Wendy’s is closing more stores: See a list of doomed locations from a major franchisee in ongoing bankruptcy

The useful part

A sprawling Wendy's franchisee that sought Chapter 11 bankruptcy protection earlier this month could close as many as 30 restaurants over the next few weeks as part of a cash collateral agreement, new court filings reveal. Meritage Hospitality Group, which operates 314 Wendy's locations across 15 states, says it has already identified five unprofitable stores that it planned to shut down and vacate this weekend. In a bankruptcy docket filed late Friday, Meritage said it is seeking to cancel the leases and franchise agreements for the stores, which it has described as burdensome and unnecessary, as it seeks to restructure its operations.

How it works

• Michigan-based Meritage Hospitality Group has sought to use cash collateral for its day-to-day operations, a common and often necessary strategy for companies as they work through the Chapter 11 process.
• However, as part of an agreement with lenders, the franchisee said in a court filing that it will close at least 30 of its restaurants that are operating at a loss.
• The impacted Wendy's restaurants are located in Virginia, Florida, Texas, and Oklahoma.
• As of Saturday, the stores were still listed as open on Google and appearing on Wendy's store locator, but phone calls to the stores went unanswered.
• Fast Company reached out to The Wendy's Company and Meritage Hospitality Group for comment.

Details worth keeping

Last week, a bankruptcy judge approved Meritage's use of cash collateral. That figure is almost 10% of Meritage's entire fleet.