Close-up of fast food packaging with Wendy’s logo.
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Meritage Hospitality, one of Wendy’s largest U.S. franchisees, filed for Chapter 11 bankruptcy protection on Thursday.
The filing comes as the burger chain has struggled to win over diners who have become increasingly focused on value. For six straight quarters, Wendy’s has reported same-store sales declines. A revolving door of chief executives in recent years has led to muddled turnaround strategies, and its stock has lost two-thirds of its value over the last three years.
“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 press release announcing the filing.
At an investor conference in June, Meritage CEO Bob Schermer said that store-level earnings before interest, taxes, depreciation and amortization had plummeted 48% in 2025. Rising beef costs and increased discounts weighed on the franchisee’s profits.
Meritage said it filed for bankruptcy to strengthen its balance sheet, and the company plans to keep its restaurants running during the restructuring process. Meritage operates 314 Wendy’s restaurants across 15 states, as well as one Bojangle’s location and five independently branded stores.
Meritage estimated that its assets are valued at $10 million to $50 million, with liabilities within the same range, according to a filing with the Bankruptcy Court of the Western District of Michigan. Quality Is Our Recipe LLC, the legal name for Wendy’s franchise business, is listed as its top unsecured creditor with a claim of $24.9 million for deferred franchise fees.
