Meritage Hospitality Group faces potential closure of 60 Wendy’s locations

Meritage Hospitality Group, a Grand Rapids-based Wendy’s franchisee, is undergoing a Chapter 11 bankruptcy restructuring that could lead to the closure of up to 60 additional restaurants through mid-November. This follows the closure of 33 locations since the company filed for bankruptcy on September 17.

Including 60 locations closed earlier this year, the franchisee may shutter a total of 120 restaurants. The company, which at one point operated 374 locations across 15 states, cited weak restaurant profits and high beef costs as contributing factors to its financial difficulties.

Court filings indicate that the targeted closures involve locations with low average unit volumes and negative earnings before interest, taxes, depreciation, and amortization (EBITDA). Some of these underperforming stores reported annual revenues of less than $900,000, which is less than half the Wendy’s system average. Lenders holding $155 million in secured debt are seeking to preserve cash by eliminating these money-losing sites.