Meritage Hospitality: 33 Wendy’s closed, 60 more at risk
A US Bankruptcy Trustee calls the pace of Meritage’s closures extraordinary, as Wendy’s argues its biggest franchisee has no right to keep running the restaurants at all.
Meritage Hospitality has closed 33 Wendy’s restaurants since its Chapter 11 filing last month, and a US Bankruptcy Trustee says the franchisee’s push to shut dozens more is moving too fast for the court to review.
The Grand Rapids, Michigan-based company filed for bankruptcy on September 17, 2026, the same week Wendy’s terminated its franchise agreements over $27.4 million in unpaid royalties. Court filings since then show the closures accelerating: Meritage shut 13 restaurants in the week before October 20, pushing the total since late September to 33.
Court documents say up to 60 more could follow through mid-November. If all of them close, Meritage will have shed close to a third of the roughly 374 Wendy’s restaurants it ran at its peak.
In reality, debtors have no rights to operate because Wendy’s properly terminated the franchise agreements pre-petition.
The locations marked for closure share a profile: some bring in under $900,000 a year, less than half the system-wide Wendy’s average, and post negative EBITDA, with a handful losing close to $200,000 over the past 12 months, according to court filings.
A trustee calls the Wendy’s closures extraordinary
A US Bankruptcy Trustee has objected to an earlier plan to close up to 40 of the restaurants within weeks, arguing the closures fall outside Meritage’s ordinary course of business. The Trustee called the compressed schedule “extraordinary” and said it left the court and other interested parties too little time to review the closings, while acknowledging Meritage’s need to cut lossmaking stores.
Wendy’s, for its part, argues Meritage has no right to run the restaurants at all. In its own court filing, the chain said debtors “have no rights to operate because” Wendy’s “properly terminated the franchise agreements pre-petition,” and that Meritage holds “no continuing franchise rights.”
Secured debt sets the closure pace
City National Bank holds the bulk of Meritage’s $155 million in secured debt, and lenders are pushing the company to close money-losing stores and preserve cash. Secured creditors are typically paid first in a bankruptcy, but it is Wendy’s, as franchisor, that controls who can keep operating the restaurants once the dispute is resolved.
Wendy’s own numbers show the pressure runs wider than one franchisee. The chain has posted a net of more than 300 closures system-wide since 2024, including 245 in the first half of this year, as part of a wider wave of US chain closures, with new chief executive Bob Wright and chief marketing officer Tariq Hassan trying to reverse falling same-store sales. The next court date, and the fate of Meritage’s remaining restaurants, falls before mid-November.
