One of the nation’s largest Wendy’s franchise operators has filed for Chapter 11 bankruptcy protection, but the company states in a release that its restaurants should remain open during the restructuring process. More Business News
Meritage Hospitality Group announced Sept. 17 that it voluntarily filed for Chapter 11 protection in U.S. Bankruptcy Court for the Western District of Michigan as it works to strengthen its balance sheet and restructure its finances.
The Michigan-based company currently operates 314 Wendy’s restaurants, one Bojangles location and five independently branded restaurants across 15 states, including Tennessee. Meritage employs approximately 9,000 people.
The bankruptcy filing itself does not include an announcement of additional restaurant closures. Meritage said it expects to maintain restaurant-level operations throughout the Chapter 11 process and plans to continue paying employee wages and benefits, subject to court approval. The company also said it intends to continue paying suppliers and vendors for goods and services provided after the filing.
Meritage said the filing follows several years of financial pressure affecting the broader Wendy’s brand. Because most of the company’s restaurants operate under the Wendy’s name, those challenges have significantly affected its finances.
Earlier this year, Meritage closed 60 Wendy’s locations to reduce costs. The company now operates 314 Wendy’s restaurants.
Meritage said it is seeking debtor-in-possession financing that, combined with cash generated from ongoing operations, is expected to provide enough liquidity to keep the business operating during the bankruptcy proceedings.
“The Company’s restaurants will continue to serve guests every day, and its team members remain the heart of this business,” Meritage stated in its announcement.
The company said Chapter 11 will allow it to address its debt and explore strategic alternatives while continuing normal restaurant operations.
Wendy’s restaurants are independently operated under a franchise system, and Meritage is a franchisee, not the parent company of Wendy’s. The Wendy’s Company remains the corporate owner of the Wendy’s brand.
At this time, Meritage has not announced additional restaurant closures connected with the Chapter 11 filing.
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