Meritage Hospitality Group filed for bankruptcy under Chapter 11, but a University of Toledo professor said this doesn’t necessarily mean the stores are going away.
TOLEDO, Ohio —
The beef is likely not going anywhere after a major Wendy’s franchisee filed for bankruptcy.
Meritage Hospitality Group, based in Michigan, owns 13 Wendy’s in Ohio, and according to reporting from the Columbus Dispatch, all the locations are here in northwest Ohio.
The group filed for bankruptcy under Chapter 11 on Sept. 17.
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Major Wendy’s franchisee files for bankruptcy. What does it mean for northwest Ohio locations?
“It gives the company an opportunity to reorganize their finances and work with vendors and provide a schedule of repayment to the vendors to alleviate financial burdens that are too much right now, but are determined to be something that can be managed over time,” Brandon Cohen, a University of Toledo senior lecturer, said.
Cohen said this likely means the company wants to square away its finances and continue operations.
“My educated guess would be that the stores that are profitable will be kept open and those people will retain their jobs, and the stores that are not profitable will likely be closed,” Cohen said.
Wendy’s corporate sent WTOL 11 a statement saying, “Our focus remains on serving our customers, supporting our franchise system, and strengthening the long-term health of the brand. We partner closely with franchisees that are experiencing challenges to support them and evaluate each situation on a case-by-case basis to identify the best and most sustainable path forward. We do not anticipate a disruption to restaurant operations, and Wendy’s goal is to keep as many restaurants open to continue to serve our customers.”
Court records said some of the reasons for the financial issues include record-high U.S. beef prices and unusual winter weather with La Niña.
“If a company does not see, for whatever reason that they don’t feel that they can raise their costs to meet the additional pricing for beef, for example, then they might not see there’s a way out of it,” Cohen said.
If one fast food company is feeling the pinch, Cohen said others probably are too. He said this could be the first of multiple reorganizations.
“You’d probably see other companies doing the same thing over time, and probably within the next year, you’ll see a majority of that movement will happen within the next year,” Cohen said.
While the Biggie Bag is likely here to stay, this could be just the start of a bigger issue for all restaurants.
Cohen said it is likely that local businesses are feeling the same financial strain and not just with beef prices. He said gas prices and overall inflation could also play a role.
WTOL 11 reached out to Meritage Hospitality Group and is still waiting for a response.
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