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One of Wendy’s biggest franchisees just went bankrupt, and Wendy’s wants its money back. Meritage Hospitality Group, which operates 314 Wendy’s restaurants across 15 states, filed for Chapter 11 bankruptcy late last week, CNBC reports. Quality Is Our Recipe LLC, Wendy’s franchise business, is listed as Meritage’s top unsecured creditor. It’s owed $24.9 million in deferred franchise fees.
The filing comes after a brutal stretch for the burger chain. Wendy’s has reported same-store sales declines for six straight quarters, and its stock has lost two-thirds of its value over the past three years. At an investor conference in June, Meritage CEO Bob Schermer Jr. said store-level earnings had plummeted 48% in 2025, blaming rising beef costs and heavier discounting.
“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 statement.
Meritage estimated its assets and liabilities each fall between $10 million and $50 million. The company plans to keep its restaurants running through the restructuring process, along with its one Bojangles and five independently branded locations.