Wendy’s Franchisee Bankruptcy Fuels Concerns Over Food Prices

One of Wendy's largest U.S. franchise operators, Meritage Hospitality Group, has filed for Chapter 11 bankruptcy protection, according to court filings. The move comes amid mounting financial pressures tied to the fast-food chain's ongoing sales decline and rising operating costs. Meritage operates 314 Wendy's restaurants across 15 states, along with a Bojangles location and five independently branded restaurants.

The bankruptcy filing estimates the company's assets and liabilities at between $10 million and $50 million, with Wendy's franchise business listed as the largest unsecured creditor with a claim of approximately $24.9 million in deferred franchise fees.

Meritage's executives noted that the company's store-level EBITDA plunged 48% in 2025, as rising beef prices and increased promotional activity eroded profitability. The restructuring aims to strengthen the balance sheet and create a sustainable capital structure while continuing operations. Court documents indicate that the company will maintain restaurant-level operations during the bankruptcy process and continue paying wages and benefits to its approximately 9,000 employees, pending court approval.

The bankruptcy filing arrives as Wendy's continues to grapple with declining traffic, increasing discounting, and higher commodity costs. Meritage Chief Executive Officer Michael Poole previously stated that the company partners closely with franchisees experiencing challenges to support them and evaluate each situation individually to identify the best path forward.

Wendy's has reaffirmed its commitment to serving customers, supporting its franchise system, and strengthening the brand's long-term health. However, no widespread closure plan has been announced yet.