Wendy's (WEN) canceled the operating rights of Meritage Hospitality Group for 314 locations over about $147 million in unpaid fees and royalties, Bloomberg News reported Tuesday, citing a Michigan bankruptcy court filing.

The restaurant chain informed the franchisee about the cancellation on Sept. 16, a day before it sought Chapter 11 protection last week, the news outlet reported.

Wendy's said Meritage's bankruptcy filing does not prevent the termination and that the restaurants could eventually be transferred to corporate operations or other franchisees, the news outlet reported.

Meritage disputes the termination notice, attributing its financial situation to Wendy's ineffective marketing alongside increasing beef costs, and has argued in court that its franchise agreements remain in effect as part of the bankruptcy estate, Bloomberg said.

Wendy's and Meritage Hospitality Group did not immediately respond to MT Newswires' request for comment.

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