Under a new development agreement, Meritage Hospitality Group, Inc. will develop 40 new Wendy’s restaurants by the end of 2024 and receive significant economic incentives provided under the Groundbreaking Incentive Program, which 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 percent of its existing restaurants each year and customary Wendy’s real estate approvals. The company plans to invest approximately $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,” says Meritage CEO Robert Schermer Jr. “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.”
Meritage reported strong earnings growth in the first quarter of 2019 and believes the sales and earnings growth will accelerate in 2020, driven by new development and re-imaged restaurant locations, per a release.
Meritage Hospitality Group operates 320 restaurants.