Franchising

Wendy’s to acquire up to 163 Meritage Hospitality Group locations

Photo: Shutterstock

November 5, 2026

Summarize with

The Wendy's Company has signed a letter of intent to acquire up to 163 Wendy's restaurants from Meritage Hospitality Group as part of a broader effort to strengthen its U.S. restaurant portfolio and improve franchisee economics.

The announcement was made during Wendy's Q3 earnings call on Nov. 5.

The agreement, signed by Wendy's, Meritage and its lenders, is part of the bankruptcy process involving Meritage. The proposed acquisition is subject to a definitive agreement, the possibility of higher and better offers, and court approval, Wendy's CEO Bob Wright said during the Q3 call.

Meritage filed for Chapter 11 bankruptcy in September, citing rising food costs among other operational challenges. The restaurants included in the letter of intent are concentrated in markets where Wendy's already operates, giving the company existing market knowledge and operating scale to improve performance, Wright said.

Wright also said the company expects Meritage's other markets, which Wendy's does not plan to acquire, to be sold and transitioned to other franchisees through a bankruptcy-facilitated process. Those markets also offer geographic concentration and potential acquisition opportunities for existing franchise operators. Meritage's bankruptcy filing affects 300 restaurant locations.

"We've aligned with Meritage to support those transitions as well," Wright said.

The letter of intent also allows for higher and better offers from approved franchisees as the process moves forward and Wendy's portfolio optimization team will support the transition of restaurants to new ownership.

Part of broader portfolio optimization strategy

The proposed transaction is part of Wendy's efforts to improve the financial health of its franchise system and ensure restaurants are operated by owners with the resources and capabilities to invest in the business.

The company recently established a portfolio optimization team to work with franchisees facing financial challenges. Depending on individual circumstances, support may include operational assistance, deferrals of royalties or other fees, targeted restaurant closures, transitions to other operators or company acquisitions.

Wright said the Meritage transaction reflects Wendy's broader approach to improving franchisee economics and strengthening the health of its restaurant system. The company has established a portfolio optimization team to work with franchisees, lenders and other business partners to determine the best path forward for financially challenged operators.

"Depending on the circumstances, that could include operational support, deferral of royalties, advertising, or other fees, targeted closures of underperforming restaurants, transitioning restaurants to other operators or the company, acquiring restaurants," Wright said.

He emphasized that restaurant closures alone are not a solution to franchisee financial challenges.

"Closing restaurants is no way to make a system healthier," he said, adding that Wendy's is evaluating individual locations based on trade-area conditions, population, traffic counts and competitive positioning.

Wright said the company is taking a tailored approach to each situation, working with franchisees, lenders and other business partners to identify the best path forward.

"In a lot of these situations, there's a lot we can do, and there's a lot within our control to create the profit that makes that a viable business," Wright said.

The company's broader turnaround strategy, Dave's Way, is focused on rebuilding customer traffic and market share while strengthening restaurant profitability. Management has emphasized that improving franchisee economics and restaurant-level execution will be central to that effort.

Wendy's did not disclose financial terms for the proposed Meritage acquisition and the transaction remains subject to the bankruptcy process and required approvals.