Wendy's biggest US franchisee files for Chapter 11

Meritage Hospitality bankruptcy: Wendy's largest US franchisee filed for Chapter 11 protection on September 17, 2026, after a year in which store-level earnings dropped 48%, a slide the company blamed on beef costs and weak traffic.

The Grand Rapids, Michigan-based company filed in the US Bankruptcy Court for the Western District of Michigan. Its portfolio runs to 314 Wendy's restaurants across 15 states, plus a single Bojangles and five independent breakfast concepts under the Morning Belle name. Court filings put both assets and liabilities in the $10 million to $50 million range, a standard reporting bracket rather than a precise figure.

A year of cuts before the filing

The most effective and proactive path to strengthen Meritage's finances.

Meritage said store-level EBITDA fell to $36.2 million in 2025, a 48% drop that it traced to beef inflation, heavy discounting under previous leadership, marketing missteps and Wendy's system-wide same-store sales declines. Store margins hit a 30-year low.

The company had already been cutting back. It closed 60 underperforming locations earlier in 2026, exited or scaled back the breakfast daypart at roughly 120 restaurants, and trimmed more than $7 million from general and administrative costs. A rollout of catering through EzCater, with average tickets near $500, is meant to offset some of the lost sales.

Wages continue during the restructuring

City National Bank holds the largest claim against Meritage, a $150 million loan the bank had already declared in default last year. Meritage said Chapter 11 represents "the most effective and proactive path to strengthen" its finances after more than a year of talks with lenders.

All restaurants are staying open. Meritage said its roughly 9,000 employees will keep receiving wages and benefits without interruption, subject to court approval, while the case proceeds through the Michigan court.

The filing adds Meritage to a run of multi-unit franchisee bankruptcies in 2026 that has already touched Hardee's, Subway, Popeyes and Applebee's operators, and follows US casual-dining troubles such as Dave & Buster's swing to a quarterly loss.