Wendy’s, the big fast food chain, faced a fresh wave of permanent store closures on Friday for the second weekend in a row as one of its biggest franchisees scrambled to restructure operations in the aftermath of a Chapter 11 bankruptcy filing.
According to a court docket filed late Friday, five additional restaurants owned by the Michigan-based Meritage Hospitality Group were slated to be abruptly shuttered and vacated that day.
As of early Monday morning, the five locations were still listed on Wendy’s store locator tool, though some of the closings were noted on Google reviews and by local media.
These five impacted Wendy’s restaurants are located in Indiana, Oklahoma, Georgia, and Florida. They follow five earlier store closures that took place the previous Friday in Virginia, Florida, Texas, and Oklahoma.
In total, Meritage has now closed at least 10 stores over the last two weekends. The recent Wendy’s closures are in addition to roughly 60 locations that Meritage shuttered before it sought Chapter 11 protection in mid-September.
And more shutterings are almost certain to follow.
As Fast Company previously reported, the franchisee has agreed to shut down and vacate at least 30 locations as part of a cash collateral deal with its primary lender, to which it owes $135 million, according to court filings.
Fast Company reached out to Meritage Hospitality Group and The Wendy’s Company for comment.
A former hotel operator, Meritage bought its first fleet of 28 Wendy’s restaurants in the late 1990s and grew to become one of the largest restaurant operators in the Wendy’s system. At the time of its bankruptcy petition, it owned 314 Wendy’s locations across 15 states and employed roughly 9,000 people.
But now its existing store count could decline by 10% or more as the franchisee moves to cull underperforming locations under court supervision.
Which Wendy’s stores are closing?
According to a bankruptcy docket filed on Friday, the following Wendy’s stores closed this weekend:
- 1415 East Main Street, Cushing, OK 74023
- 1202 Lincolnway West, La Porte, IN 46350
- 4029 Five Forks Trickum Road, Lilburn, GA 30047
- 1901 Apalachee Parkway, Tallahassee, FL 32301
- 753 Park Avenue, Orange Park, FL 32073
As Fast Company previously reported, the following Wendy’s stores closed a week earlier:
- 441 Market St, Gordonsville, VA 22942
- 1175 Dunn Ave, Jacksonville, FL 32218
- 301 College Ave, Levelland, TX 79336
- 2525 South Monroe Street, Tallahassee, FL 32301
- 2420 W Main St, Durant, OK 74701
Are more Wendy’s stores closing?
Yes. Additional store closures are expected through at least October 16 as part of a cash collateral agreement approved by a bankruptcy judge last month.
That agreement gives Meritage a lifeline to run its day-to-day operations, pay its employees, and “rebut any skepticism” about its ability to continue for the foreseeable future.
But it also requires the franchisee to close at least 30 locations that have been operating at a loss. The closure of money-losing stores is seen as “adequate protection” for Meritage’s lenders.
Why did Meritage file for bankruptcy?
In a court declaration filed two days after its petition, Meritage said it had been facing numerous business challenges that began in 2024 and accelerated last year, including soaring U.S. beef prices and a disruption to sales driven by “unusual winter weather.”
But perhaps most notably, Meritage blamed its precarious financial situation on Wendy’s itself, taking aim at the “reduced frequency and effectiveness” of the fast food brand’s marketing. It further said that profits had been squeezed by national promotional strategies that focused on deep discounts. (Wendy’s, which has grappled with U.S. sales declines, hired a new CEO in May to help right the ship.)
Court documents filed since the petition reveal sigificant animosity between Meritage and The Wendy’s Company.
Meritage filed for bankruptcy the day after it received a franchise termination notice from the burger giant, with Wendy’s claiming it is owed $146.9 million in past-due royalties and “continuous operations” fees.
Meritage, for its part, has disputed the legitimacy of those terminations, but Wendy’s countered in its response to the bankruptcy that Meritage no longer has a right to operate the restaurants.
Wendy’s reported 5,724 U.S. locations as of its second quarter this year, down from 5,967 locations a year earlier.
This story is developing…