GRAND RAPIDS Mich. Wendy's franchisee Meritage Hospitality Group Inc. said Wednesday that it intends to explore "value-creating alternatives for our shareholders," corporate-speak for a possible sale or other means of recapitalization.
President and chief executive Robert E. Schermer Jr. said "a private equity scenario" might be "preferable" because it would afford Meritage more flexibility in expanding its Wendy's business. The company is currently Wendy's only publicly traded franchisee.
Most of Meritage's 53 restaurants operate under the Wendy's name, with the rest sporting the signage of the O'Charley's casual-dining chain.
The company also disclosed that it would explore "other franchise opportunities," specifically citing opportunities to develop hospitality outlets on the waterfront of Eleuthera, a Bahamian island. It also noted its intention to develop more Wendy's units outside of Michigan.
Meritage said it plans to retain a financial advisor to assist in the exploration of a recapitalization.
"A recapitalization could produce several benefits such as a better legal and tax structure, shareholder liquidity and new capital for business growth," said Schermer.
Meritage's announcement comes as franchisor Wendy's International is exploring the possibility of a sale or other means of raising the value of shareholders' stakes.