Wendy’s is facing a deepening franchise dispute in the United States as Meritage Hospitality Group works through Chapter 11 bankruptcy, closes underperforming restaurants and challenges the termination of its agreements with the burger chain.
Meritage operated 314 Wendy’s restaurants across 15 states when it filed for bankruptcy protection in the Western District of Michigan on September 17, 2026.
The company said it intended to keep its restaurants operating and continue paying approximately 9,000 employees while it reorganized.
The case is significant for Wendy’s because Meritage was one of the largest operators in the chain’s franchise system.
It also adds pressure to a brand that has already been working to reduce weaker locations and rebuild sales under new leadership.
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Wendy's: What is happening with Wendy’s restaurants?
Court filings show that Meritage has been operating under a cash-collateral arrangement that included a schedule for closing at least 30 restaurants through October 16.
The closures target locations identified as unprofitable or otherwise burdensome during the restructuring.
The bankruptcy docket recorded additional filings on October 16, including a motion by Meritage to reject leases and other executory contracts.
Those filings indicate that the operator’s store portfolio remains under active review as it attempts to reduce costs and preserve the most viable restaurants.
The closure program has not been entirely straightforward.
Wendy’s has objected to some planned shutdowns and proposed replacing certain restaurants in the closure schedule with other locations that it viewed as more appropriate candidates for closure or transition.
Meritage opposed that proposed swap, arguing that changing the list would interfere with closures already under way and could leave higher-loss restaurants operating.
The bankruptcy court had previously declined to hold an emergency hearing on Wendy’s request to alter the interim schedule.
Why Wendy’s and Meritage are in court
Wendy’s, through its franchising subsidiary Quality Is Our Recipe, has argued that Meritage no longer has the right to operate the restaurants because the franchise agreements were terminated before the bankruptcy filing.
Meritage is challenging that position.
Its case contends that the termination should not prevent the company from using bankruptcy protections while it reorganizes its business and evaluates store sales, closures and transfers.
The dispute could determine whether the restaurants remain under Meritage’s control, move to Wendy’s or are transferred to replacement franchisees.
It could also affect how quickly individual locations change operators or close permanently.
Wendy’s is already pursuing a broader reset
The Meritage case comes as Wendy’s attempts to respond to weaker performance across its U.S. system.
In its second-quarter 2026 results, the company reported a 7 per cent decline in U.S. same-restaurant sales and an 8.2 per cent decrease in U.S. systemwide sales compared with the same quarter a year earlier.
Wendy’s withdrew its 2026 financial outlook in August while its new leadership assessed the business and developed a broader turnaround plan.
The company said its priorities included improving the menu and value proposition, strengthening marketing, improving restaurant operations, upgrading the digital experience and making the restaurant system more attractive for growth.
The company has also changed its senior leadership.
Bob Wright was appointed president and chief executive officer in May, while Tariq Hassan was named chief marketing and customer growth officer in August.
Those appointments came as Wendy’s sought to improve traffic, franchisee economics and customer demand.
Wendy’s has not indicated that the Meritage bankruptcy means the entire chain is entering bankruptcy.
The Chapter 11 filing was made by the franchise operator, not The Wendy’s Company itself.
What happens next
The bankruptcy court is expected to continue reviewing store closures, lease rejections, financing arrangements and the future of Meritage’s restaurant portfolio.
A court docket summary says an October 15 cash-collateral order extended interim authority through November 30 and required further steps involving store closures, investment-banker work and possible sales of parts of the business.
For customers, the immediate effect will vary by location.
Restaurants operated by Meritage may remain open, transfer to another franchisee or close, while Wendy’s locations outside the affected portfolio are not automatically part of the bankruptcy case.
For employees, the outcome will depend on whether individual restaurants continue operating, are sold or are shut down.
Meritage initially said it planned to continue paying wages and benefits subject to court approval, but future staffing decisions may change as the restructuring proceeds.
Wendy’s is scheduled to report its third-quarter 2026 results before the market opens on November 5.
That update could provide more information on U.S. sales, restaurant closures, franchisee health and the company’s turnaround priorities.
The central issue in the meantime is not whether every Wendy’s restaurant will close, but who will operate a group of locations that has become one of the most visible tests of the chain’s franchise model.
Frequently Asked Questions
Has Wendy’s filed for bankruptcy?
No. The Chapter 11 filing was made by Meritage Hospitality Group, a Wendy’s franchise operator, not The Wendy’s Company.
How many Wendy’s restaurants did Meritage operate?
Meritage operated 314 Wendy’s restaurants across 15 U.S. states when it filed for Chapter 11 protection on September 17, 2026.
Are all Wendy’s restaurants closing?
No. The closure schedule affects selected Meritage-operated locations. Wendy’s restaurants outside that franchise portfolio are not automatically part of the bankruptcy case.
Why are some Meritage-operated Wendy’s restaurants closing?
The closures are part of a court-supervised restructuring focused on reducing unprofitable or burdensome locations.
When will Wendy’s provide its next corporate update?
Wendy’s says it will release its third-quarter 2026 results before the market opens on November 5, 2026.
Fact-Checked: Key facts were checked against Wendy’s investor-relations announcements, Meritage Hospitality information and current bankruptcy docket records.
Disclaimer: Restaurant hours, ownership and availability may change during the restructuring, so customers should check individual locations before visiting.