Meritage Hospitality Group, one of the largest franchise operators of Wendy’s restaurants in the United States, has proposed selling 42 locations for $18.6 million as it restructures under Chapter 11 bankruptcy protection. The proposed transaction would transfer the restaurants in Tennessee, Arkansas, Mississippi, and Missouri to Divine Infinity Operations, an entity associated with multi-unit franchise operator Hiren Patel.
The sale was disclosed in a court filing on October 21, with the restaurants forming part of Meritage’s broader effort to reduce its footprint and generate liquidity during bankruptcy proceedings. The transaction remains subject to court approval and is not yet complete. According to Restaurant Dive, the proposed sale could help preserve hundreds of jobs and maintain the operating value of the restaurants while providing funds for the restructuring.
Meritage began its Chapter 11 proceedings on September 17, 2026, after mounting financial pressures and a dispute with Wendy’s over unpaid obligations. At the time of filing, the Grand Rapids, Michigan-based company operated 314 Wendy’s restaurants, alongside one Bojangles location and five independently branded concepts across 15 U.S. states. It employed approximately 9,000 people.
The dispute with Wendy’s escalated a day before the bankruptcy filing, when the franchisor moved to terminate Meritage’s franchise agreements. Wendy’s cited more than $27 million in overdue royalty obligations, while court documents also detail a separate dispute over continuous-operations fees associated with closed restaurants. Meritage has contested the effectiveness of the termination and sought to continue operating its restaurants during the restructuring.
The proposed sale is part of a wider portfolio reduction. Meritage had already closed approximately 60 underperforming restaurants and sought court permission to reject leases for additional locations. The combination of sales and potential closures could leave the company operating roughly 200 Wendy’s restaurants, down substantially from its original 314-unit portfolio.
The proposed buyer brings experience in franchised restaurant operations. Patel’s Divine Investors operates Dunkin’ and KFC locations, giving the prospective acquirer experience with multi-unit quick-service restaurant systems. The transaction would move the 42 restaurants to a different operator if approved, rather than necessarily closing them or removing the Wendy’s brand from those locations.
