A potential buyer has emerged for a group of Wendy’s restaurants operated by the bankrupt Wendy’s franchisee Meritage Hospitality Group.
Hiren Patel, the owner of Divine Investors, which operates both Dunkin’ and KFC locations, is proposing to buy 42 Wendy’s restaurants out of bankruptcy for $18.6 million.
The restaurants are in Arkansas, Tennessee, Mississippi, and Missouri. They represent about 17% of the 254 Meritage restaurants and must receive court approval first. The deal could be closed by late November.
The technical buyers of the restaurants have various names, each of which feature the name “Divine,” including Divine Pinnacle Operations and Divine Infinity Operations.
According to court documents, Meritage believes the offer is “the highest or otherwise best offer” for what is known as Meritage’s Tennessee business. Patel plans to operate the 42 restaurants as a going concern and the cash from the sale “will provide critical liquidity for the debtors’ estates and is a key component” of its restructuring.
The possible sale price averages about $443,000 per location.
Meritage filed for bankruptcy last month with $155 million in secured debt. The company had 314 restaurants when it sought Chapter 11 debt protection, though it had closed 60 restaurants earlier this year.
The company is in the midst of a round of up to 60 closures expected to take place in groups through mid-November.
Meritage is based in Michigan, and operates restaurants in several states, including Michigan, Indiana, Ohio, Texas, Oklahoma, Virginia, North Carolina, Georgia, and Florida. The bankruptcy was the largest of a franchisee since 2020, when Pizza Hut and Wendy’s operator NPC International declared Chapter 11.
Meritage blamed several factors for the bankruptcy, including ineffective brand marketing, winter weather, soaring beef prices, and discounting.
