From CNBC · Amelia Lucas · · 1m 40s
Wendy's major franchisee files for bankruptcy
Meritage Hospitality, operating 314 Wendy's locations, seeks Chapter 11 protection as the chain struggles with six quarters of declining sales.
In brief
Meritage Hospitality, operating 314 Wendy's locations, seeks Chapter 11 protection as the chain struggles with six quarters of declining sales. Major franchisees are buckling under pressure from weak sales and rising costs, signaling deeper trouble for Wendy's turnaround efforts. Originally reported by CNBC.
Major Wendy's franchisee files for bankruptcy
Meritage Hospitality, one of Wendy's largest U.S. franchisees, filed for Chapter 11 bankruptcy protection on Thursday. The company operates 314 Wendy's restaurants across 15 states.
Wendy's sales have declined for six straight quarters
The burger chain has reported same-store sales declines for six consecutive quarters as diners increasingly focus on value. The company's stock has lost two-thirds of its value over the past three years.
Leadership changes muddled turnaround strategy
A revolving door of chief executives in recent years has led to confused turnaround strategies at Wendy's. The instability has contributed to the chain's struggle to win back customers.
Store earnings plummeted 48 percent in 2025
Meritage CEO Bob Schermer Jr. reported that store-level earnings before interest, taxes, depreciation and amortization fell 48 percent in 2025. Rising beef costs and increased discounts squeezed franchisee profits.
Meritage plans to keep restaurants open during restructuring
Meritage filed for bankruptcy to strengthen its balance sheet while continuing operations. The company estimates assets and liabilities each between 10 million and 50 million dollars.
Wendy's franchise fees top creditor claims
Quality Is Our Recipe LLC, Wendy's franchise business, is listed as Meritage's top unsecured creditor with a claim of 24.9 million dollars for deferred franchise fees. This highlights the financial strain on the franchisee.
The one thing
Major franchisees are buckling under pressure from weak sales and rising costs, signaling deeper trouble for Wendy's turnaround efforts.
