Financially challenged fast-food franchisees have been lining up to file for bankruptcy protection in 2026 to reorganize their businesses and restructure debt.
Hardee’s Phoenix-based restaurant franchisee Superior Star LLC , filed for Chapter 11 bankruptcy protection on July 9, facing an alleged seller financing dispute, according to court papers. A burger chain rival, Checkers Drive-In franchisee C.S. Holdings of Tampa LLC, which operates two locations in Tampa, Fla., filed for Chapter 11 bankruptcy protection to reorganize its business on July 14.
Another Hardee’s franchisee, ARC Burger LLC, filed for Chapter 7 bankruptcy liquidation on April 20, 2026, after franchisor Hardee’s Restaurants LLC sued the restaurant operator for alleged breach of contract, seeking to recover over $6.5 million in unpaid franchise fees and other obligations, according to Law.com.
Franchisee Meritage files bankruptcy
And now, major Wendy’s restaurant franchisee Meritage Hospitality Group Inc., which operates over 350 locations in 15 states, filed for Chapter 11 bankruptcy to reorganize its business and restructure its debt, almost 11 months after defaulting on its franchise agreements for failing to remit payments.
Meritage Hospitality and 14 affiliates filed their petition in the U.S. Bankruptcy Court for the Western District of Michigan on Sept. 17, 2026, listing $10 million to $50 million in assets and debts.
Operates Morning Belle breakfast cafes
The Grand Rapids, Mich.-based Wendy’s franchisee also operates six Morning Belle brunch cafes in Michigan, according to its website and owns Bojangles chicken franchise locations, though the number of Bo restaurants was not listed on the website. The company had employed about 12,000 workers by the end of the year in 2024, according to a statement.
Meritage Hospitality conducted an internal prepetition restructuring under the direction of its Chief Restructuring Officer Kevin Cleary of Fort Dearborn Partners and closed about 60 Wendy’s locations and cut operational expenses by $7.3 million, according to Meritage Hospitality’s CEO Report in May 2026.
The debtor received a notice of event of default from Wendy’s franchisor Quality Is Our Recipe LLC on Oct. 24, 2025, and had 30 to 90 days to cure the defaults. Quality Is Our Recipe LLC maintained its right to cancel or terminate the franchise agreements if they were not cured, according to a Meritage Hospitality statement on Oct. 31, 2025.
“The company is actively partnering with its franchisor and is optimistic about its ability to resolve the events of default,” Meritage said in the statement. The company did not issue a statement on its resolution of the default, but it cured the default as the company has continued operating as a Wendy’s franchisee.
Debtor defaults on debt facility
Meritage Hospitality on Sept. 29, 2025, also received a notice of default from its credit facility lender City National Bank, which it owed $150 million, though the debtor disputed the default claim. The bank claimed Meritage was in default for allegedly failing to maintain liquidity covenants, failing to pay obligations as they become due, and for closing a Georgia location, according to a statement.
The debtor subsequently obtained a forbearance agreement for its credit facility, according to its website.
The nation’s No. 2 burger chain, Wendy’s, is continuing its Project Fresh turnaround strategy, that it launched in 2025, which calls for the company to shutter underperforming locations.
Wendy’s closes locations
Wendy’s, which closed 28 locations under the Project Fresh program in 2025, planned to close 5%-6% of its U.S. restaurant locations, or about 292 to 350 underperforming units, in 2026, according to its fourth quarter earnings call reported by The Motley Fool.
The fast-food burger chain had roughly 5,831 locations listed on its website at the time of its Feb. 13 fourth quarter earnings call.
“By closing consistently underperforming restaurants, we are enabling our franchisee partners to increase focus on locations with the greatest potential for profitable growth,” CEO Ken Cook said in the fourth quarter earnings call.
The Columbus, Ohio-based burger chain was founded in 1969 by Dave Thomas and operates over 7,000 locations worldwide, according to its website.
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