When you operate a business, it prices you money to not be open. You still pay rent and utilities, even when you’re closed.
Because of that, back in my days as a toy store common supervisor, I tried very exhausting to keep the store open profitably as much as potential. That meant not just opening the doorways more, but also discovering an viewers for those dayparts.
On Friday nights, for instance, we stored half of the store open for people to play Magic: The Gathering. That meant paying someone to officiate the video games and having a cashier to promote sweet and snacks.
We simply offered enough food and drinks to make the time profitable, offsetting the added worker and utility prices.
During Christmas season, we opened two hours earlier most days, and on Easter, I opened by myself, promoting a few thousand {dollars} price of objects, principally to older clients with nowhere to go.
And although it would make no sense for us to be open late at evening or early in the morning, I tried exhausting to maximize our hours while balancing prices.
That same primary calculation helps clarify why breakfast can be engaging to a restaurant chain. Wendy’s started offering breakfast nationally in May 2020, giving its eating places a approach to generate gross sales during hours when many areas had beforehand been closed.
Those efforts initially confirmed promise, but the numbers have fallen, and now the company has quietly dropped breakfast at a quantity of eating places, cutting back hours at others.
A latest franchisee Chapter 11 chapter has led to another 120 Wendy’s areas dropping, or limiting the instances when they promote the morning meal.
Wendy’s breakfast gross sales have slowed
Breakfast was supposed to help Wendy’s catch up to McDonald’s.
Instead, the chain has fallen behind Burger King and is once again the third-largest U.S. fast-food burger chain, CNBC reported. That’s not instantly associated to breakfast gross sales, but those are one of the chain’s issues.
“Global systemwide sales declined 6.5% on a constant currency basis, primarily driven by U.S. same-restaurant sales, which declined 7.0% and the impact of 289 U.S. restaurant closures in the first half of the year,” CFO Steven Cirulis said during the chain’s second-quarter earnings call.
A drop in breakfast gross sales was half of that.
“The decline in U.S. same-restaurant sales was driven by a 12.5% decrease in traffic, which included the impact of less discounting and reducing or eliminating breakfast operating hours at certain locations, partially offset by a 5.6% increase in average check,” he added.
Breakfast, in Q2, accounted for 5.5% of general gross sales. That’s down from 8% in the second quarter of 2020.
CEO Robert Wright admits that the company has not absolutely figured out the morning daypart.
“Breakfast is important to us, and it’s a complex topic that, frankly, we’re still analyzing very deeply. It can’t be disconnected from the broader strategy and the work that we’re doing there,” he said.
Wendy’s has tried numerous promotions to drive breakfast gross sales. Shutterstock
Wendy’s lets franchisees drop breakfast
Wendy’s has allowed franchisees to decide out of breakfast gross sales.
“The large majority of the system continues to serve breakfast. We did have some opt-out activity. And frankly, it was very helpful for some of the franchisees that took advantage of that opt-out because it was a drag on their business,” he said.
He has not dedicated to permitting chains to completely drop breakfast.
“For some franchisees, the opt-out was really helpful and provided a little bit of a relief valve, but it’s still a key area that’s under evaluation for us. And as I said, we need to get our footing on the remainder of the strategy before we start deciding exactly where breakfast fits into that,” he shared.
And now, main Wendy’s restaurant franchisee Meritage Hospitality Group Inc. has filed for Chapter 11 chapter to reorganize its business and restructure its debt, virtually 11 months after defaulting on its franchise agreements for failing to remit funds, according to Bankruptcy Observer. Meritage operates more than 350 areas in 15 states, including some non-Wendy’s eating places.
The franchisee and 14 associates filed their petition in the U.S. Bankruptcy Court for the Western District of Michigan on Sept. 17, 2026, itemizing $10 million to $50 million in property and money owed, TheRoad’s Kirk O’Neil reported.
The franchise operator ran 314 Wendy’s areas, about 5% of the model’s complete U.S. eating places.
“Meritage closed 60 underperforming stores that helped strengthen its system and exited breakfast or altered that daypart in about 120 underperforming locations,” Restaurant Dive reported.
Wendy’s has struggled with breakfast
Wendy’s breakfast gross sales reached 8.5% of the complete in the fourth quarter of 2021, when the company modified how it reported breakfast gross sales.
“We transitioned away from disclosing breakfast sales mix targets as we measure the success of the breakfast business by sales volumes,” a company spokesperson instructed Nation’s Restaurant News (NRN).
At the time, the company said its aim as reaching $3,000 to $3,500 in breakfast gross sales per restaurant per week.
In a March 2024 interview with NRN, BTIG analyst Peter Saleh said he believed the daypart is sufficiently filling a “big hole” in Wendy’s business and that the method this time around higher positions the model in the morning daypart.
“The way they had done it in the past was more market-by-market. They really hadn’t done it nationally all at once, and that gave competitors, predominantly McDonald’s, the chance to come into their markets and coupon like crazy,” Saleh said. “The national strategy they have now is better.”
Saleh did be aware that altering breakfast habits is exhausting, and that Wendy’s made a mistake by not making espresso half of its focus.
“You’ve got to get people to switch from what they’re used to, which is really hard to do, especially if you’re not promoting coffee. Customers will come in for coffee and, at the very least, get that coffee, which is high margin, and in the best case, get a coffee and sandwich and drive real incremental sales. I’m surprised they didn’t focus on coffee out of the gate,” he said.
RTM Nexus CEO Dominick Miserandino understands what Wendy’s is doing.
“While it is an economic reality, it’s a sad moment because so many people remember the chicken biscuit sandwiches,” he instructed TheRoad.
