What Wendy’s Says About the Bankruptcy Affecting 314 of Its Restaurants

Wendy’s is pushing back against one of its largest US franchise operators after the company filed for Chapter 11 bankruptcy protection. The fast-food chain claims it is owed almost $147 million in fees.

Importantly, The Wendy’s Company itself has not filed for bankruptcy. The Chapter 11 case involves Meritage Hospitality Group, which is a major franchisee that operates 314 Wendy’s restaurants across 15 states and employs around 9,000 people. Meritage filed for bankruptcy protection in Michigan on Sept. 17.

The filing came just one day after Wendy’s issued a notice seeking to immediately terminate its franchise agreement with Meritage.

According to court documents, Wendy’s claims Meritage owes approximately $27.4 million in royalties and other fees, plus another $119.5 million in so-called continuous operations fees connected to restaurant closures. Together, the claims total roughly $146.9 million.

Meritage closed around 60 underperforming Wendy’s restaurants as part of an earlier restructuring effort.

Wendy’s said it spent more than a year working with Meritage and its lenders to find a sustainable solution before deciding to terminate the relationship.

“Our focus remains on serving our customers, supporting our franchise system, and strengthening the long-term health of the brand,” Wendy’s said in a statement reported by Restaurant Business.

Meritage, on the other hand, pointed to other pressures facing the Wendy’s system. Store-level EBITDA at its Wendy’s restaurants dropped 48% in 2025, with rising beef prices and heavier discounting among the factors weighing on profitability. The company nevertheless plans to keep its restaurants operating and continue paying employees while it restructures.

Wendy’s is facing challenges of its own. US same-restaurant sales fell 7% during Q2, while US systemwide sales dropped 8.2%. Wendy’s generated $571 million in quarterly revenue and $32.6 million in net income, but withdrew its 2026 outlook as its new leadership works on a turnaround strategy.

Investors have also been keeping a close eye on Wendy’s stock. WEN closed at $6.73 on Sept. 23, down 1.17% for the session, after trading as high as $7.19 on Sept. 17. That leaves the stock roughly 3.7% below its Sept. 17 closing price of $6.99.

Wendy’s stock price (Source: CoinCodex)

The Meritage bankruptcy now only adds another complication to Wendy’s turnaround, even though the Chapter 11 filing belongs to its franchisee rather than the Wendy’s corporate parent.