Wendy’s is closing more stores: See a list of doomed locations from a major franchisee in ongoing bankruptcy
A sprawling Wendy’s franchisee that sought Chapter 11 bankruptcy protection earlier this month could close as many as 30 restaurants over the next few weeks as part of a cash collateral agreement, new court filings reveal. Meritage Hospitality Group, which operates 314 Wendy’s locations across 15 states, says it has already identified five unprofitable stores that it planned to shut down and…
Wendy's franchisee Meritage Hospitality Group may close up to 30 stores in the coming weeks, as reported in new court filings. The franchisee, which operates 314 locations across 15 states, has already identified five underperforming restaurants in Virginia, Florida, Texas, and Oklahoma that will close this weekend. According to the bankruptcy agreement, Meritage is seeking to cancel leases and franchise agreements for the problematic stores to restructure its operations.
The impacted Wendy's restaurants are located in four states. These closures are described as "adequate protection" for Meritage's lenders in exchange for the use of cash collateral. The franchisee owes over $135 million to one of its lenders, and the store closures are part of the cash collateral agreement. The remaining stores to close will be done on a rolling schedule through October 16, with at least 30 additional stores affected in total.
The closures come amid broader challenges facing the Wendy's brand, including a 7% drop in U.S. same-store sales during the second quarter and CEO Bob Wright's admission that the brand has fallen short on marketing efforts.
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