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A locally based restaurant company plans to spend $100 million to develop 40 new fast-food locations.
Grand Rapids-based Meritage Hospitality Group entered into a development agreement with Wendy’s under the chain's groundbreaking incentive program for the new locations across Meritage’s 16 states of operation, according to Meritage last week.
This is in addition to Wendy’s refreshes and relocations already underway by Meritage.
Meritage is currently working on site acquisitions for the 40 new builds.
Robert Schermer Jr., CEO of Meritage, said the company is “a leader of restaurant development within the Wendy’s system” and is on pace for “a record number of new builds in 2019 and 2020.”
“Restaurant development is an important part of our business model, which follows the acquisition and integration of restaurants in designated market areas,” he said.
“New restaurants have historically provided us with a strong return on investment, as guests reward us for the new building design and customer enhancements.”
Meritage plans to fund the projects through a combination of cash on hand and development credit facilities.
Under terms of the development agreement, Meritage will develop the new Wendy’s restaurants by the end of 2024 and receive “significant economic incentives” under the Wendy’s groundbreaking incentive program, which includes royalty and national marketing fee relief.
The development and incentive programs are subject to customary Wendy’s real estate approvals and Meritage fulfilling its existing joint capital plan to re-image 10% of its existing restaurants each year.
Meritage Hospitality Group (OTC: MHGU) is a restaurant company with a portfolio of 320 restaurants in numerous states: Arkansas, Connecticut, Florida, Georgia, Indiana, Massachusetts, Michigan, Missouri, Mississippi, North Carolina, South Carolina, Ohio, Oklahoma, Tennessee, Texas and Virginia.
The company has about 10,000 employees.
It operates restaurants under several brands: Wendy’s; Stan Diego; Freighters Eatery & Taproom; and Wheelhouse.
Meritage reported 2018 sales of $435.3 million.