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Wendy's Franchisee With 314 Stores Files for Bankruptcy, Owes Wendy's $25 Million
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Meritage Hospitality Group, one of Wendy's largest franchisees operating 314 restaurants across 15 states, filed for Chapter 11 bankruptcy in September 2026. The filing lists Quality Is Our Recipe LLC, Wendy's franchise business, as the top unsecured creditor owed $24.9 million in deferred franchise fees. The bankruptcy follows a difficult period for Wendy's, which has reported same-store sales declines for six consecutive quarters and seen its stock lose two-thirds of its value over three years. Meritage CEO Bob Schermer Jr. stated at an investor conference in June that store-level earnings dropped 48% in 2025, attributing the decline to rising beef costs and heavier discounting. Meritage said system-wide pressures under the Wendy's brand significantly impacted its financial position. The company estimated its assets and liabilities between $10 million and $50 million each. Meritage plans to keep its restaurants operating through the restructuring process, including its one Bojangles and five independently branded locations.
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Author: Jon Small Source: Entrepreneur Media LLC / Yahoo Finance LLC
One of Wendy’s largest franchisees has filed for bankruptcy, and the fast-food chain is seeking repayment of millions in deferred fees.
Meritage Hospitality Group, which operates 314 Wendy’s restaurants across 15 states, filed for Chapter 11 bankruptcy protection late last week, according to CNBC. Quality Is Our Recipe LLC, Wendy’s franchise business, is listed as Meritage’s top unsecured creditor, owed $24.9 million in deferred franchise fees.
The filing follows a difficult period for the burger chain. Wendy’s has reported same-store sales declines for six consecutive quarters, and its stock has lost two-thirds of its value over the past three years.
At an investor conference in June, Meritage CEO Bob Schermer Jr. said store-level earnings had dropped 48% in 2025, citing rising beef costs and increased discounting.
“Because the substantial majority of Meritage’s restaurant portfolio operates under Wendy’s brand, those system-wide pressures have had a significant impact on the Company’s financial position,” Meritage said in a statement.
Meritage estimated its assets and liabilities each fall between $10 million and $50 million. The company plans to keep its restaurants operating through the restructuring process, along with its one Bojangles location and five independently branded restaurants.
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Meritage Hospitality Group files Chapter 11 bankruptcy after Wendy's termination dispute