A Wendy's franchisee that owns hundreds of restaurants across 15 states, including Ohio, has filed for Chapter 11 bankruptcy.
Michigan-based Meritage Hospitality Group Inc., one of the nation’s largest restaurant operators, announced Sept. 17 that it had voluntarily filed petitions for relief in the United States Bankruptcy Court for the Western District of Michigan, according to the Lansing State Journal, part of the USA TODAY Network.
"The Company took this step to strengthen its balance sheet and establish a sustainable capital structure that positions Meritage for long-term success," the company said in a release.
In a court filing of its own, Wendy's says Meritage shouldn't be allowed to use the company's logos, branding and other intellectual
property because the Columbus, Ohio, company terminated franchise agreements before the bankruptcy.
Which Wendy's restaurants in Ohio are affected? Here's what to know.
Company operates Wendy's franchises in 15 states, including 13 in Ohio
Meritage Hospitality's website states the company operates 13 restaurants in Ohio. That's roughly 3.3% of the 389 total Wendy's locations across the Buckeye State.
"The company anticipates maintaining restaurant-level operations during the restructuring process and intends to continue paying its approximately 9,000 team members their wages and benefits without interruption, subject to court approval of customary 'first day' motions," the release said.
Court documents show Meritage put the value of its assets somewhere between $10 million and $50 million, with liabilities about the same.
Wendy's terminates franchise agreement
The Wendy's company, under the LLC Quality Is Our Recipe, said in a Sept. 21 court filing that Meritage owes the company $27.4 million in royalties, advertising and past due fees dating to 2025 and that it had terminated its franchise agreement on Sept 16, prior to the bankruptcy filing.
The termination, the company said, would prevent Meritage from operating its restaurants as Wednesday's locations. It's unclear what effect the termination will have on the restaurants' continued operation or the bankruptcy case.
"Our focus remains on serving our customers, supporting our franchise system, and strengthening the long-term health of the brand. We partner closely with franchisees that are experiencing challenges to support them and evaluate each situation on a case-by-case basis to identify the best and most sustainable path forward," Heidi Schauer, vice president of communications, public affairs and customer care for Wendy's, said via email. "We worked with this franchise organization and its lenders for more than a year to find a sustainable path forward. Ultimately, based on these circumstances, we determined that termination was the appropriate course of action.
"At this time, we do not anticipate a disruption to restaurant operations," she added.
The filing adds that Meritage should not be authorized to "conduct any business activity pursuant to the terminated franchise agreements. Permitting Debtors to continue to operate the restaurants would be a violation of state and federal law…"
13 Wendy's locations in Ohio could be impacted by Meritage Hospitality bankruptcy
According to a court filing by the Wendy's company — Quality Is Our Recipe — the following locations are included in the termination:
- 5166 Airport Highway, Toledo
- 108 E. Main St., Toledo
- 4277 Monroe St., Toledo
- 5802 Monroe St., Sylvania
- 914 Conant St., Maumee
- 6525 Airport Highway, Holland
- 1003 Buck Road, Rossford
- 7351 W. Central, Toledo
- 1859 Laskey Road, Toledo
- 5560 W. Central Avenue, Toledo
- 3124 Monroe St., Toledo
- 3465 Stickney Ave., Toledo
- 14180 Airport Highway, Swanton
- 1410 East Alexis, Toledo
Where does Meritage Hospitality have Wendy's restaurants?
The company operates in Indiana, Ohio, Tennessee, Massachusetts, Connecticut, Missouri, Arkansas, Virginia, North Carolina, Georgia, Florida, Mississippi, Oklahoma and Texas.
Is Wendy's going out of business?
No, the bankruptcy filing affects a franchisee that operates more than 300 locations in 15 U.S. states.
Wendy's has more than 7,000 restaurants in 30 countries.
In August, Wendy's said it generated revenue of $571 million and global systemwide sales of approximately $3.4 billion for the quarter ending in June. It also generated net income of $32.6 million and adjusted EBITDA of $124.1 million.
This article originally appeared on The Columbus Dispatch: Wendy's franchisee declares bankruptcy. These Ohio restaurants may be affected
