"Big Wendy's franchisee bankruptcy. Meritage Hospitality Group, one of Wendy's biggest franchisees with more than 300 locations, has declared Chapter 11, adding an enormous name to a growing list of operators seeking Chapter 11. It closed 60 locations earlier this year.
This is pretty straightforward. The company's profits fell 48% last year as Wendy's sales struggled and it lost $11 million due to a new beverage contract. Its lender declared a default last year, and Meritage hired a restructuring specialist this year and then made the decision to seek Chapter 11.
Meritage also stopped serving breakfast at underperforming locations or limited their hours.
Wendy's same-store sales have taken an ugly fall over the past 18 months, with two-year same-store sales down +10% in the first two quarters of this year. The company also said it had to close units in part to improve franchisee finances, and then there was the decision to allow certain operators to pull back on breakfast. "
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