How can a company operating 314 Wendy’s restaurants go bankrupt while those Wendy’s restaurants are still open?
That is the weird part of this story. You could walk into one of these restaurants tomorrow, order a Baconator, grab some fries and leave without having the slightest idea that the company running the place just filed for Chapter 11.
The lights are on. The employees are working. The drive-thru is moving at approximately the speed of geological erosion. And yet, behind the scenes, one of the biggest Wendy’s operators in America is in bankruptcy court.
That company is Meritage Hospitality Group, a Michigan-based restaurant operator that runs 314 Wendy’s restaurants across 15 states. It filed for Chapter 11 on September 17.
But Wendy’s itself did not go bankrupt.
And that tiny distinction is actually the entire story.
Because there is a pretty good chance that the Wendy’s you visit isn't actually owned by Wendy’s.
Yep. 🍔
The giant red sign says Wendy’s. The app says Wendy’s. The menu says Wendy’s. But the company paying the rent, hiring the workers, buying the beef and trying to make the restaurant profitable could be somebody else entirely.
And when the economics get ugly, that somebody else can go broke while the logo stays exactly where it is.
That is the strange, fascinating world of American franchising.