Wendy’s sought to keep seven Meritage restaurants open

Wendy’s sought to keep seven Meritage Hospitality Group restaurants open by proposing that other restaurants close instead, Fast Company reported October 9. The seven were among ten locations Meritage planned to close that day. Wendy’s offered to cover losses associated with the substitutions, according to the report. The outcome of the planned closures remained unverified as of October 11.

Meritage operates the restaurants. Quality Is Our Recipe, LLC, the Wendy’s entity involved in the case, is the brand’s U.S. franchisor, according to Wendy’s annual report.

The official docket maintained by Kroll records the franchisor’s October 7 objection, an October 8 denial of an emergency hearing, and Meritage’s October 9 response with a supporting declaration from Kevin Cleary. The entries do not establish a closure ruling, and the response documents were not readable for this report.

How Meritage reached Chapter 11#

When Meritage announced its Chapter 11 filing September 17, it said it operated 314 Wendy’s restaurants. The Michigan-based company expected to maintain restaurant operations while strengthening its balance sheet and seeking a sustainable capital structure.

Meritage attributed its financial pressure partly to sustained difficulties across the Wendy’s brand, which accounts for most of its restaurant business. The company said it had worked with lenders and its franchisor for more than a year before deciding to pursue a court-supervised restructuring. It also expressed confidence in the prospect of a brand turnaround.

Its financial difficulties predated the filing. In Meritage’s 2025 financial report, auditor BDO described operating losses and negative cash flows that left the company unable to meet certain obligations when due within the following year. The auditor’s March 30, 2026 report highlighted substantial doubt about Meritage’s ability to continue as a going concern, while leaving its audit opinion unmodified.

In September, Meritage said it was seeking debtor-in-possession financing and expected that funding, together with cash from operations, to support the business during Chapter 11.

The separate franchise-rights dispute#

WOODTV reported October 7, in an article syndicated by AOL, that Wendy’s sought relief from bankruptcy’s automatic stay to enforce a September 16 franchise-termination notice over unpaid fees.

Meritage challenged that termination in a September 29 filing, the outlet reported. It argued that Wendy’s had also proposed a temporary license allowing continued operations through year-end. The agreement was not executed. Meritage contended that the offer showed Wendy’s intended continued use of its brand at the restaurants.

Meritage also argued the termination notice was defective, partly because it arrived by email rather than physical delivery. It asked the court to declare the termination ineffective and prevent its enforcement under the automatic stay.

WOODTV reported that a status conference on Wendy’s request for relief from the stay was scheduled for October 14.