Wendy's says it terminated Michigan franchisee before bankruptcy. What's at stake

Wendy's says nearly 60 restaurants across the Lower Peninsula of Michigan shouldn't be allowed to use the company's logos, branding and other intellectual property because the company terminated franchise agreements with a Grand Rapids operator before it declared bankruptcy.

Meritage Hospitality Group Inc., one of the nation’s largest restaurant operators, on Friday, Sept. 17, announced that it had voluntarily filed petitions for relief in the United States Bankruptcy Court for the Western District of Michigan.

"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. "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 Wendy's company, under the LLC Quality Is Our Recipe, said in a subsequent filing on Sept. 21 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 court filing, however, disputes Meritage's need to continue operating while the bankruptcy case continues rather than "seeking an orderly draw-down of the Debtor's business." 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…"

Meritage, based at 45 Ottawa Ave. SW in Grand Rapids, has 314 Wendy’s, one Bojangles and five independently branded dining concepts across 15 states, according to a release.

The company's Michigan outlets represent a large number of the 196 Wendy's restaurants in the state. Meritage's website says it has 54 Wendy's locations in Michigan as well as six Morning Belle restaurants. Quality Is Our Recipe's court filing lists 58 restaurants in Michigan (including four that are closed) and 376 overall for the franchisee.

In other court filings, the U.S. trustee also objected to some of Meritage's bankruptcy plans, which include closing at least 48 "underperforming" restaurants nationally. The company, the trustee said, wanted to close 10 restaurants by Sept. 25, 10 more by Oct. 2, Oct. 9 and Oct. 16 to protect secured lender City National Bank.

In its May CEO report, Meritage said it previously closed 60 underperforming stores.

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.

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, the 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.

List of Meritage Hospitality Wendy's locations in Michigan

According to a court filing by the Wendy's company — Quality Is Our Recipe — the following locations are included in the termination.

5830 S. Westnedge Ave., Portage929 W.

Columbia Ave., Battle Creek2315 Alpine Ave. NW, Walker3301 Plainfield N.

E., Grand Rapids1185 M-89, Plainwell828 S. Kalamazoo, Paw Paw480 68th St.

, Grand Rapids4694 W. River Road, Comstock Park3922 Lake Michigan Drive NW, Walker816 E. 16th St.

, Holland1975 E. Belt Line Avenue, Grand Rapids5960 Alpine Ave. NW, Comstock Park250 W.

Pine Lake Drive, Newaygo3805 Sprinkle Road, Kalamazoo600 28th St. SW, Wyoming2333 28th S.E.

, Grand Rapids6628 Kalamazoo Ave. S.E.

, Kentwood1695 East Grand River Ave., Portland4343 Patterson Ave. S.

E., Kentwood72401 County Road 388, South Haven509 Lincoln Road, Allegan1865 E. Sherman Blvd.

, Muskegon796 Gull Road, Kalamazoo (closed December 2025)2351 Gezon Parkway SW, Wyoming5070 E. Beltline Ave. NE, Grand Rapids1428 Capital Ave.

N.E., Battle Creek250 N.

River Avenue, Holland2215 Port Sheldon St., Jenison4435 Canal Ave., Grandville4301 W.

Centre Ave., Portage5128 South 9th St., Kalamazoo (closed December 2025)3176 Westshore Drive, Holland8258 Broadmoor Ave.

SE, Caledonia1756 N. Getty Road, Muskegon (closed December 2025)3921 28th St. S.

E., Grand Rapids (closed January 2026)165 54th Street SW, Wyoming1061 Michigan St. N.

E., Grand Rapids614 S. State St.

, Big Rapids1570 N. Mitchell, Cadillac18001 E. Nine Mile Road, Eastpointe18800 Mack Ave.

, Grosse Pointe Farms14099 White Creek Ave., Cedar Springs19100 Kelly Road, Detroit17010 Harper Avenue, Detroit20979 Harper Ave., Harper Woods801 West Norton Ave.

, Norton Shores1492 U.S. 31, Manistee5189 W.

U.S. 10, Ludington9556 U.

S. 31 South, Interlochen5455 W. Main St.

, Kalamazoo445 N. Beacon Blvd., Grand Haven4037 32nd Ave.

, Hudsonville1162 Washington Ave., Holland1686 S. Garfield Ave.

, Traverse City1786 E. Apple Ave., Muskegon4755 Lake Michigan Drive, Allendale66942 Gratiot Ave.

, Richmond620 S. Main St., Watervliet