Wendy’s Franchisee Bankruptcy Puts 9,000 Jobs at Risk

Meritage Hospitality Group, which operates 314 Wendy’s restaurants across 15 states, has filed for Chapter 11 bankruptcy protection, citing mounting debt and pressure from rising beef and other operating costs, weak sales and discounting. The franchisee says it intends to keep operating while it restructures, but a cash-collateral agreement with lenders requires it to close at least 30 unprofitable restaurants; five locations in Virginia, Florida, Texas and Oklahoma were identified for closure first. Meritage has asked to use available cash to pay employees and essential expenses, while Wendy’s franchise-services subsidiary has sought permission to suspend support to its restaurants—a move Meritage says could undermine its restructuring. The bankruptcy involves one franchise operator, not Wendy’s as a whole, and puts about 9,000 Meritage employees in the restructuring’s orbit. The case highlights broader strain on franchise operators amid rising costs and soft customer traffic, while the company’s restructuring could preserve stronger locations and reduce its debt.