Meritage Hospitality Group, a major U.S. Wendy’s franchisee, has filed for Chapter 11 bankruptcy protection amid ongoing challenges in the burger chain’s performance. Operating 314 Wendy’s locations across 15 states, Meritage cited the widespread financial pressures facing Wendy’s as a key factor impacting its own financial health. The burger chain itself has seen a decline in same-store sales for six consecutive quarters, reflecting broader difficulties in attracting value-conscious consumers.

The struggling performance of Wendy’s is compounded by frequent changes in leadership and unclear strategic direction, leading to a significant drop in its stock value, which has lost two-thirds of its worth in the past three years. At a June investor conference, Meritage’s CEO Bob Schermer Jr. disclosed that store-level earnings before interest, taxes, depreciation, and amortization fell sharply by 48% in 2025. Rising beef prices along with increased discounting have further squeezed the franchisee’s profitability.

Meritage’s Chapter 11 filing aims to strengthen its balance sheet while allowing the company to continue operating its restaurants during the restructuring process. The company’s liabilities and assets are estimated to be valued between $10 million and $50 million. Wendy’s franchise operation arm, Quality Is Our Recipe LLC, is listed as Meritage’s largest unsecured creditor with a claim approaching $25 million for deferred franchise fees.

The bankruptcy of one of Wendy’s largest franchisees highlights the broader struggles of the brand in adapting to evolving consumer preferences and cost pressures. Despite these challenges, Meritage remains committed to operating its portfolio throughout the bankruptcy proceedings. The filing underscores the uncertain outlook for Wendy’s as it works to stabilize its business and regain market traction.