Wendy's Objects to Meritage Hospitality Bankruptcy, Claims Franchise Agreements Were Terminated
Wendy’s is challenging the bankruptcy filing of its largest franchisee, Meritage Hospitality Group. The fast-food chain argues that Meritage no longer has rights to operate Wendy’s restaurants because their franchise agreements were terminated due to non-payment of royalties. Meritage owes $27.4 million in unpaid fees and failed to meet an extended payment deadline set by Wendy's earlier this year. Meritage operates 314 Wendy’s locations, primarily in the Midwest and South. In its court filing, Wendy’s stated that it is willing to consider a temporary license for Meritage or another franchisee during any transition period but insists the operator has no continuing rights under terminated agreements. The situation sets up a legal battle over who controls these restaurants moving forward. The U.S. Bankruptcy Trustee also raised concerns about plans by Meritage to close as many as 40 locations, calling it an extraordinary move that lacks proper oversight.
Topics: bankruptcy filing franchise agreements Meritage Hospitality Group Wendy's