Meritage Hospitality, one of the largest U.S. franchisees for Wendy’s, has sought Chapter 11 bankruptcy protection, reflecting the challenges faced by the fast-food chain. Wendy’s has experienced a decline in same-store sales for six consecutive quarters, as consumer preferences shift toward value-oriented options. This downturn is compounded by a series of leadership changes, leading to unclear turnaround strategies. Over the past three years, Wendy’s stock has decreased significantly, losing two-thirds of its value.
The company attributes its financial difficulties largely to the pressures on its restaurant operations under the Wendy’s brand. CEO Bob Schermer Jr. highlighted at an investor conference that store-level earnings before interest, taxes, depreciation, and amortization fell by 48% in 2025. Factors such as rising beef prices and a reliance on discounts have further pressured Meritage’s profits.
In their bankruptcy filing, Meritage expressed a desire to strengthen its balance sheet while continuing operations at its 314 Wendy’s locations across 15 states, along with a Bojangles outlet and five independently branded stores. The firm’s assets and liabilities are estimated to be between $10 million and $50 million. Quality Is Our Recipe LLC, the legal entity for Wendy’s franchise, stands as the corporation’s largest unsecured creditor, with a claim totaling $24.9 million in deferred franchise fees.
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