Meritage Hospitality to Spend $100M on New Wendy’s Projects
Meritage states that it plans to fund the $100 million in the development of the 40 Wendy’s restaurants through a combination of cash on hand and development credit facilities.
GRAND RAPIDS, MI—National restaurant operator Meritage Hospitality Group, Inc. reports it has entered a development agreement to develop 40 new Wendy’s restaurants by the end of 2024 and will invest $100 million in the new initiative.
Meritage’s development agreement is under Wendy’s incentive program that includes royalty and national marketing fee relief. The development and incentive programs are subject to Meritage fulfilling its joint capital plan to re-image 10% of its existing restaurants each year and customary Wendy’s real estate approvals. Meritage states that it plans to fund the $100 million in the development of the 40 Wendy’s restaurants through a combination of cash on hand and development credit facilities.
“Restaurant development is an important part of our business model, which follows the acquisition and integration of restaurants in designated market areas. We are a leader of restaurant development within the Wendy’s system and are currently on pace for a record number of new-builds in 2019 and 2020, located across our 16 states of operations. New restaurants have historically provided us with a strong return on investment, as guests reward us for the new building design and customer enhancements,” says Meritage CEO, Robert Schermer, Jr.
Grand Rapids, MI-based Meritage reported strong earnings growth in the first quarter and believes the sales and earnings growth will accelerate in 2020, driven by new development and re-imaged restaurant locations. During the first six months of 2019, Meritage increased common stock dividends 200% to $0.12 per share compared to $0.04 last year during the same period.
Back in March when reporting its first quarter earnings, Schermer said the firm planned to accelerate its capital investment spending in 2019 with 36 restaurants under development, including a record 20 new Wendy’s restaurant buildings scheduled for opening this year.
He added that its new and newly renovated Wendy’s restaurants continued to perform well, positioning the company for continued sales and earnings growth ahead.
Meritage Hospitality Group, which has a workforce of approximately 10,000, is one of the nation’s premier restaurant operators, with 320 restaurants in operation located in Arkansas, Connecticut, Florida, Georgia, Indiana, Massachusetts, Michigan, Missouri, Mississippi, North Carolina, South Carolina, Ohio, Oklahoma, Tennessee, Texas and Virginia.