Save Wendy's before it's too late

Author

Andy Moore
September 21, 2026

Hello!

Today we’re covering…

  • A 314-store Wendy’s franchisee goes bankrupt

  • Starbucks shops Japan

  • Wonder’s very busy week

Read on…

3 Numbers

$3 billion

Potential valuation of Starbucks' Japanese business as the coffee company reportedly weighs the sale of a majority stake in its Japanese operations. Starbucks operates 1,883 cafes in Japan (nearly 9% of its global footprint) and previously sold a majority stake in its China business last year.

$125 million

DoorDash’s Series D investment into Wonder; the two companies announced a ‘strategic partnership’ as part of the deal. It was a busy week for the food company that I still haven’t figured out how to quickly describe: Wonder also unveiled its autonomous food production line, which it says can make up to 500 bowls per hour, and it laid off more than 500 as it consolidated production facilities.

-50%

Stock decline for Papa Johns so far this year. The beatdown (accompanied by several quarters of same-store sales declines) has led company leadership to reconsider… just about everything, from store operations to the sweetness of its pizza sauce.

The Big Story

One of Wendy’s largest franchisees declared bankruptcy this week. Via CNBC:

Meritage said it filed for bankruptcy to strengthen its balance sheet, and the company plans to keep its restaurants running during the restructuring process. Meritage operates 314 Wendy’s restaurants across 15 states, as well as one Bojangles location and five independently branded stores.

“Because the substantial majority of Meritage’s restaurant portfolio operates under Wendy’s brand, those system-wide pressures have had a significant impact on the Company’s financial position,” Meritage said in a press release announcing the filing.

At an investor conference in June, Meritage CEO Bob Schermer Jr. said that store-level earnings before interest, taxes, depreciation and amortization had plummeted 48% in 2025. Rising beef costs and increased discounts weighed on the franchisee’s profits.

In a sign that Meritage has been struggling for some time, the company owes nearly $25 million in deferred franchise fees to Wendy’s corporate.

This is a big hit in a series of haymakers Wendy’s has endured recently: its Q4 2025 same-store sales (-11.3%) were worse than the 2020 pandemic quarter; comps fell another 7.8% in Q1 2026 and 7% in Q2 2026; and overall, the company closed 289 U.S. restaurants in the first half of the year. Wendy’s has now lost share in the QSR burger category for 17 straight months. For the first time in over a decade, Burger King is the number 2 burger chain in the country. It hasn’t been great.

What’s happened to Wendy’s?

Any recap has to begin with the insane amount of turnover at the top of the company. It hasn’t served Wendy’s staff and franchisees well.

A brief history: Todd Penegor left in February 2024 then took the head job at Papa Johns. He was replaced by Kirk Tanner, who had no restaurant operating background.

Two weeks into his tenure, Tanner mentioned dynamic pricing on an earnings call, and the internet decided Wendy's was building stock ticker menu boards that would charge you $10 for a Junior Bacon Cheeseburger if the data sensed you were extremely hungry. He clarified, then replaced most of the C-suite, and then jumped ship to Hershey after 18 months.

Ken Cook — a UPS finance lifer who had been Wendy’s CFO for only 6 months — was handed the keys. He served as interim CEO from July 2025 to May 2026 while the company conducted a year-long hiring search. Finally, in May, Wendy's hired Bob Wright as CEO, a man who had run Wendy’s operations across three separate stints and was Potbelly's CEO from 2020 to 2025.

That makes four CEOs in 28 months.

It’s no surprise Meritage — and Wendy’s as a whole — has struggled. Without a long-term, consistent plan, the company has tried to plug gaps by discounting heavily, which has weighed on franchisee profits. Wendy’s hasn’t convinced enough people to switch up their breakfast habits (and now many franchisees are dropping the daypart). And value perception has slipped. (Don't take my word for it: the new CEO said as much in the WSJ last month.)

All that said… there’s actually reason for optimism.

Wright seems like the right man for the job — someone with deep Wendy’s ties who also found success at a different concept, Potbelly, before selling it to RaceTrac for over $500 million.

He’s saying the right things, noting Wendy’s has grown over-reliant on promos and needs to rebuild its core menu again, item by item. It looks like the yellow packaging is returning in a couple of weeks — I wouldn’t be surprised if it kicks off some kind of back-to-basics ad campaign that mirrors Burger King’s successful recent marketing push.

And there’s also one more arrow that Wright has in his quiver: Wendy’s was briefly a meme stock and very easily could find itself one again. In June of this year, Wendy’s dominated Reddit’s Wall Street Bets forum. Its stock popped over 40% intraday before falling back to earth.

BUT, if the company finds some natural momentum in the coming months, I wouldn’t be surprised if a meme stock rally quickly follows. Even before the rally, Wendy’s has long been a running fascination on Wall Street Bets, and it has better odds than most of winning the corporate equivalent of a lottery: a chance to sell stock into the rally, the way AMC and GameStop did, and hand Wright a war chest for the Burger Wars.

Elsewhere In the Headlines

  • Dave & Buster’s posted a loss of $12.5 million last quarter as it continues to try to dig itself out of a hole — the company has now posted 14 straight quarters of same-store sales declines. (On a positive note, new games at the concept are performing well.)

  • Seasoned restaurant investor/ageless NBA legend LeBron James has made an undisclosed investment in Bill Phelps’ newest concept, Mike’s Red Tacos. LeBron previously invested along with Phelps in Blaze Pizza and Dave’s Hot Chicken.

  • An update on the end of O’Charley’s: a single franchised location in Niles, Ohio remains open — but it, plus the corporate office, will permanently go dark on Sept. 27.

  • In its latest collab, Chipotle is quietly piloting a food-safety platform with /spins a big wheel… Palantir.

  • Somewhat incredibly, Chili’s store count actually declined during its sales heater. That’s about to change.

  • Tropical Smoothie Cafe’s rebrand: nostalgic, colorful, nailed it?

  • 20 years after “Setting the Table,” Danny Meyer has written a follow-up — and, somewhat surprisingly for a guy with an enviable career, the book hits heavily on mistakes and regrets.

Name That Chain!

You’ve got three clues to name this issue’s chain:

  • It started in 1977 as a single sushi counter in Sakai (a port city outside Osaka), opened by a former vinegar salesman.

  • Its first American restaurant opened in Irvine, California, in 2009, and the U.S. arm went public on Nasdaq in 2019. It now has roughly 90 restaurants in the U.S.

  • The stores serve every plate under a clear plastic dome, delivered to you in an unconventional (mechanized) manner.

Find the answer at the bottom of the email…

Power Moves

Here are some notable recent C-suite moves:

Thanks for reading! I’ll see you again next week.

NAME THAT CHAIN ANSWER: Kura Sushi

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