Meritage, the nation's only publicly traded Wendy's franchisee, collected approximately $1.9 million in net proceeds from the transaction, used $928,000 to pay down long-term debt and deposited the balance of $965,000 into the company's treasury. The sale resulted in a deferred gain of $975,000 before income taxes, which will be amortized over the 20-year lease term.

Meritage says that, subject to market conditions, it may enter into additional sale and leaseback transactions containing similar terms, with related charges and deferred gains, over the next 12 months. "This transaction and any future transactions will allow the company to recapitalize the balance sheet by paying down long-term debt and increasing cash on hand, both of which support our strategic objective of maintaining a strong balance sheet and a less-leveraged new store growth model," says chief executive officer Robert E. Schermer, Jr.

Meritage operates 47 "Wendy's Old Fashioned Hamburgers" restaurants.