Meritage Hospitality Group, one of the largest franchise operators for Wendy’s in the United States, filed for Chapter 11 bankruptcy protection on Thursday. The company operates 314 Wendy’s locations across 15 states, along with one Bojangles restaurant and five independently branded establishments.
The bankruptcy filing reflects broader challenges facing the Wendy’s brand, which has experienced same-store sales declines for six consecutive quarters. Industry analysts attribute the struggles to changing consumer preferences toward value-oriented dining options. Additionally, leadership instability at the corporate level, marked by multiple chief executive transitions in recent years, has resulted in unclear strategic direction. The company’s equity has depreciated substantially, losing approximately two-thirds of its value during the previous three-year period.
Meritage cited systemic pressures affecting the entire Wendy’s franchise network as a primary factor in its financial deterioration. Store-level earnings before interest, taxes, depreciation and amortization dropped 48 percent in 2025, according to statements made by Meritage CEO Bob Schermer Jr. at an investor conference in June. The franchisee faced particular pressure from rising beef procurement costs and promotional discounting strategies necessary to maintain customer traffic.
The company stated its intention to continue restaurant operations throughout the restructuring process. According to bankruptcy filings submitted to the U.S. Bankruptcy Court for the Western District of Michigan, Meritage’s assets and liabilities both fall within the $10 million to $50 million range. Wendy’s franchise business, operating under the legal entity Quality Is Our Recipe LLC, is listed as the top unsecured creditor, holding a claim of $24.9 million for deferred franchise fees.
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