One of Wendy’s largest franchisees has filed for bankruptcy because of profitability issues and record beef prices, according to court documents filed this month.
Meritage Hospitality Group, which owns 314 Wendy’s locations in 15 states, filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Western District of Michigan on Sept. 17.
The franchisee said in court documents that it owes Wendy’s International nearly $25 million.
While the recent filing is from a franchisee, the announcement comes after Wendy’s announced plans beginning in late 2025 to close about 300 stores nationwide.
Wendy’s has since reported opening 44 U.S. restaurants during the first and second quarters of 2026.
USA TODAY contacted Meritage Hospitality Group on Sept. 21 to get more information on potential closures.
Wendy’s said in a statement to USA TODAY on Sept. 21 that the company is focused 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,” the company said.
What the Bankruptcy Could Mean for Wendy’s Locations
The company said in court documents that it plans to weigh its options and restructure, which could mean closing or selling underperforming locations.
The company noted that it is working on “preserving jobs and restaurant operations across the 15-state footprint.”
It owes 1,000 to 5,000 creditors, while its assets and liabilities range from $10 million to $50 million, according to documents reviewed by USA TODAY.
Why the Wendy’s Franchisee Filed for Bankruptcy
Part of the reason for the bankruptcy filing was an 11.3% decrease in same-store sales during the final quarter of 2025 and unusual winter weather linked to the La Niña cycle in the southern United States, the company said in court documents.
The company also cited reduced effectiveness of Wendy’s brand marketing, which Wendy’s previously managed.
It also cited record U.S. beef prices tied to:
- Historically low herd levels.
- A shutdown of Mexican border beef imports because of disease.
- Tariffs on beef from South America, which contributed to an 18.9% increase in the company’s average beef cost compared with the previous year.
The company has 8,850 employees and has asked for permission to pay wages, other compensation, reimbursable expenses and continue honoring its employee benefits programs, according to court documents.
It has also asked for permission to continue honoring Wendy’s gift cards and loyalty programs.
Where Meritage’s Restaurants Are Located
Meritage Hospitality Group runs 320 fast-food and casual-dining restaurants across 15 states.
Of those restaurants, 314 are Wendy’s locations, with most concentrated in Florida, Georgia and Michigan.
- Arkansas – 8
- Connecticut – 29
- Florida – 44
- Georgia – 44
- Indiana – 13
- Massachusetts – 13
- Michigan – 54
- Mississippi – 7
- Missouri – 4
- North Carolina – 16
- Ohio – 12
- Oklahoma – 23
- Tennessee – 24
- Texas – 11
- Virginia – 12
The company’s other franchised restaurants include one Bojangles restaurant, as well as Morning Belle and Blue Porch Bar & Grill locations, according to court documents.
From Hotel Operator to Fast-Food Franchisee
Meritage Hospitality Group previously ran hotels. Its relationship with Wendy’s began in Michigan in 1998, when the business bought 28 Wendy’s restaurants, according to court documents.
The company continued to grow its Wendy’s portfolio and, over a seven-year period beginning in 2011, bought 234 more restaurants, bringing its total number of Wendy’s locations to 317.
The publicly traded company won the 2022 Wendy’s Monument Award for “Visionary Growth and Expansion” in the large franchise category.
The company previously ran seven Taco John’s quick-service restaurants, but they closed in September 2024, court documents show.
In July 2025, the company agreed with Bojangles to build 15 new restaurants by April 2031. It opened its first Bojangles restaurant in Michigan in February 2026, according to court documents.
Contributing: Mary Walrath-Holdridge, USA TODAY. This article originally appeared on USA TODAY. Reporting by Saleen Martin, USA TODAY / USA TODAY. USA TODAY Network via Reuters Connect.
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