The Wendy's Company revoked franchise rights for 314 restaurants managed by Meritage Hospitality Group. Meritage recently filed for Chapter 11 bankruptcy protection. The franchisee operates locations across 15 states.
Rising beef costs and aggressive promotional discounts caused a significant decline in store-level profitability. Meritage represents one of the largest operators in the Wendy's system.
Wendy's stock hit a multi-year low before the company announced the revocation. The franchisee's failure follows a consistent downward trend for the parent company's shares.