A federal bankruptcy judge has cleared Meritage Hospitality Group to close up to 60 more Wendy’s franchise restaurants by November 13. The ruling comes in the same week that Flynn Group, which operates more than 340 Wendy’s of its own, joined Trian in a $1.4 billion proposal to take the franchisor private.
Before its Chapter 11 filing in September 2026, Meritage Hospitality Group operated more than 350 Wendy’s restaurants in 15 states. The franchisee has since closed locations in several waves, with 13 more closures reported in mid-October. According to court papers cited by TheStreet, Meritage has closed 93 restaurants so far: 60 before the filing and 33 after it.
What the Court Approved
On October 23, Judge James W. Boyd of the U.S. Bankruptcy Court for the Western District of Michigan authorized Meritage to reject the leases and franchise agreements of at least 20 and no more than 60 restaurants.
The order covers units that are EBITDA-negative or considered to have negative value. Closures require location-specific orders on October 30, November 6 or November 13, a calendar required by lender City National Bank in its cash collateral order. The bank had sent Meritage a notice of default on a $150 million credit facility on September 29, 2025.
Sums Owed to the Franchisor
The Meritage petition lists more than $24.9 million in deferred franchisor fees owed to Wendy’s International. The franchisor has separately filed a $146.9 million claim in the case. Wendy’s had already sent Meritage a notice of event of default on October 24, 2025, which the franchisee cured before filing. These closures come on top of the brand’s own plan, disclosed during its fourth quarter 2025 earnings call, to close 5% to 6% of its U.S. restaurants in 2026.
Two Large Franchisees on Different Paths
On October 28, Trian Fund Management, Flynn Group, BlueFive Capital and Sixth Street Partners submitted a non-binding $7.35-per-share offer for The Wendy’s Company. The proposal letter filed with the SEC states that Flynn runs more than 340 Wendy’s restaurants in the U.S. and is the brand’s master franchisee in Australia and New Zealand. Across all its brands, Flynn operates more than 3,000 units. The letter lists stronger franchisee health among the goals of private ownership.
What Comes Next
The first location-specific closure orders fall on October 30, with the last window on November 13. Under the order, Meritage can close no fewer than 20 and no more than 60 restaurants in that period. On the corporate side, the Wendy’s board formed a committee of independent directors, not affiliated with the investor group, to review any proposal. The company said there is no assurance it will pursue a transaction and that it will not comment further until disclosure is appropriate or necessary.
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