Bankrupt Wendy's Franchisee Meritage Could Close 60 More Restaurants

Meritage Hospitality Group could close up to 60 more Wendy's restaurants through mid-November, on top of 33 locations it has already shuttered since late September, according to court documents filed in its Chapter 11 case.

The Grand Rapids, Michigan-based franchisee, which filed for Chapter 11 debt protection on Sept. 17, closed another 13 restaurants late last week. The closures come in waves, and each wave is deliberate: lenders holding Meritage's $155 million in secured debt want to preserve as much cash as possible, and money-losing stores tend to drain it.

The math is stark. A franchisee that at one point operated 374 Wendy's locations will have closed 120 if it shutters another 60 — including 60 restaurants closed earlier this year, before the bankruptcy filing.

Why are these restaurants closing?

The units slated for closure are, in the language of operators, cash burners. Court filings show they generate low average unit volumes, with some locations making less than $900,000 in revenue per year. That's less than half the average for the Wendy's system.

Every restaurant on the closure list generates negative EBITDA. Some lost nearly $200,000 over the past 12 months — meaning each shuttered door effectively stops a six-figure annual bleed.

For comparison: a typical Meritage location performing at even half the system average would need roughly $1.8 million in sales just to hit the brand's midpoint. The stores being closed aren't close.

What does this change for Wendy's?

Meritage's troubles compound a Wendy's estate that has been shrinking for years. The chain has closed a net of more than 300 locations since 2024, including 245 net closures in the first half of this year, according to company filings. Many of those closures were designed to improve franchisee profitability — the same logic now driving Meritage's carve-up in bankruptcy court.

The backdrop is a weak operating environment. Consumers have cut back on fast-food dining, and Wendy's sales have taken a hit over the past two years amid both industry softness and the chain's own challenges.

Wendy's has responded with a leadership overhaul. The company hired Bob Wright as CEO earlier this year and has rebuilt much of the executive team, including the recent hire of Tariq Hassan as chief marketing officer.

The broader industry context adds pressure. Top 500 chain restaurant sales slowed again in 2025, though coffee, beverages, snacks and chicken segments thrived — a reminder that the slowdown is uneven, and burger operators are absorbing more of it.

Whether Meritage's estate stabilizes at a profitable core or keeps shrinking will be decided, effectively, by its lenders — and by mid-November, the Wendy's map could look meaningfully smaller.