a sustainable capital structure while continuing operations.
Meritage operates 314 Wendy’s restaurants across 15 states, along with one Bojangles location and five independently branded restaurants. Court filings estimate assets and liabilities at between $10 million and $50 million, while Wendy’s franchise business is listed as the company's largest unsecured creditor with a claim of roughly $24.9 million in deferred franchise fees. The bankruptcy arrives as Wendy’s continues to grapple with declining traffic, increasing discounting and higher commodity costs.
Meritage executives previously said store-level EBITDA plunged 48 percent in 2025, while rising beef prices and greater promotional activity eroded profitability. Wendy's referred Newsweek to the company's statement, reading, "Our focus remains on serving our customers, supporting our franchise system, and strengthening the long-term health of the brand. We partner closely with franchisees that are experiencing challenges to support them and evaluate each situation on a case-by-case basis to identify the best and most sustainable path forward." Newsweek has reached out to Meritage Hospitality Group for comment.
Meritage Hospitality Group is one of the largest franchise operators within the Wendy’s system. Founded in 1986, the company originally owned hotels before exiting the lodging business and acquiring its first 28 Wendy’s restaurants in Michigan in 1998. Over the following two decades, Meritage expanded aggressively through acquisitions and new store development.
The company acquired dozens of Wendy’s locations across multiple regions and, by 2023, had grown to approximately 375 Wendy’s restaurants. Beyond its Wendy’s holdings, the operator launched its Morning Belle brunch chain and diversified into several independent restaurant brands. That expansion strategy made Meritage heavily exposed to Wendy’s corporate performance.
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