Key facts
- Meritage Hospitality Group, a large Wendy's franchisee, filed for Chapter 11 bankruptcy on September 17.
- The company operates 314 Wendy's locations in 15 states.
- Reasons cited for the filing include an 11.3% decrease in same-store sales in late 2025 and record U.S. beef prices.
- The franchisee's average cost of beef increased by 18.9% year-over-year.
- Meritage Hospitality Group plans to restructure, which may involve closing or selling underperforming locations.
- The company owes Wendy's International nearly $25 million.
Meritage Hospitality Group, one of Wendy's largest franchisees, has filed for Chapter 11 bankruptcy protection due to profitability issues and rising beef costs. The company, which operates 314 Wendy's locations across 15 states, filed its petition on September 17 in the U.S. Bankruptcy Court for the Western District of Michigan.
In court documents, Meritage cited an 11.3% decline in same-store sales during the final quarter of 2025, adverse weather conditions, and record U.S. beef prices as key factors contributing to its financial distress. The increase in beef costs was attributed to historically low herd levels, a temporary shutdown of Mexican border beef imports, and tariffs on South American beef, resulting in an 18.9% rise in the company's average beef expenses compared to the previous year.
Meritage Hospitality Group owes Wendy's International nearly $25 million and plans to explore restructuring options, which could include closing or selling underperforming restaurants while aiming to preserve jobs and operations. The company also indicated that reduced effectiveness of Wendy's brand marketing contributed to its financial challenges. Wendy's International stated it partners closely with franchisees experiencing challenges to find the best path forward.