Meritage Hospitality Group, one of Wendy’s largest U.S. franchisees, filed for Chapter 11 bankruptcy protection after struggling with declining sales, inflation, and weak restaurant-level margins, according to Restaurant Dive. The company operates 314 Wendy’s locations across 15 states and said it will continue operating its restaurants and paying its roughly 9,000 employees during the restructuring.
To improve profitability, Meritage has closed 60 underperforming restaurants and reduced or eliminated breakfast at about 120 locations, generating an immediate EBITDA margin benefit of more than $11 million. The company has also cut more than $7 million in G&A and operating costs and expanded a catering program with ezCater.
Meritage said the court-supervised restructuring is intended to strengthen its finances and address ongoing challenges facing both the company and the broader Wendy’s system.