Business

Bankrupt Wendy's franchisee confirms 30 restaurant closures

A major Wendy’s franchisee is closing five restaurants immediately, with up to 25 more potentially disappearing after the company filed for bankruptcy. ©Image Credit: Unsplash / Sean Lin

Wendy’s customers are about to have fewer places to grab a Baconator. Meritage Hospitality Group, one of the biggest Wendy’s franchisees in the U.S., has confirmed that it is closing restaurants as it works through Chapter 11 bankruptcy. The Grand Rapids, Michigan-based company operates 314 Wendy’s restaurants across 15 states and as many as 30 of its locations could ultimately shut down.

Five of the franchisee’s locations are already gone

Court filings show Meritage identified five restaurants that were unprofitable and closed them over the weekend. The first closures include the stores at 1175 Dunn Ave, Jacksonville, FL; 2525 South Monroe St., Tallahassee, FL; 2420 W Main St., Durant, OK; 301 College Ave., Levelland, TX; and 441 Market St., Gordonsville, VA.

These spots are just the beginning. Under a cash collateral agreement connected to the bankruptcy case, Meritage can close up to 30 restaurants over the next several weeks. Additional closures are scheduled on a rolling basis through October 16.

The company is also seeking to cancel the leases and franchise agreements for the affected restaurants as it restructures its business.

Why is Meritage closing Wendy’s locations?

Meritage recently filed for Chapter 11 bankruptcy protection, saying pressures on the Wendy’s system have played a major role in its financial problems. Because most of Meritage's restaurant portfolio operates under the Wendy’s brand, the company said those system-wide challenges had a “significant impact” on its financial position.

According to Wendy’s, it is working with struggling franchisees rather than simply letting them fend for themselves. “Our focus remains on serving our customers, supporting our franchise system and strengthening the long-term health of the brand,” a spokesperson for the franchise told The U.S. Sun, adding that the company works with franchisees on a case-by-case basis to find the “best and most sustainable path forward.”

Sources: The U.S. Sun, 614 Now

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