If you’ve ever grabbed a meal at Wendy’s, Taco John’s, or Stan’s Tacos, you’ve come “face-to-food” with the Meritage Hospitality Group (MHG). With a footprint across 16 states, nearly 350 restaurants, and 11,000 employees, the franchise operator has seen transformational growth.
MHG was on an acquisition tear in late 2022 and into 2023, having acquired 43 Wendy’s locations in the Midwest, which are likely to boost sales and contribute to the establishment of over 500 total restaurants via acquisitions and new builds.
“Acquisitions, renovations, and new restaurant developments are integral parts of our Wendy’s business model as we grow into new market areas,” said Meritage CEO Robert Schermer Jr. in a prepared statement to MiBiz.
At the same time, MHG also signed a 50-store development agreement with Taco John’s to bring new locations online by 2026.
The sheer number of new restaurants in its pipeline is a Meritage record, and its projected sales growth for 2023 is slated between 10 and 15 percent to total about $688.6 to $719.9 million.
In September 2022, Wendy’s named Meritage its 2022 Monument Award for “visionary growth and expansion in the large franchise” category. The award recognizes partners that “strengthen the Wendy’s brand through their commitment to restaurant development, quality, service, value, and sustainability.”
“Four years ago, we set a plan in motion with our teams to be the best operator in the system. This is a culmination of that dream and is a huge collective achievement for Meritage. We are so proud of our teams and their efforts that are recognized with this year’s award,” Gary Rose, Meritage president and chief operating officer, said in a statement.
One of the principals expanding Meritage’s footprint is Director of Design and Construction Aaron Besmer. The director has been with MHG since 2015 when he came to the organization after working with Meijer, Fishbeck, and C2AE in managerial roles. After coming to Meritage as a construction department manager, he was promoted to his current role in August 2022.
While Meritage continues riding high, the overall climate for franchisors continues to be challenging. Restaurant Dive reported in January 2023 that as high costs continue to squeeze margins, new and existing franchisees face difficulties in making ends meet. Incredible competition for real estate, ballooning technology costs, and the already well-known, temperamental nature of the restaurant business offer reasons not to get involved.
Yet growth continues at an amazing rate.
“Franchising is growing as fast as it’s ever grown right now,” said Mark Siebert, CEO and founder of consultancy iFranchise Group, told Restaurant Dive. “We’re just seeing a lot of people getting into business for themselves.”
Despite inflating costs, consumer demand to eat out is still stable, if not high, and an expected economic downturn will likely slow inflation along with wage growth. It’s an odd perspective, getting into the fast-casual business during an economic downturn, but the market creates strange bedfellows.
While it may be incredibly difficult for small-unit franchise operators to break into the market at present, it’s not a concern for an organization with the infrastructure of Meritage. The numbers keep shaping up right for MHG, and with its current pipeline of projects, economic downturn or otherwise, Meritage is going to be very busy for the foreseeable future.
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