Wendy’s operator Meritage plans closures, Fast Company reports

Meritage Hospitality Group plans restaurant closures during its bankruptcy, Fast Company reported September 26, after the Wendy’s operator initially said it expected to maintain restaurant operations.

The report identified five Wendy’s in Gordonsville, Virginia; Jacksonville and Tallahassee, Florida; Levelland, Texas; and Durant, Oklahoma that Meritage planned to close September 25. It said Meritage sought to cancel their leases and franchise agreements, with further closures on a rolling schedule through October 16. The additional restaurants were not identified in the report.

Fast Company linked the plans to a cash-collateral agreement with lenders. QSR.pro has not reviewed those underlying terms or independently confirmed completed closures.

Meritage had announced September 17 that it filed for Chapter 11 in Michigan’s Western District and expected to maintain restaurant operations. Its stated portfolio included 314 Wendy’s, one Bojangles and five independently branded concepts across 15 states.

Meritage said it was seeking financing alongside cash from operations. It intended to keep paying approximately 9,000 employees’ wages and benefits without interruption, subject to court approval, and pay suppliers for goods and services provided on or after the filing.

Wendy’s franchisor, Quality Is Our Recipe, LLC (QIOR), challenged Meritage’s early bankruptcy requests in a September 21 filing, Restaurant Dive reported September 22. According to Wendy’s annual report, QIOR owns and franchises the system in the United States and other international markets except Canada.

Restaurant Dive reported that QIOR argued Meritage lacked the right to operate the 314 Wendy’s after franchise agreements were terminated September 16 over more than $27 million in overdue royalty, advertising and other fees.

The outlet said QIOR would consider a temporary license for restaurant transfers and Meritage’s wind-down if the requests were rejected. If approved, QIOR sought timely payments under an interim license on the former agreements’ terms.

The official docket maintained by Kroll, checked September 28, lists a September 25 motion by Meritage to reject leases or executory contracts, accompanied by a proposed order.

Earlier entries record orders signed September 23 covering payment of wages and other compensation owed before the bankruptcy filing and continuation of employee benefits. Separate entries list existing customer programs and interim authorization for cash management and bank accounts.

The entries establish the filings’ subjects, not their full terms. QSR.pro has not read the underlying objection or full orders and has not established a ruling on franchise rights.