Meritage Hospitality Group Inc. has acquired six Wendy’s restaurants in the Jacksonville, Fla., as it works to expand portfolio, the company said Thursday.
The Grand Rapids, Mich.-based franchise group said it would fund the acquisition with cash on hand and expected the six restaurants to add $11 million in annual sales. Terms were not disclosed.
“The acquisition of the six additional Jacksonville area restaurants is consistent with the company’s five-year growth plan to expand its operating base to 400 Wendy’s restaurants,” said Robert Schermer Jr., Meritage’s CEO, in a statement.
“Currently operating 54 Wendy’s restaurants in northern Florida, we will immediately integrate the acquired restaurants into our operating and accounting platforms,” Schermer said. “The newly acquired restaurants will be added to our Wendy’s remodeling schedule, which is designed to modernize the restaurants and enhance the overall guest experience.”
The company recently updated its Wendy’s development agreement and committed to building 51 Wendy’s units by the end of 2025, said the company, which has restaurants in 16 states.
The company’s guidance for the second half of the year forecast sales growth of between 10% and 15%.
For the first quarter ended April 3, Meritage said sales increased 8.4% to $145.1 million, compared to $133.8 million in the prior-year period. Net income was $1.7 million in the quarter, compared to $4.9 million in the prior-year period.
“The company anticipated a slower start to 2022 as a result of the dynamic inflation experienced in the second half of 2021,” Schermer said. “Additionally, the Omicron [coronavirus] breakout in January 2022 significantly impacted staffing and food costs, but earnings have since stabilized.”
The company’s first Taco John’s restaurants is scheduled to open later this year as part of a 50-store development agreement with the Cheyenne, Wyo.-based franchisor.
Meritage Hospitality Group has 348 restaurants in Arkansas, Connecticut, Florida, Georgia, Indiana, Massachusetts, Michigan, Missouri, Mississippi, North Carolina, South Carolina, Ohio, Oklahoma, Tennessee, Texas and Virginia.
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