Wendy’s is quietly dropping breakfast from hundreds of locations, and the reason is simple: the morning meal hasn’t caught on. The chain that launched a national breakfast rollout in May 2020 has now cut back hours at some restaurants and let franchisees opt out entirely, according to a recent report from Daniel Kline.
The move comes after breakfast sales fell to 5.5% of overall revenue in Q2, down from 8% in the second quarter of 2020. It’s a sharp about-face for a chain that once saw breakfast as its ticket to catching up to McDonald’s. Now it’s the third-largest U.S. fast-food burger chain, behind Burger King, and its sales are sliding.
Global Sales Decline
The financial picture is blunt. Wendy’s CFO Steven Cirulis said on the chain’s second-quarter earnings call that U.S. same-restaurant sales declined 7.0%, driven by a 12.5% drop in traffic. That drop included “reducing or eliminating breakfast operating hours at certain locations.”
The company’s global systemwide sales fell 6.5% on a constant currency basis, primarily driven by U.S. same-restaurant sales. The decline was also hit by the closure of 289 U.S. restaurants in the first half of the year.
Breakfast accounted for 5.5% of overall sales in Q2, down from 8% in the second quarter of 2020. CEO Robert Wright admits the company hasn’t fully figured out the morning daypart.
Franchisees Get to Drop It
Wendy’s has let franchisees opt out of breakfast sales entirely. “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,” Wright said.
But he hasn’t committed to letting chains drop breakfast permanently. “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 said.
The opt-out has been particularly helpful for franchisees running underperforming locations. The move gives them a way to cut hours.
The Bankruptcy Behind It
The biggest recent development came from Meritage Hospitality Group Inc., a major Wendy’s restaurant franchisee that filed for Chapter 11 bankruptcy on Sept. 17, 2026, in the U.S. Bankruptcy Court for the Western District of Michigan. The company listed $10 million to $50 million in assets and debts.
Meritage operates more than 350 locations in 15 states, including some non-Wendy’s restaurants. It ran 314 Wendy’s locations, about 5% of the brand’s total U.S. restaurants.
The franchise operator closed 60 underperforming stores and exited breakfast or altered that daypart in about 120 underperforming locations, according to Restaurant Dive.
Why Breakfast Failed
The breakfast rollout was meant 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, according to CNBC.
The problem is traffic, not prices. The decline in U.S. same-restaurant sales was driven by a 12.5% decrease in traffic, which included “less discounting and reducing or eliminating breakfast operating hours at certain locations.”
Wendy’s has struggled to get people to switch from what they’re used to, especially since the chain didn’t make coffee part of its focus. As BTIG analyst Peter Saleh told Nation’s Restaurant News in a March 2024 interview, customers will come in for coffee and at least get that coffee, which is a habit that Wendy’s never fully built.
The History of Breakfast
Wendy’s began offering breakfast nationally in May 2020. The company changed how it reported breakfast sales in the fourth quarter of 2021, reaching 8.5% of total sales at that point.
“We transitioned away from disclosing breakfast sales mix targets as we measure the success of the breakfast business by sales volumes,” a company spokesperson told Nation’s Restaurant News (NRN).
The company stated its goal as reaching $3,000 to $3,500 in breakfast sales per restaurant per week. That target was set before the company stopped reporting breakfast sales mix targets.
Saleh said the national approach this time was better than the piecemeal strategy Wendy’s had used in the past, which gave competitors a chance to coupon heavily in its markets.
The Numbers at a Glance
| Metric | Q2 2026 | Q2 2020 |
|---|---|---|
| Breakfast sales as a share of overall revenue | 5.5% | 8% |
| U.S. same-restaurant sales decline | 7.0% | Not specified |
| Traffic decline | 12.5% | Not specified |
| Breakfast operating hours reduced at locations | At least 120 | Not specified |
| Systemwide sales decline (constant currency) | 6.5% | Not specified |
- Breakfast sales now account for 5.5% of overall revenue
- U.S. same-restaurant sales declined 7.0%
- Traffic declined 12.5%
- At least 120 locations dropped or cut breakfast hours
- Systemwide sales fell 6.5% on a constant currency basis
Key Facts
- Breakfast sales: 5.5% of overall revenue in Q2, down from 8% in Q2 2020
- U.S. same-restaurant sales decline: 7.0%
- Traffic decline: 12.5%
- At least 120 locations dropped or cut breakfast hours
- Systemwide sales decline: 6.5% on a constant currency basis
- 289 U.S. restaurants closed in the first half of the year
Wright says breakfast is important, but the company is still analyzing it deeply. “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.
The franchisee opt-out is a stopgap. Wendy’s is still deciding where breakfast fits into its overall plan.
Source material: “Burger chain cancels breakfast at hundreds of restaurants,” Yahoo Finance.
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