Major Wendy’s franchisee declares bankruptcy

Wendy's franchisee Meritage Hospitality Group has declared bankruptcy, according to a press release. The company operates 314 Wendy's restaurants, along with a Bojangles and five other brands across 15 states. Chapter 11 bankruptcy proceedings were initiated in the Western District of Michigan. Meritage stated it intends to continue operating restaurants and pay its 9,000 employees without disruption.

The financial setbacks include double-digit same-store sales declines over recent quarters and a 30-year low in store-level EBITDA of 48%. The company has reduced expenses by over $7 million through internal restructuring. Meritage also exited breakfast or altered it in about 120 underperforming locations, which resulted in an EBITDA margin benefit of over $11 million.

Despite these steps, the company believes a voluntary, court-supervised restructuring is the best course of action to address headwinds and protect stakeholders, team members, guests, and communities.