GRAND RAPIDS, Mich. (Michigan News Source) – Where’s the beef? Wendy’s may soon have a bigger question: Where did all the restaurants go?

One of the fast-food giant’s largest franchisees is in bankruptcy, putting 54 Michigan Wendy’s locations at risk of closure or a change in ownership.

Nearly $147 Million in Unpaid Fees

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According to a report in the Lansing State Journal, Grand Rapids-based Meritage Hospitality Group, which operates 314 Wendy’s restaurants across 15 states, filed for Chapter 11 bankruptcy on September 17. The group is one of the nation’s largest restaurant operators.

Wendy’s claims Meritage owes $27.4 million in royalties and other fees, plus another $119.5 million in fees associated with closing 60 underperforming restaurants late last year. Wendy’s terminated the franchise agreements with Meritage on September 16 and is asking a bankruptcy judge to enforce that decision.

Michigan Restaurants in the Crosshairs

Michigan has more Meritage-owned Wendy’s than any other state, with locations concentrated around Grand Rapids, Lansing, Kalamazoo and the lakeshore.

Meritage insists in a press release that its restaurants will remain open and its approximately 9,000 employees will continue receiving paychecks during its “restructuring” process. However, in the Wendy’s court filing, it says that Meritage should not be authorized to “conduct any business activity pursuant to the terminated franchise agreements” in violation of state and federal law.

Will the Frosty Survive?

The bankruptcy comes as Wendy’s battles declining sales, rising beef prices and stiff competition. Whether Michigan’s 54 locations operated by Meritage close, new operators are found, or they remain with the company is now tied to the bankruptcy proceedings.

For now, the burgers are still flipping, but the future of those familiar red pigtails is anything but certain.